PUBLICATION OF ASSOCIATED BUILDERS AND CONTRACTORS OF MICHIGAN SPRING 2009
ABC’s award-winning construction training Also: Experts share strategies at Contractors Summit Legislative focus: Ending union-only PLAs, business tax and surcharge Business succession planning
Gulf States, Inc. is one of America’s foremost contractors with a nationally recognized safety program. The following highlights our company and services available to you.
COMPANY HIGHLIGHTS INDUSTRIAL SERVICES OFFERED: INDUSTRIES SERVED BY GSI: • Industrial Construction & Maintenance • Petrochemical/Chemical • New Construction • Power/Cogeneration/Geothermal • Shutdowns/Turnarounds • Food Processing • Procurement • Oil and Gas Refining • Pipe Fabrication/Welding • Pulp and Paper • Electrical • Offshore • General & Electrical Contracting • Pharmaceutical • Steel/Rebar Erection/Structural Steel • Manufacturing • Mechanical/Plumbing • Automotive • Instrumentation/Automation • Mining and Minerals • Concrete–Formwork Core Values Powered by People Success is realized through people. Operations Driven Focus on field operations providing the necessary support, appropriate responsibility, and authority to succeed. Be the Best Strive for excellence, continuous improvement and innovation in everything we do. Integrity Be fair and ethical in all we do. Can-Do Attitude Aggressively pursue challenges with a sense of urgency, desire to succeed, and a commitment to hard work and having fun.
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GULF STATES, INC. Michigan Operations Midland Office 3213 South Saginaw Road MIDLAND, MI 48652 (989) 495-9082 FAX (989) 495-9084
Northern Business Leader Erick Forshee (989) 615-2754 Michigan Operations Manager Erick Forshee (989) 615-2754
Inside
4 Executive Perspective award-winning 5 ABC’s construction training program
ABC educated students are often the first choice for jobs due to customized programs that train students to become the most highly skilled workers in the state.
Contractors 10 Competitive Summit highlights
Contractors face many challenges ahead and experts outlined strategies.
Development: 14 Business Succession planning for contractors
by Jeffrey Theuer, JD, LLM
Every construction business should have a succession plan and a strategy to get there.
Michigan graduation 18 requirements endanger
career technical education by Rep. Joel Sheltrown (D-West Branch)
2009 19 ABC’s legislative priorities
ABC remains focused on key issues facing contractors, such as ending discriminatory union-only project labor agreements, repealing the Michigan Business Tax surcharge and supporting green building.
23 Advertisers Index VOLUME III, ISSUE I
Legislative Update ABC fights prevailing wage expansion 16
Spotlight on Members Recognition and awards won by ABC of Michigan members 20 www.abcmi.com
Spring 20 09 3
ASSOCIATED BUILDERS and CONTRACTORS of MICHIGAN BOARD of DIRECTORS John Parish – Chairman Parish Corporation – Central MI Chapter Rod Kloha – Vice-Chairman Circle “K” Services – Saginaw Valley Chapter David Sheffield – Secretary/Treasurer Onslow-Sheffield, Inc. – Southeastern MI Chapter
One of the easiest decisions I have made as publisher was deciding on the cover story for the launch of the newly designed Michigan Merit. Without hesitation, one word came to mind: education.
Dan Kozakiewicz – Past Chairman Three Rivers Corp. – Saginaw Valley Chapter Bill Buyak Capital Steel – Central MI Chapter Jim Cripps Cripps Fontaine Exc. – Western MI Chapter Gary Hengesbach Westphalia Builders – Central MI Chapter Mike Laundra Alloy Construction – Saginaw Valley Chapter Dave Mollitor Consolidated Electrical – Western MI Chapter Bill Molnar Wm. Molnar Roofing Co. – Southeastern MI Chapter Eric Monroe Rockford Construction Co. – Western MI Chapter Michael Poggi Pinnacle Insurance Partners – Western MI Chapter Jim Struble RCI Electric – Southeastern MI Chapter Jack VandeGuchte Sobie Company – Western MI Chapter Daniel Welch Welch Tile & Marble – Western MI Chapter Michigan Merit Contributors Publisher: Christopher Fisher Managing Editor: Mary Boardway, CAE Editing, Design and Layout: Lezotte Miller Public Relations, Inc. Advertising: Arion Media Printing: Bradford Printing Michigan Merit (ISSN# 1938-9051) is the official publication of Associated Builders and Contractors Inc. of Michigan (ABC of Michigan) and is published quarterly at 120 N. Washington Sq, Suite 805, Lansing, MI 48933, (517) 853-2545. Please direct all inquiries to the previous address. Articles written by outside authors do not necessarily reflect the views of Associated Builders and Contractors Inc. of Michigan. ABC of Michigan reserves the right to reject or edit all material submitted for publication. The appearance of an advertisement in Michigan Merit does not constitute endorsement of the advertiser, its products or services, nor do Michigan Merit or Associated Builders and Contractors Inc. of Michigan guarantee or warrant any claims or offers made by the advertisers. Permission to reprint in whole or in part is hereby granted, provided the following credit line is used: “Reprinted by permission from Michigan Merit, a publication of Associated Builders and Contractors Inc. of Michigan.”
4 Spring 20 09
Education and training is, and will continue to be, one of, if not the most important priorities of ABC. ABC chapters in Michigan provide among the best training in the industry, anywhere.
Education and
Throughout all of ABC the focus on training is, and education does nothing but intensify. will continue to be, The need for a well-trained and one of, if not the prepared workforce is of the utmost importance to the construction industry most important in Michigan and across the nation. priorities of ABC. As techniques change and new trends develop, ABC members need to be able to adapt by employing a workforce ready to meet the challenges of both today and tomorrow. In order to meet such challenges, ABC educates students in a multitude of trades at training facilities across the state. Indeed, construction education and training offers more than a job, but a career choice that is highly rewarding and full of opportunity. This edition of Michigan Merit serves as a reminder of all that construction can offer and the crucial importance of education. From the first hand accounts of former ABC students on how ABC has made a difference in their lives to the impressive ABC training facilities, there is much to be said about the need for our continued commitment to the future of our industry. As you will see, there is also much to be said for the investment of ABC and our industry in ensuring the best trained workforce, always. Yours for the Merit Shop,
Chris Fisher President Michigan Merit
ABC’s craft training produces best and brightest Training current and future construction workers to be highly skilled, safe, and efficient is what ABC’s construction education accomplishes at an award-winning level. Contractors turn to Associated Builders and Contractors and its educational facilities and partners throughout the state to train workers in electrical, carpentry, plumbing, heating, ventilating and air conditioning systems (HVAC), general construction, management and safety. At the four ABC chapters in Michigan students can take customized programs that cater to specific trades, including various levels of management, craft and apprenticeship training and assessment testing. Training in iron working, masonry, pipefitting, insulation and instrumentation is also available at certain chapters.
careers and train them appropriately to ensure future success,” says Scott Gillespie, who notes that as today’s workers near retirement it’s critical to generate interest in the trades.
Construction industry maintains job growth In 2006, construction workers made up 7.7 million of wage and salary jobs and 1.9 million selfemployed, making it one of the
Southeastern Michigan Chapter’s Dan Gonzalez works with Douglas Electric in Wyandotte.
ABC offers marketable degrees “ABC is where students can go for the other four-year degree,” says ABC of Michigan President Chris Fisher. “We train craft professionals who are ready to have an impact on the job site often before they graduate. Our programs are considered the best in the state.” Central Michigan Chapter members Scott and Pat Gillespie, who are developing a number of significant projects in mid-Michigan, agree. “ABC is well positioned to promote the construction industry to younger people who are exploring
www.abcmi.com
Spring 20 09 5
nation’s largest industries, according to the U.S. Department of Labor Bureau of Labor Statistics. About 64 percent of the wage and salary jobs in construction are in specialty trades, plumbing, heating and air conditioning and electrical. In Michigan, construction workers accounted for about 136,300 jobs in December 2008. The Bureau of Labor Statistics also noted that construction maintains the most consistent job growth. “The jobs are here,” says Pat Gillespie. “We need to get and retain a skilled workforce. For those with the skills, the jobs are available.” Many ABC facilities offer specific courses for safety training, including first aid and CPR, Michigan Occupational Safety and Health Administration (MIOSHA) safety, fork truck and aerial lift safety and on-site construction safety. ABC’s safety courses are updated regularly to address current safety regulations.
Safety is paramount in ABC programs Safety begins in the ABCsponsored classrooms, says Sharon Novasel, vice president of marketing for Regency Group, which administers the ABC of Michigan Workers’ Compensation Fund. “I am sure there is a correlation between training and the safety records,” says Novasel. “In terms of underwriting, we look at the experience and history of the member, and the safety record is considered.” Last year the fund distributed more than $1.8 million back to its members, thanks to a strong focus on accident prevention and proper claim management. 6 Spring 20 09
ABC’s Safety Training & Evaluation Process (STEP) was created in 1989 by the ABC National Environment, Health & Safety (EH&S) Committee to recognize ABC member companies with exceptional safety records and assist contractors in evaluating and improving corporate safety practices. There are four levels of achievement in the STEP program: Bronze, Silver, Gold and Platinum. STEP Platinum recipients represent: Companies with a proven track record of safety—those who have achieved the STEP Gold or Platinum level the previous year n Around 500 ABC member companies, or about 2 percent of all ABC members n Companies with OSHA recordable incident rates well below the national average n
STEP awards are presented annually in the four categories. Each year, more than 2,000 contractors of various sizes participate in the STEP program.
ABC students are often first choice for jobs ABC programs prepare students to be marketable in a competitive industry, helping them rise to the top of the candidate pool. One employer who hires ABC students over candidates from other programs credits the quality of ABC instruction and the focus on safety as reasons ABC-educated students get the jobs. “The instructors actually work in the field,” explains Kerry Albrecht, a project manager for Town Center Electric in Southfield, “and students get hands-on training on real-world equipment. In ABC courses, safety
is part of the culture. In the last 10 years we have had a 100 percent safety record. We put first-aid kits in all the trucks and gang boxes, and I haven’t had to restock bandages once.”
Western MI Chapter partners with M-TEC In the Western Michigan Chapter, courses for students are operated through the Tassell M-TEC Construction Trades Program at Grand Rapids Community College. Mark Stone, M-TEC instructor, says M-TEC graduates come into the workforce prepared to have a positive impact. “We condense a four-year program into three years, but we cover all the material,” he says. “Most students already have their journeymen’s cards by the time they graduate.” Stone says most students are gaining on-the-job experience by their second year in the program, with 80 to 90 percent connecting with a company that sponsors them. “Students are in the field all day,” he explains. “At night they use the lab, because sometimes residential plumbers deal only in PVC and PEX tubing, and they don’t see the copper pipes used in commercial plumbing.” Stone says core curriculum focuses solely on safety during the initial instruction phase at M-TEC. “Every person who comes to work here goes through safety certification,” he says. The educational programs at the Western Michigan Chapter are conducted through a partnership forged with the college five years ago, although ABC still has considerable input into the curriculum and assists in an advisory role. Michigan Merit
“The jobs
are here. We need to get and retain a
skilled workforce.
those with the jobs are
For skills, the
available”. -Pat Gillespie
“Certain trades have a public safety component to them,” explains chapter President John Doherty, listing electrical, plumbing, boiler repair and elevator maintenance as examples. Students obtain hours and on-the-job training before finishing the apprenticeship program. “They take their exam in the third year and some might say, ‘That’s my ticket’ and drop out,” say Doherty. “We encourage them to go the full term, because their diploma or certificate of graduation from the four-year program gives them a document attesting to their skills.” Although some license laws vary from state to state, students can take their diploma anywhere and expect to be hired. In addition to the apprenticeship classes, most ABC sites offer advanced instruction in safety, www.abcmi.com
Onslow-Sheffield Inc.’s Daniel Cohoon, a carpentry student from the Southeastern Michigan Chapter, competed in the 2008 ABC National Convention in San Juan.
management, first aid, green building and other specialties. The training is accredited by the National Center for Construction Education and Research (NCCER), which means the skills learned are portable, says Mark Sawyer, executive director of the ABC Southeastern Michigan Chapter. “There aren’t too many courses at universities, for example that will directly transfer to any other college in the nation,” Sawyer explains. “NCCER curriculum is module based, and is transferable anywhere in the United States.”
Southeastern Michigan program is among state’s largest Southeastern Michigan Chapter’s Director of Education Carol Eberhardt
says craft training there is unique, in that students get classroom training, hands-on instruction and learn via the Internet. “Our students are really helped by online training,” Eberhardt explains. “It allows people who learn in different ways to succeed. Some learn by listening or watching a video rather than reading a book.” Students in ABC classes are often already working for members of the association, since requirements for their journeyman qualification require 8,000 hours of on-the-job training, making their skills even more marketable. “Students usually pick up work in their trade before they finish their education,” Eberhardt says. “Member contractors look to our school for employees. When our students graduate, they are armed Spring 20 09 7
very well to be working in the trade.” “They’re learning while they’re earning,” adds Sawyer. “Of the high school graduates in Michigan, 74 percent continue on to college. Of that 74 percent, only 24 earn a degree, and how many of that 24 percent will work in the field for which they trained? Our graduates are all working in the trade for which they trained,” he says.
Quality instruction makes the difference Dan Gonzalez is an ABC graduate who parlayed his education into a successful teaching career. “I worked with other electricians who took courses at other Ryan Nickerson worked on a project in the Southeastern Michigan Chapter’s 2009 local programs,” explains the Craft Championship Competition. job leader with Douglas Electric in Wyandotte. “Hands down, ABC is superior.” Academy provides apprenticeship Gonzalez contends a high training in 10 fields, as well as core quality education begins with the instruction in construction safety, instructors. “ABC teachers are hand and power tools, blueprints, working electricians. Many are construction math and more. Training inspectors, and they know the trade is split between the ABC Academy inside out,” he says. and nearby Delta College. The chapter has offered training for more Saginaw Valley program than 20 years and began NCCER– trains in 10 fields accredited classes 12 years ago. At the Saginaw Valley Chapter “The text is put together by in Midland, the ABC Construction experts in each particular field 8 Spring 20 09
and reviewed by those experts every three years to keep up with changes,” says James Kubiak, Saginaw Valley Chapter director of education. “It’s a very rich curriculum. A student can take an ABC Academy class in Michigan and transfer to another school anywhere in the nation.” Brian Kretz is a 2007 graduate of the millwright program at the Saginaw Valley facility and a craft Michigan Merit
competition champion. Bierlein Construction Co. hired him and sent him through ABC training. “I did have some knowledge in the field beforehand, and I hired in knowing that I would be put through the program,” explains Kretz. “They paid my tuition and books, and the time I spent in the classroom was my own time. That is the key to it being a successful program. I was working in the field while I was learning.”
Central Michigan program is growing Corey Hannahs, vice president of Integrity Electric in Lansing and an instructor at the school, believes the instruction offered at the Central Michigan Chapter facility in Lansing is excellent. “Across the board, we are very
competitive,” he says. “We get our people through in four years, while some other programs are looking at five years to get through the apprenticeship instruction.” Hannahs notes that they have had very few injuries in the past few years, and those only minor. Classes at the Central Michigan Chapter in Lansing are limited to a four-year course leading to a journeyman’s license in electric. Chapter President Russ Cunningham says the facility could soon expand to include HVAC and carpentry.
ABC students shine in annual craft competitions Another measure of education excellence is success in “craft competition” in which students pit
their skills against their peers and welcome the critiques of judges. Local craft championships include a written exam followed by hands-on competition in carpentry, electrical, fire sprinkler, HVAC, insulation, metal building, millwright, plumbing, pipefitting, sheet metal and welding. Top winners in local competitions go to the national level, during which more than 100 final competitors vie for top awards. Brian Kretz earned a gold medal in 2006 and Gonzalez took third place in the national competition in 2007. Several new 2009 Craft Champions are also from the Saginaw Valley Chapter program. They include: n
The First Place, Gold Medal Winner: Aaron Marker of Gulf States, Inc. in Millwright. continued on page 13
Cohoon works on his project at the 2008 ABC National Convention.
www.abcmi.com
Spring 20 09 9
ABC members from across the state gather at the 2009 Competitive Contractors Summit in February
Competitive Contractors Summit helps members stay
in business Couple the changing
“ABC is going to have to fight, unions are going to fight hard. Organized labor has a lot of momentum coming out of Washington D.C. right now.” David Buday, Miller Johnson
10 Spring 20 09
“The act is generally stacked against merit shop contractors,” explained Schutter. “The prevailing with the struggling economy wage law requires union-scale wages and benefits be paid on all and a toxic mix of issues is created state construction projects.” for merit shop contractors in 2009, Schutter encouraged attendees including the potential passing of the to be knowledgeable on the issue Card Check Bill. During the 2009 before they do prevailing wage work Competitive Contractors Summit, as the best way to avoid potential ABC Michigan members were violations of the act. briefed on the U.S. Schutter was later financial crisis, market joined in discussing recovery tactics, the Prevailing Wage Michigan’s business act by Jack Finn, tax and construction, director of the Wage the Employee Free and Hour Division of Choice Act (EFCA) and the Department of other issues they will Energy, Labor and most likely face in the Economic Growth, coming year. which enforces Kraig Schutter, a Michigan’s Prevailing partner with the law firm Kraig Schutter, Masud, Wage Act and other of Masud Patterson, Patterson, Schutter & Vary PC laws affecting wages Schutter & Peters, in and fringe benefits throughout Saginaw, began the summit with a Michigan. primer on the Michigan Prevailing Finn shared policies and Wage Act. He took attendees through procedures that his office utilizes in the act’s history and explained the enforcing the act and provided ABC law’s details, cautioning contractors members with materials on how and subcontractors on enforcement to ensure compliance. Finn and concerns.
labor and political climate
Michigan Merit
Dr. Timothy Nash addresses attendees on the Future of the Economy
Jack Finn, MI Dept of Labor & Economic Growth, Wage & Hour Division
Schutter followed their presentations with an open forum encouraging questions from participants covering a range of issues from secondary liability concerns to third party complaints from union organizations. David Buday, an attorney with Miller Johnson’s Kalamazoo office who practices in employment and labor law explained anti-competitive union market recovery tactics designed to tip the balance in their favor. “In 1973, unions made up 39.5 percent of the U.S. construction
Robert Miller, CPA, Maner Costerisan
industry and in 2008, they only accounted for 15.6 percent,” said Buday. With the numbers of union members dwindling, Buday said unions are trying to organize the non-union contractor. To do so, unions are pushing union-only project labor agreements and the so-called Employee Free Choice Act (EFCA). “ABC is going to have to fight, unions are going to fight hard,” said Buday. “Organized labor has a lot of momentum coming out of Washington D.C. right now with
David Buday, Miller Johnson
President Obama’s support of EFCA and the possibility of project labor agreements being attached to stimulus package projects.” Buday also analyzed Hire Michigan First by noting that it requires nonunionized employers to hire 100 percent Michigan residents. Frank T. Mamat, an attorney with Foster, Swift, Collins & Smith who practices in construction law, labor and employment relations and state and federal OSHA matters, outlined issues to be faced by both union and continued on page 12
Building for Life.
SAMANTHA: OUR INSPIRATION.
PROJECT: Hudsonville Christian School Hudsonville, Michigan
Dan Vos Construction Company, Inc.
www.danvosconstruction.com / Phone 616.676.9169 www.abcmi.com
Spring 20 09 11
Experts advise contractors on successful strategies Also, employees currently have the non-union contractors if the Card right to a secret ballot. Check Bill passes. Mamat explained that EFCA would “In 2007, the only version of amend the NLRA by eliminating EFCA that existed never made it secret ballot elections, change to the Senate,” he explained. “A rules for unions, permitting them to key element to the proposed new make promises to employees while legislation is the ability of union regulating actions of organizers to obtain a employers. consensus through a In order to prepare, card-check provision, Mamat suggested meaning individuals employers perform would be asked to vulnerability assessment sign a pledge card if audits, train supervisors they wished to form a to handle workplace union.” issues, communicate Under the proposed with employees to system, union ensure an understanding supporters would have Frank Mamat, Foster, Swift, of unionization issues to get 51 percent of Collins & Smith and the potential employees to sign dangers of signing cards and recognition authorization cards; and implement of the union would be automatic. effective policies for communication. Current legislation, the National “Supervisors need to be informed Labor Relations Act (NLRA), protects employees’ right to exercise freedom about what they can and cannot do,” advised Mamat. “Training should of association, self-organization be done to ensure supervisors are and designation of representatives.
continued from page 11
supervising.” Dr. Timothy Nash, vice president of graduate and special programs and dean of the Richard DeVos Graduate School of Management at Northwood University, explained his work on a white paper analyzing the U.S. financial crisis. Nash and his associate Dr. Debasish Chakraborty compiled the white paper examining tax cuts and budget deficits, recent problems on Wall Street and the government’s role. “When (former President Ronald) Reagan cut taxes, revenue coming into the federal government increased dramatically,” stated Nash. “During that period, we had record increases in government spending. It shows that tax cuts have worked very effectively.” He believes the key problems to solve are high budget deficits and an unsustainable national debt, high corporate tax rates, lack of comprehensive energy policy and balancing the budget. MM
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ABC education students earn awards Second Place, Silver Medal Winner: Timothy Turner of Three Rivers Corporation in Pipefitting. n Third Place, Bronze Medal Winner: Cody Green of Three Rivers Corporation in Carpentry. In addition, John Roberts, with Three Rivers Corporation was named one of six ABC National Craft Professionals of the Year and was the top carpenter in the field. n
Gerald Kenyon, a millwright instructor at the Saginaw Valley Chapter, was honored as national Craft Instructor of the Year in 2007. Also, Mike Pope, an insulation instructor with the Saginaw Valley Chapter’s Construction Academy and an employee of G.E. Insulation, was named the 2009 ABC National Craft Instructor of the Year. The award is given to the instructor who possesses outstanding teaching
continued from page 9
credentials and demonstrates a commitment to preserving the high educational standards of the merit shop and construction industry. Kenyon previously had served as a millwright subject matter expert for the chapter’s Craft Championships, creating the 50-question written
construction workforce demands will change as people near retirement,” Fisher explains. “Even if the economy doesn’t rebound right away, there is still a need for highly trained people to fill those jobs.” Fisher says ABC has positioned itself to be able to offer quality
“The text is put together by experts
in each particular field... it’s a very rich
curriculum”.
exam and designing the three-hour hands-on competition. Meanwhile, Fisher says that while the construction business is down in Michigan, the need for trained workers on job sites continues to grow. “There is an expectation that
- James Kubiak Saginaw Valley Chapter
people to work in a 21st Century environment. “We are on top of the trends. We offer successful career opportunities. We offer classes in green building and other specialized areas. ABC continuously meets the challenges and demands of the marketplace.” MM
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Spring 20 09 13 11/3/08 5:06:07 PM
Succession planning for By: Jeffrey Theuer, JD, LLM
A successful contracting
I. The Problem
II. The Solution
One of the most often overlooked aspects of a successful contracting business is planning for the business after the death or retirement of the business owner. A successful contracting company is a valuable asset, often taking years of effort and talent to build a good reputation, and establish value. Passing that value on to the next generation requires a succession plan. Without a plan, the value may be lost.
A good succession plan for a closely held business includes a management succession plan and an estate plan. Such plans work together to provide a roadmap for the future, and can even provide a funding source for the purchaser, which can be critical in a difficult lending climate. The management succession plan focuses on control of the business, and sometimes funding sources in the event of retirement. The estate plan addresses division of ownership, minimization of any adverse tax consequences, and funding sources in the event of death or retirement.
company is a valuable asset. Passing that value on to the next generation requires a succession plan.
14 Spring 20 09
Michigan Merit
contractors III. How to Get There A management succession plan consists of several interrelated documents, depending on the type of business involved. Every business with more than one owner should have a buy-sell agreement. The agreement will formally determine the owners’ respective rights, and can address any tax implications of a change in ownership. Important components include the triggering event, the purchase price and payment terms. Typical triggering events might be death or retirement of one or more owners, but could also include a transition to part-time status. The purchase price can be determined in advance, avoiding conflict over valuation in the future, or an agreed formula can be established to take into account any changes in the business’ value over time. Another part of a management succession plan may be a personal service agreement, under which the former owner may agree to provide business consulting, or sales services for an agreed fee after the sale. A non-competition agreement may also be included to prevent the former owners from starting a new business in competition with the old business. Provisions may also be included which allow the former owner to re-purchase their interests if certain financial milestones are not achieved. Other provisions may be tailored to the individual needs of the owners and their prospective
www.abcmi.com
sellers, including installment payment arrangements if traditional funding sources are unavailable or undesirable. The goals of the estate plan are to reduce the business owners’ taxable estate, and reduce payment of taxes by the next generation. The goals may be accomplished through gift transactions, such as lifetime gifts, intra-family sales, family limited liability companies, grantor-retained annuity trusts, and creating fractional ownership of property, among many other options. Additional considerations may include living trusts for business owners, funding ownership purchases through life insurance proceeds, and estate equalization among children when not all heirs are involved with the business. Each of these should be discussed with a planning professional to determine whether they are appropriate for a particular business owner. Many business owners know of businesses which have failed when passed to the next generation. With proper planning, however, the next generation can be given the best opportunity for success, preserving value for the owner or the owner’s estate, as well as future generations. Jeffrey S. Theuer, J.D., L.L.M. is an attorney with Loomis, Ewert, Parsley, Davis & Gotting, P.C.in Lansing. He may be reached by phone at (517) 482-2400.
Spring 20 09 15
ABC leads fight to stop prevailing wage expansion ABC of Michigan took the lead before the House Commerce Committee to oppose legislation aimed at expanding the Michigan Prevailing Wage Act. We successfully recommended amendments to the so-called “Hire Michigan First” 10 bill package of legislation, which were accepted. At issue was House Bill 4086, which would have excluded firms from state contracts if they violate the Michigan Prevailing Wage Act, PA 166 of 1965. ABC pointed out that minor and technical violations resulting from occasional wage errors and technical misclassifications “ABC worked should not be affected with the by the bill. Yet, because sponsor of SR of the proposed 16, Sen. Mark language a reputable Jansen (R-Kent contractor could be County), to pass mistakenly excluded the resolution in by mis-paying an on a multisupport of merit employee million dollar project shop firms by as little as $1. To throughout remedy the problem, Michigan and ABC recommended removing all references across the United States.” to the prevailing wage act or, at the very least, amending the bill to specify that it only applies to contractors and vendors who “knowingly” violate the Prevailing Wage Act. ABC mounted a strong coalition in opposition to the package of bills. Also joining were several members of the committee that were heavily lobbied by ABC. The legislation was ultimately amended.
16 Spring 20 09
Michigan Senate urges U.S. Congress to oppose Card Check Resolution supported by ABC of Michigan passes state senate On February 19, the Michigan Senate passed Senate Resolution 16 (SR 16) to ask the U.S. Congress to oppose the so-called “Employee Free Choice Act” (EFCA). The State Senate further resolved to transmit to the President of the Senate, the Speaker of the House, and members of the Michigan Sen. Mark Jansen congressional delegation the ABC backed resolution strongly opposing the act. ABC worked with the sponsor of SR 16, Sen. Mark Jansen (R- Kent County), to pass the resolution in support of merit shop firms throughout Michigan and across the United States. The proposed Employee Free Choice Act, also known as “card check,” would publicly rob workers of their fundamental right to private ballot elections on union organizing. A private ballot election is currently the preferred method of voting as it guarantees against threats, intimidation or coercion to ensure workers the ability to vote their conscience. Another concern is that EFCA would require a government-appointed third party – with no knowledge of or stake in an employer’s business or an employee’s livelihood – to impose a binding twoMichigan Merit
year collective bargaining agreement upon a company just 90 days after the card check process is certified. The resolution declared that the flawed card check process “threatens the freedom of Michigan employees and severely limits the ability of the National Labor Relations Board to ensure the protection of Michigan workers.” Senate Resolution 16 passed the State Senate by a vote of 20 to 15. Joining ABC in support of the resolution were the Michigan Chamber of Commerce and the National Federation of Independent Business. Senators supporting ABC members and their employees by voting yes were Senators Allen, Bishop, Birkholz, Brown, Cassis, Cropsey, Garcia, George, Gilbert, Hardiman, Jansen, Jelinek, Kahn, Kuipers, Pappageorge, Patterson, Richardville, Sandborn, Stamas and VanWoerkom. In opposition were Senators Clarke, Scott, Clark-Coleman, Hunter, Anderson, Basham, Olshove, Switalski, Jacobs, Brater, Whitmer, Cherry, Gleason, Barcia and Prusi.
Repeal of business tax surcharge passes major hurdle The ABC-backed repeal of a nearly 22 percent surcharge on the Michigan Business Tax took a step forward, with Senate passage of a bill eliminating the surcharge after 2009. Senate Bill 1, sponsored by Sen. Mark Jansen (R-Kent County) passed the Senate in a 25-11 bi-partisan vote. The bill came out of the Senate Finance Committee, where ABC of Michigan stated its support of the repeal last month. The legislation will cut the surcharge in half, reducing it from 21.99 percent to 11 percent www.abcmi.com
for the 2009 tax year. The surcharge would be eliminated in 2010. ABC and other business groups have pushed for elimination of the surcharge, which was added onto the MBT in late 2007 as a way for the state to replace a widely unpopular tax on services. The bill now moves to the House where ABC will continue to urge swift action.
Governor’s Office reveals stimulus package funding requests
colleges, local school districts, law enforcement agencies, non-profit organizations and others were asked to submit their requests to the state for funding. Some of Michigan’s stimulus dollars will be distributed by existing formulas that affect federal funds. Other areas will be subject to approval and oversight by the state Legislature through the appropriations process. To review the current list of requests and related information, visit http://mi.gov/documents/ gov/inventory_267577_7.htm.
In late February, the Governor’s office revealed a list of projects to be considered for funding under the recently passed federal stimulus package. The list includes more than 16,000 proposed projects totaling more than $49 billion. The list contains requests, rather than approved projects. The final list of stimulus projects will be considerably shorter than Organizations, the initial including cities, list. Current counties, universities, estimates suggest Michigan community colleges, local school districts, will receive $6.9 billion for projects law enforcement tied more directly agencies, non-profit to government organizations and programs, others were asked to according to submit their requests estimates from to the state for Federal Funds Information funding. for States, a service of the National Governors Association and the National Conference of State Legislatures. Organizations, including cities, counties, universities, community Spring 20 09 17
Michigan graduation requirements endanger career technical education By Rep. Joel Sheltrown (D-West Branch)
In 2006, the Legislature passed bills that imposed new statewide graduation requirements for the class of 2011. A number of business leaders, educators and parents have since told me that the requirements will not meet the needs of all students, especially those planning to enter the skilled trades. In fact, the requirements, referred to as the Michigan Merit Curriculum (MMC), endanger high school Career Technical Education (CTE). School districts are being forced to direct more funds to advanced academic classes in order to comply with the MMC. At a time when school funding is stagnant, the change will reduce funding to technical education programs. Students are having trouble finding time to take career courses when so much of their four
years must be spent in advanced academic classes. For students, the loss of technical training opportunities translates into missed opportunities to develop marketable job skills and experience classes that may be relevant and meaningful. For business, the loss translates into fewer job applicants with the skills employers need to succeed. To address the issue, I have introduced legislation that will allow students to choose a technical education pathway toward graduation. The pathway includes many of the same rigorous requirements as the current curriculum, but students choosing the career path will be able to count up to four CTE credits toward their high school diploma.
State Representative Joel Sheltrown, D – West Branch
I look forward to working with ABC in the coming weeks and months to pass legislation, which is so critical. Michigan must educate future workers effectively and ensure that businesses have the skilled people they need to prosper. I welcome your input at 1-888-347-8103 or jsheltrown@house.mi.gov.
ADVERTISE IN THE 2009-2010 ANNUAL DIRECTORY This is your opportunity to advertise in the 2009-2010 ABC of Michigan Annual Membership Directory. One ad, in this one publication, puts you in the offices, briefcases and trucks of every ABC member across the state – now that’s value! The 2009-2010 Directory will again feature the Buyer’s Guide section for easy reference.
Special Member Only Discount ABC Members – get 10 percent off the ad price when ad is paid in full by June 1, 2009.
Looking for more Make sure you don’t miss this valuable opportunity – your competitor won’t.
18 Spring 20 09
business?
New this year – 10% prepay discount applies to One-Third page size (former Business Card size) ads as well. Our new ad sales team of Anthony and Betty Lou will be calling your office for your order or you can contact Anthony Kalogeridis at (313) 884-3550 or visit www. abcmi.com and click on Directory Ad to make sure you don’t miss out on showcasing your company this year.
Michigan Merit
Legislative
Priorities Associated Builders and Contractors of Michigan continues to champion for issues in the Legislature that benefit merit shop contractors. Among the key issues in ABC’s legislative platform for 2009 are: Ending discriminatory union-only project labor agreements (PLAs):
Doing so will give equal opportunity for all working men and women in Michigan to take part in publicly funded construction projects. ABC of Michigan strongly supports legislation that will prohibit union-only PLAs on taxpayer-funded construction projects in Michigan.
Repeal of the Michigan Business Tax surcharge: Builders and contractors are
More than Construction We specialize in: • Design/Build • Process Piping • Butler Buildings • Maintenance Services • Case Work • Plumbing • HVAC • Structural Steel • Green Building (LEED Accredited Professionals)
experiencing increases in overall tax liability compared to the old Single Business Tax. The increased tax results in higher costs of construction, negatively affecting contractors and builders who are already struggling in Michigan’s weak economy. ABC of Michigan urges swift repeal of the surcharge.
Green building incentives: ABC, a
founding member of the U.S. Green Building Council, has been a leader in the green building movement. Last year ABC of Michigan spearheaded development of green building legislation that passed the House with bipartisan support. ABC continues to support tax initiatives for green building practices.
High School track for trades: ABC of
Michigan favors an alternate track for high school students who plan to enter careers in the building trades, which is currently not available in the statemandated high school curriculums. There is high demand for skilled construction workers and high pay for those who have the skills. ABC supports House Bill 4410, introduced by Rep. Joel Sheltrown (D-West Branch) that provides high-school students the opportunity to take career-technical classes that count toward graduation.
989.631.9726 www.trccompany.com Midland, Michigan Architecture/Engineering • General/Mechanical Contracting Construction Management
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Repeal prevailing wage mandates:
ABC of Michigan believes in competitive wages that are neither artificially low nor high. Prevailing wage requirements on publicly funded construction projects are uncompetitive and inflate payroll costs by as much as 60 percent above already competitive wages, costing contractors and taxpayers alike. Repeal of the mandate on school, road and municipal projects would put that money to better use on other vital public projects. In some states prevailing wage repeal applies only to school projects, such as in Ohio, where the exemption saved between 3 percent and 5 percent on school construction. It is estimated that such a repeal could save $150 million a year in Michigan.
www.abcmi.com
Spring 20 09 19
Brigade Fire Protection installs 3,000 sprinklers for Turtle Creek As a follow up to the cover story in our last issue, it has come to the attention of Michigan Merit that Western Michigan Chapter member, Brigade Fire Protection of Traverse City also played a large part in the construction of the Turtle Creek Hotel and Casino. Brigade installed the fire sprinkler system for the 360,000-squarefoot Turtle Creek Casino and Hotel complex. Crews connected more than 3,000 sprinkler heads, 6.5 miles of black pipe and 1.5 miles of CPVC pipe, says Traverse City Branch Manager Dick Irvine. The Brigade crew also installed a 1,250 gallons-per-minute fire pump and a standpipe system that has hose valves in the stairwells so firefighters can easily tap into the system. The project won an award from the Northwest Michigan Builders Exchange.
20 Spring 20 09
Michigan members take top honors at Craft Championship in Hawaii One of the highlights of the national convention in Honolulu, Hawaii for Michigan members was the high honors received by Michigan competitors in the Craft Championships. Saginaw Valley Chapter member GE Insulation employs Mike Pope, who was named 2009 Craft Instructor of the Year. Pope has 27 years in the industrial insulating field which includes experience as a project manager with Dow Chemical Company, Dow Corning Corporation and Hemlock Semi-Conductor as well as experience as a craftsman and a professional craft trainer. He has taught all three levels of the National Center for Construction Education and Research (NCCER) Insulating craft training curriculum and is NCCER certified to teach the eight module Core Curriculum classes. Pope frequently volunteers to mentor new craft training instructors, and
for 10 years has served on the ABC Saginaw Valley Chapter Education Committee, Craft Championships Committee and Program Committee. As the 2009 Craft Instructor of the Year, Pope will receive a $3,500 cash prize from the Trimmer Education Foundation. Three Rivers Corporation, another Saginaw Valley Chapter member, was represented by John Roberts in Hawaii. Roberts was honored as an ABC Craft Professional of the Year in Carpentry. Cody Green, also of Three Rivers Corporation, won the bronze medal for carpentry. In pipefitting, Timothy Turner of Three Rivers won the silver. From Gulf States, Inc., another Saginaw Valley member, Aaron Marker won the gold medal in the Millwright competition. Kevin Cauchi represented GE Insulation and the Saginaw Valley Chapter in the Insulation competition. Derick Miller of Valley Electric was a competitor in the Electrical category. Congratulations to our outstanding craft professionals! Such high honors are evidence of the high quality education and training that the ABC programs in Michigan provide in the craft trades.
Michigan Merit
Is your ad missing from this magazine? If so, you are missing an opportunity to showcase your company with the construction industry across the entire state.
Your ad, in this one publication, will reach the entire statewide ABC of Michigan membership, several nonmembers and key decision-makers and policy makers thoughout the state – now that’s value! Advertising in Michigan Merit is the one-stop source for effectively marketing statewide to the merit shop construction industry in Michigan. Contact Anthony at (313) 884-3550 or anthonykal@comcast.net or visit www.abcmi.com. Make sure you don’t miss this valuable opportunity again – your competitor won’t.
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Advertiser Index Capital Steel............................................................. 13 CT Electrical Services, Inc.........................................11 Dan Vos Construction Company, Inc..........................11 Dependable Fire Protection, Inc............................... 23 Genesee – Bay Constructors, Inc............................. 23 Gulf States, Inc........................................................... 2 Jackson Associates, Inc............................................ 13 J.E. Johnson............................................................. 13
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P&K Steel Service, Inc.............................................. 23 Regency Group......................................................... 22 Rhoades McKee PC.................................................. 21 Smith Haughey Rice & Roegge................................ 21 SuperFleet................................................................ 12 Three Rivers Corporation.......................................... 19 Tradesmen International............................................11 Welch Tile & Marble.................................................. 19
Spring 20 09 23
A B C
of
M ic h igan
L egislative
C onference
Please Join Us For the Fourth Annual
ABC of Michigan Legislative Conference Thursday - April 30, 2009
10:30am to 4:00pm Radisson Hotel, 111 N. Grand Ave., Lansing State Legislators and their staff members will be joining us for lunch. There will be opportunities for one-on-one discussions of the issues that are important to you and your business. ABC of Michigan is pleased to underwrite a portion of the cost for ABC Members to attend! ABC Member Cost: $75.00 - Includes Luncheon, Program and Reception.
Followed by a
Complimentary Reception sponsored by ABC MI PAC 4:00 p.m. - 5:00 p.m.
Exclusive ABC PAC Reception with ABC’s Statewide and National leadership. Please be sure to make it to the ABC member “MUST ATTEND” open bar cocktail and Hors D’oeuvres reception to benefit ABC’s Political Action Committee to advance and defend the political and legislative agenda of YOUR business and the Merit Shop! All PAC contributions are voluntary and must be a personal donation. Corporate donations are prohibited.
REGISTER NOW by emailing
boardway@abcmi.com or visit www.abcmi.com for more information.
t h ursday , Associated Builders & Contractors of Michigan 120 N. Washington Square, Suite 805 Lansing, Michigan 48933
april
3 0 ,
2 0 0 9 PRESORTED STANDARD U.S. POSTAGE PAID LANSING, MI PERMIT NO. 193