Hotel Online 
News for the Hospitality Executive


 
McCormick Place Reaches New Deal with Labor
 Unions to Help Chicago Better Compete
 for Trade Shows
By Barbara Rose, Chicago Tribune
Knight Ridder/Tribune Business News

May 5, 2005 - McCormick Place officials announced an agreement with labor unions Wednesday to help Chicago compete for trade shows by lowering the cost of doing business here.

The package, negotiated over 10 months, addresses longstanding complaints from exhibitors such as being required to hire union workers to plug in electrical equipment and paying higher labor rates before 8 a.m.

Unlike the last attempt at reform in 1998, the new agreement goes beyond work rule changes to set up a permanent Labor Management Council with authority to hash out problems and implement more revisions.

"We're committed to staying with this process until we get every last ounce of flexibility and savings," said Theodore Tetzlaff, who took over three months ago as chairman of the Metropolitan Pier and Exposition Authority, which owns and operates McCormick Place. "We are taking nothing for granted in filling the hall."

The council will include representatives from MPEA, unions, contractors and customers.

MPEA officials said a single rule change--allowing lower-paid technicians to do jobs previously done by full-fledged electricians--would result in a $20,000 savings this year at telecom trade show Supercomm, which draws about 30,000 people.

The hope is that multiple changes will drive combined cost savings for large shows into the millions.

Labor expenses are a perennial concern in a city that faces increasing competition from aggressive Sunbelt rivals with attractive venues and lower costs.

The stakes are high: Chicago reaps more than $5 billion annually from convention and business travelers, even though the city no longer can claim the title of convention capital.

Chicago's standing as a host to midsize and large trade and consumer shows slipped from No. 1 in the late 1990s to No. 4 behind Las Vegas, Toronto and New York last year, according to Tradeshow Week magazine.

Chicago ranks No. 2 behind Las Vegas in vying for 200 large trade shows, with a 9 percent market share compared with Las Vegas' 19 percent share, according to the magazine.

"There's always competition for convention and meeting business," said Christopher Bowers, chief executive of the Chicago Convention and Tourism Bureau. "What you saw today addresses the need for the city to remain competitive."

The agreement involves unions representing electricians, carpenters, Teamsters, decorators and riggers.

Dennis Gannon, president of the Chicago Federation of Labor, AFL-CIO, said it wasn't easy for the unions to reopen their contracts. "Each one of these leaders stepped to the plate and did the right thing," he said.

He said unions are frustrated by reports of exorbitant labor charges.

"Some of these costs are not necessarily on the backs of labor," he said. "We end up wearing the jacket. We are always the target."

A key provision of the agreement calls for random audits to make sure any cost savings are passed along to show operators and exhibitors.

Frank DiMarco, business manager for the Machinery Movers, Riggers & Machinery Erectors Local 136, said members are keenly aware convention business has fallen off since Sept. 11, 2001.

"All members worry about their jobs and rightfully so. Since 9-11, shows are just not what they were," he said. "If all this works the way it's supposed to work, it'll maybe bring more business into Chicago."

MPEA's chief executive Leticia Peralta Davis said some of the work rule revisions are "common sense changes, but they will help customers sense that things have changed for the better."

Trade associations, while encouraged, said it's too early to predict how the agreement will play out.

"Everyone is trying to be very optimistic," said Mary Pat Heftman, point person for National Restaurant Association show, the city's second biggest show last year with more than 70,000 attendees.

"The real meat is still out there on the grill," she said. "There's still an awful lot of definition that has to be put into this."

Complaints from restaurant association members about the costs to install and dismantle exhibits in Chicago prompted the group to decide to conduct a cost comparison study this summer with other cities. It would be the first in recent memory. The restaurant show has been in Chicago for 56 years.

Heftman said her group's exhibitors complain not about Chicago's labor rates but about rules that certain jobs require crews of two or three workers. "It's not the rate per se but the fact that in some cases you're doubling or tripling the rate," she said.

The new agreement calls for reviewing crew sizes on a case-by-case basis before shows begin and again after they close. The restaurant association will begin its meetings this week for a show that kicks off May 21.

One trade group said the potential savings could be large.

Charles Yuska, president of the Packaging Machinery Manufacturers Institute, whose annual show drew about 80,000 visitors in November, said payroll costs totaled $5.2 million.

"If we can save 10 percent to 15 percent of that, I'm happy," Yuska said. "I think we can."

"We look at this as a first step," he added. "The whole community has to come together--labor, the hotels--to make Chicago a premiere destination."

Cab driver Eugene Jura, cruising for customers Wednesday at McCormick Place, said something needs to be done. He makes a habit of asking exhibitors if they're happy with their visit to Chicago.

"They like the city but in five years I never heard anyone saying McCormick Place is a great place," Jura said. "They complain the service is bad and the price is too high and they'd rather go someplace else."

-----

To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.

Copyright (c) 2005, Chicago Tribune

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].

 
advertisement 
To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| Catalogs& Pricing |
Viewpoint Forum | Ideas&Trends | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.