Operating Engineers Could Delay Construction Work

By JOSEPH DE AVILA

With union contracts covering thousands of construction workers in the city expiring on Thursday, negotiations for new agreements were expected to go down to the wire.

The spotlight is on the two unions representing crane operators, excavators and maintenance engineers who are some of the highest paid construction workers in the industry. If the operating engineers strike, work on about $10 billion in construction projects currently under way in the city could slow or halt, according to the Real Estate Board of New York, a lobbying group that represents real-estate developers.

"They are meeting now and are scheduled to meet through tomorrow," Louis Coletti, president of the Building Trades Employer's Association, an umbrella group representing contractors, said Wednesday. The contracts expire at 11:59 p.m. Thursday.

Officials with the operating engineers' unions didn't return calls seeking comment.

Construction managers are preparing contingency plans for a possible strike by setting up designated areas for strikers and protestors. Builders were raising materials near the top of floors of their work sites in order to continue working without the help of the operating engineers.

Any major work stoppage would come at an inopportune time for the construction industry, which is already suffering from high unemployment. During the first quarter, construction employment fell to 101,200, a low for almost 13 years, according to the New York Building Congress, a trade association.

In addition to the operating engineers, unions representing carpenters and concrete workers still need to reach new contracts with contractors.

Many of the largest construction projects under way in the city are covered by project labor agreements, which are cost-reduction deals signed by unions and contractors. One general clause of these agreements forbids a strike.

However, the operating engineers, with about 6,600 members, haven't signed any project labor agreements.

Projects that could be impacted if the operating engineers strike include Forest City Ratner Cos.' new basketball arena in Brooklyn, Extell Development Co.'s International Gem Tower in Midtown and TF Cornerstone Inc.'s development in Long Island City called the East Coast.

About $1 billion in public projects like new school construction could also be affected, said Steven Spinola, president of the Real Estate Board of New York.

A new agreement covering Local 14 of the operating engineers would have to be reviewed by a federally appointed ethical practice attorney who is monitoring the union for possible corruption. George Stamboulidis, the union's ethical practice attorney, couldn't be reached to comment.

During the early 2000s, more than two dozen members of the operating engineers unions pled guilty to criminal charges that included labor racketeering and extortion. Prosecutors said the operating engineers unions were under the control of the Genovese and Colombo crime families.

Unions representing painters and steamfitters have already signed new contracts, with workers getting pay raises while agreeing to work-rule changes.

Contractors want to eliminate work rules that they say are antiquated and can add millions of dollars to construction jobs. Often times the work rules result in workers collecting yearly paychecks of nearly $500,000 in base pay and overtime for doing little to no work, contractors claim. Workers say contractors agreed to those work rules in previous collective bargaining agreements.

"We need to bring down costs in order for developers to obtain financing and compete, and create the jobs for the unionized labor force," said Mr. Spinola with Real Estate Board of New York.

Unions representing mason tenders, who are general laborers, reached an agreement with contractors late on Tuesday. Details of that agreement weren't immediately available.

Write to Joseph De Avila at joseph.deavila@wsj.com