Originally posted by: MikeyIs4Dcats
Originally posted by: bctbct
Originally posted by: Darwin333
Do you know anything about the "construction world"? I am a project manager at a commercial construction company so I do. Unions may have been necessary for large projects in the past but in most fields they are no longer necessary to man very large projects.
We just finished a huge project that required 8 times the manpower that our company was able to provide on our own. We simply took on the roll of a "GC working under a GC" and subbed out portions of the work. We put a full time project manager and superintendent on the job, purchased and coordinated the material/deliveries and handled quality control. The labor cost ran roughly 6% over our in house labor costs and the project as a whole cost approximately 3% more because of the additional subs.
Oh, did I mention that a union company bid on the project as well? Their bid was over 40% more expensive than ours and they would not guarantee that they could meet the fast track schedule. So we got the job done quicker and cheaper than the closest union bid. I can't say that the quality was "better" because the union companies do turn over a quality product to the owner but it was definitely equal.
The ONLY reason that union companies are still in business around here is because of government work. They simply can't compete with other companies on projects that don't require union labor.
Of course this differs from area to area and different trades (usually dependent upon how much of a stronghold the union has on the trade/area) but unions are most definitely NOT required to complete large construction projects and they are NOT required to provide workers with a safe working environment anymore (OSHA, as much of a PITA as they are, handles that quite well now).
I know quite a bit about the business. Beating your nearest competitor by 40%!! You left a lot of money the table. How many zeros?
As a commercial construction PM and estimator, I can assure you that there are numerous factors affecting a bid. One of the 2 contractors could have made a mistake in preparing their bid. Often times a busy contractor will bid work on a "so what" basis. They need something for estimators to bid on so they will bid a project intentionally high, and if they don't get it, "So what". If they do, then they make a mint. A contractor might also increase his bid greatly because they feel the project or the owner will be a pain in the ass, so we include a PITA fee. It's impossible to look at 2 numbers and have any idea why they are so different without more information.
We are a union contractor, and while the cost of labor can be an issue depending on our competitor, the difference is usually less than 10%. A union contractor in our area can still be competitive on most projects. As a union contractor, we have managed to survive over 90 years.
In my experience, the contractors most affected by the union factor are mechanical and electrical subs as they require pretty specialized training and also often have the largest combined force size on a larger project. It is their ability to draw from a large shared labor pool that enables them to be competitive and survivie in the market as the projects vary over time. There are not always large projects to bid, and during those times they can cut back and spread the same forces over more companies with smaller projects.
Your argument about government work keeping unions in business is ridiculous. Most government entities are obligated to take the lowest responsible bid regardless of the labor status of the company. Most government projects (including all federal projects) require the payment of Davis-Bacon wages. In some cases, this equalizes the wages between open shop and union companies, but in many instances, union companies and many open shops pay well above the minimums set, so it's not always an issue. If a union company is depending on a government entity that is required to take the lowest bidder to stay in business, they are a rarity.
By the way, what you described doing abouve is called brokering, where you perform no tangible work and sub everything out. What you said about being a "GC under a GC" does not describe what you explained.