|By Kathy Bergen, Chicago Tribune|
Knight Ridder/Tribune Business News
Mar. 12, 2005 - In a grand gesture in June Mayor Richard Daley and Gov. Rod Blagojevich told the trade show world they were throwing their considerable political weight behind labor reform at McCormick Place.
More than nine months later there has been little progress, and organizers of some of Chicago's biggest and most lucrative trade shows are growing restless.
"If we were feeling positive, we wouldn't be conducting a formal cost review of two additional cities for the first time anyone knows of," said Mary Pat Heftman, point person for the National Restaurant Association show, the city's second biggest, with 73,260 attendees last year.
"We are certainly anxious for something substantive to be reported," said Phil Brandl, president of the International Housewares Association, whose annual show is the fifth largest, drawing close to 60,000 attendees.
The drumbeat for cost cuts has been building among the association's members because many of them also exhibit at the National Hardware Show, which moved from Chicago to Las Vegas last year, and they have been comparing costs, he said.
Leticia Peralta Davis, chief executive of the Metropolitan Pier and Exposition Authority, which owns and runs McCormick Place, says there is reason for optimism that the ongoing labor talks will produce a second set of work-rule reforms, which would come atop changes worked out in 1998.
"We are working aggressively to get to a solution that bears fruit and we're confident the process is working," she said.
Both the restaurant and the housewares shows have been Chicago mainstays for more than 50 years, and both are weighing their options in the two other cities that can handle their shows, namely Chicago arch-rivals Las Vegas and Orlando.
Loss of the restaurant show "would be tragic," said Jerry Roper, president of the Chicagoland Chamber of Commerce, who earlier in his career ran the restaurant show. "I'd have to move out of the city."
Last year the restaurant show generated an estimated $110 million in direct spending in Chicago, on everything from show labor to taxicabs to restaurants and hotels. And the housewares show triggered about $90 million in spending.
All told, convention and business travelers spent an estimated $5.2 billion in the city in 2003.
The parties involved in the labor talks say they support work-rule changes to cut costs for exhibitors, but climbing that mountain has proved slow and treacherous.
Two of the four main union locals involved in the talks have been rocked by internal struggles, and the resulting leadership turnover delayed progress in the McCormick Place talks.
The Machinery Movers, Riggers and Machinery Erectors Local 136 has been taken over by its parent organization, Ironworkers International, after Fred Schreier, local president, pleaded guilty last fall to a corruption charge. He admitted accepting a $19,000 motorcycle from a pension consultant to whom he steered business.
And Decorators Local 17, which hangs drapes and signs at McCormick Place, was taken over by its international, the United Steelworkers of America, late last year in the wake of internal political problems.
As well, the unions already have contracts in place with the general service contractors that mount and dismantle the shows at McCormick Place. Getting them to agree to concessions has been a tough sell, said sources close to the talks.
Still, Dennis Gannon, president of the Chicago Federation of Labor, said, "We're willing to step up to the plate and do certain things to make a cost-efficient operation at McCormick Place, but we want to make sure our friends, the contractors, pass along the savings to customers."
Representatives of the two major contractors, GES Exposition Services and Freeman Cos, both say they support proposals to create an auditing process that would document that cost-savings are passed along to customers.
"We suggested it," said Bob Lozier, executive vice president at Freeman.
Negotiations are said to be entering a sensitive phase, and parties to the talks declined to outline what is on the table.
But show organizers are clear about what they want: Smaller work crews, a reining-in of overtime, greater freedom to set up their own booths and fewer unions to deal with.
Their requests come against a backdrop of hourly labor rates in Chicago that surpass those in Las Vegas and Orlando. The average rate in Chicago last year was $79.01 an hour, versus $68.25 in Las Vegas and $55.14 in Orlando, according to an analysis released Thursday by the Chicago Convention and Tourism Bureau.
When overtime and Sunday rates kick in, the differences can be even more dramatic. The overtime rate for a rigger in Chicago was $154.57 an hour last year, and the Sunday rate was $197.74, according to a survey by Tradeshow Week magazine. In Las Vegas the rate for overtime and Sundays was $104.25, and in Orlando, it was around $89.
Cutting costs is imperative if Chicago is to remain competitive, Deborah Sexton, departing president of the convention bureau, said in a speech at the bureau's recent annual meeting.
"This industry is ours to lose," said Sexton, who is moving on to lead a national convention managers organization, "and I cannot imagine that we will allow that to happen."
MCCORMICK PLACE A MAIN ATTRACTION
Complex's 10 largest trade shows brought 500,000 visitors last year.
Source: Chicago Convention and Tourism Bureau
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