Union Issues: Chicago Confronts Labor Pains

By Rachelle Crum -- Tradeshow Week, 4/11/2005

Everybody involved in the ongoing discussions about Chicago labor regulations and their impact on the city's tradeshow industry have one desire in common: to keep Chicago competitive in the future as a destination city.

However, if the key parties — the labor unions, general service contractors, Metropolitan Pier & Exposition Authority and managers of the city's most lucrative shows — can't come to an agreement soon, some wonder if things could be headed backward, rather than forward, in the Windy City.

They fear that some of the biggest tradeshows at MPEA's McCormick Place and Navy Pier will shrink or even leave the city because of exhibitor (and show management) dissatisfaction.

Although the city's labor rates are the ninth highest in the country, according to Tradeshow Week's 2004 Survey of U.S. and Canadian Labor Rates, it's not the total price exhibitors must pay that is the biggest complaint. It's crew size requirements and the high number of overtime hours that are the main gripes.

Several managers of the city's biggest revenue-producing shows said they would like to see changes. Among the things they said they want are:

• Reduction in the number of union workers assigned to each (currently) three-person forklift or booth crew;
• Change in the workers' straight-time pay window of 8 a.m. to 4:30 p.m. to the first eight working hours of each weekday; and
• Amendment of the rule (enacted in 1998) permitting only companies with booths 300 square feet or less the authority to use non-power tools.

"Since there's been no definitive movement" with these issues, said Mary Pat Heftman, senior vice president of the Natl. Restaurant Assn., she has been instructed by the association's board to study the benefits of moving to other leading tradeshow cities, including Orlando and Las Vegas, for future Natl. Restaurant Assn. Restaurant, Hotel-Motel Shows. Labor guidelines in the two prospective cities are more advantageous than Chicago's, which "were fit 20 years ago," Heftman said.

The NRA show, the city's second largest annual show and No. 25 on the 2004 Tradeshow Week 200, is scheduled for May 21–24 at McCormick Place and will celebrate its 56th year in Chicago, a city that Heftman would prefer to continue to call home for the 578,000 net sq. ft. show.

"It's our first preference to stay in Chicago," she said. "Our exhibitors have voiced a concern over the years of the cost of doing business in Chicago. (But the city) doesn't lead the pack in terms of cost."

Although the NRA show is scheduled at McCormick Place for the next 10 years, it isn't contractually obligated to that term.

Official discussions on Chicago's labor problems began last June, with a meeting headed up by Chicago Federation of Labor President Dennis Gannon, MPEA CEO Leticia Peralta Davis, Illinois Governor Rod Blagojevich, Chicago Mayor Richard Daley and then-Chicago Convention & Tourism Bureau President Deborah Sexton.

CCTB CEO Chris Bowers said the bureau "is well aware of the meetings industry's needs and concerns" and "will continue to work with government leaders, labor and the entire hospitality industry to keep costs down and business growing in Chicago."

In the meantime, two Reed Exhibitions shows have left the city.

The Natl. Hardware Show moved to Las Vegas last year. The TSW 200 show (No. 36) will return to the Las Vegas Convention Center for a second time May 17–19.

Natl. Manufacturing Week, No. 56 on the TSW 200, will move to the Donald E. Stephens Convention Center in Rosemont for its March 21–23, 2006, edition.

Kel Marsden-Kish, industry vice president for Reed, said attendee-driven research that prompted the Natl. Manufacturing Week move "does incorporate labor costs." The change of venue offers his exhibitors a 25-percent savings, Marsden-Kish said.

The responsibility for any regulation adjustments — and consequent price cuts to exhibitors — rests primarily with the labor unions (through their collective bargaining agreements) and the service contractors (via their deals with show managers).

However, Tim Leahy, secretary-treasurer for the Chicago Federation of Labor, said, "A lot of the burden rests on the contractors."

Leahy added: "We've done what we can ... only to see that concession not passed on by the contractor."

John Patronski, executive vice president of industry development for GES Exposition Services, disagreed.

"Both ourselves and the Freeman organization have been asked those questions before, and we both have said that (concessions) have been passed on," he said. "I don't understand why they (the federation) keep saying that it was not passed on."

Ellen Beckert, corporate director of marketing and communications for Freeman, said her company also supports "cost savings that would be passed on to exhibitors."

When discussions began last year, the two service contractors offered to work with a third-party audit process determined by a labor management committee (possibly to be overseen by the MPEA).

"That suggestion is still out there as part of the overall negotiations," Beckert said.

The contractors' commitment to helping exhibitors see additional cost savings is "strengthened much more" through this suggestion, Patronski added.

"Rest assured, the working men and women in the tradeshow industry in Chicago (are making) sure this is the premiere tradeshow city," Leahy added.

And although another official meeting between MPEA, the unions and the service contractors has yet to be scheduled, the MPEA is assuring show managers that the issues will be ironed out sooner rather than later.

"These are urgent discussions. There's an eagerness on the part of our customers, and on our part, to have this resolved," said Billy Weinberg, MPEA's director of communications. "I think we're closer to the end than to the beginning," he continued, although recent leadership changes in both the riggers' and decorators' local unions have slowed the process.

And if an agreement were reached, it would have an immediate impact, Patronski said. "If changes were made next Monday, they could be enacted next Monday."

Chicago-based Heftman serves as a Chicago task force leader and board member of the Major American Trade Show Organizers, which met April 6 with MPEA and CCTB officials to discuss industry issues — labor regulations among them.

Fellow MATSO member Tom Shimala, director of technical exhibitions for the Radiological Society of North America, will mount the Radiological Society of North America Scientific Assembly & Annual Meeting, another TSW 200 show, for the 19th time Nov. 27–Dec. 2 at McCormick Place. The RSNA meeting is scheduled for McCormick Place through 2010.

However, he warned, he is also checking out other cities (like Las Vegas and Orlando) that typically require one-man forklift crews and have other less stringent labor regulations. "We'll continue to explore other locations," he said, because he doesn't see a resolution in sight in Chicago.

"The plan was to have direction by September (2004). It sounded to me like the parties couldn't agree on anything," Shimala said.

To the city's advantage, the quality of its labor force may help keep shows in Chicago — at least for now.

"Across America, Chicago holds some of the best labor available," said Debbi Kemp, exhibit marketing manager for Toshiba America Medical Systems, the RSNA show's fourth largest exhibitor with 18,000 sq. ft. of space. However, she added, "(the unions) have a strong hold on you." Installation of Kemp's booths typically requires a 30-person labor crew, including several three-man forklift crews.

Both Shimala and Heftman agree that Chicago consistently delivers quality shows.

"The skill level is very good," Shimala said, especially in handling his show's medical equipment. "If you ask an individual exhibitor, the majority will tell you that they've had a successful meeting in Chicago."

Plus, Shimala added, "We have no problem in getting people to work (in Chicago). Our contractor (Freeman) tells us that if we were to go elsewhere," a labor call wouldn't be as reliable, he said.

With her 77,000-plus-attendee NRA show fast approaching, Heftman said her analysis of alternative cities won't start until June, and it is unclear whether she will reach a decision before the end of the year.

What is clear to Heftman is that "it's the right time for Chicago to consider change. None of us is getting any younger."

"We take their concern extremely seriously," Weinberg said. MPEA not only pledges change, "but also mechanisms to ensure that cost savings get passed on to the customer."