Jill Negronida Hampton of Evanston, an exhibitor at the recent Chicago Gift Show at McCormick Place, was fit to be tied.
The show had ended and she was watching the labor crews as they dismantled the booths.
“It took forever. I sat there, watching these three guys in a little cart, and it took them 20 minutes to pick up the curtains in the booth next to me. One of them was selling his house, and they kept stopping and talking about that,” she recalled.
“The time and the waste is horrendous. It’s one thing if it takes a long time because it takes a long time, but it’s another thing when they’re talking about selling a house, or sitting around smoking their cigars. And heaven forbid the guy driving the cart ever get off.”
Hampton won’t go back to McCormick Place next year, she said. Too much hassle.
Hampton’s is just one little anecdote in the long-running and complicated relationship between Chicago’s labor unions and the lucrative trade show and convention industry that pumped some $4.2 billion into Chicago’s economy last year.
As with any relationship, there’re two sides.
There are the “I’m irritated as hell” stories. Then there are the words of praise. “Our relationship with the Teamsters, the riggers, the decorators has always been smooth as glass and this is our 89th show in Chicago,” said Paul Brian, spokesman for the Auto Show.
Almost everyone, however, agrees that the costs involved in bringing a show to Chicago must come down if the city is to retain its competitive edge in the trade show and convention business.
But labor leader Tommy Thomas, head of Decorators Union, Local 17, says that Chicago unions have already “made a lot of sacrifices . . . we eliminated a lot of past work rules (such as reducing crew sizes from four to three), we instituted a permanent health and safety committee.” Now, he claims, it’s time for management to look into their own costs.
“Let’s see what sacrifices they can make,” said Thomas. “Let’s look at the cost of rental space. Let’s look at the parking rates. Let’s look at their salaries. They’ve asked too much from labor and not enough from the contractors and themselves.”
(The cost per net square foot in the McCormick North and South buildings recently was raised to $1.50 from $1.25, the first increase in about four years. That’s the cost to the show. Exhibitors pay rent to the show that usually ranges from $15 to $30 a square foot. Most of the parking lots are owned by the Chicago Park District, and charge $10 a day.
James R. Reilly, head of the Metropolitan Pier and Exposition Authority, which runs McCormick Place and Navy Pier, says needed labor reforms, ranging from fewer unions to a change in the overtime rate structure, would cut exhibitors’ costs 10 to 40 percent.
He is determined to bring this about and said “if we haven’t made major progress (in reforms) within six months, we have a credibility problem.”
One of the problems in making reforms, however, is the lack of specific figures comparing labor costs to set up a typical booth in Chicago with other cities that are actively courting the trade show industry.
“This is such basic critical information, and we don’t have it. But we will within a couple of months,” said Thomas Conley, who until recently headed the National Housewares Manufacturers Association, based in Rosemont, and serves on a committee called Friends of McCormick Place, which is preparing a study on costs. He is also senior vice president of Travel Technology Group in Chicago.
Hampton, a small exhibitor with only a 10 by 10 square foot space, says her total bill for the four-day show, including rental, came to $963. The bill wasn’t broken down, however, so she doesn’t know how much was labor.
Exhibitors at the National Sporting Goods Show, held in July, pay labor costs ranging between $500 to $5,000, depending on the size and requirement of the exhibit, according to spokesman Larry Weindruh.
Just how important it is for Chicago to get a handle on its costs in order to remain competitive is epitomized by the big Oak Brook-based Radiological Society of North America, which will vote Feb. 22 on whether to keep its show in the city or move to Orlando when its current contract expires in 2001.
The radiologists bring their 60,000 attendees and $64 million to Chicago the week after Thanksgiving–typically a dead time in the trade show industry.
Although hotel costs and room availability is the biggest issue for the doctors, “labor costs are also a big factor,” said Michael O’Connell, director of meetings and convention services for the group.
“In Orlando, we’d be dealing with only one or two labor unions,” he said. “Here, for example, electricians bill at $63 an hour. Orlando bills at $30 an hour. So we could cut that one number in half.”
The radiology show now spends $300,000 in electric costs, according to O’Connell, which would be reduced to about $150,000 with an Orlando move. That doesn’t include the electrical costs to all the individual exhibitors. “They would realize similar savings an hour.”
One of the biggest factors contributing toward high labor costs, according to show managers and McCormick management, is the number of labor unions involved in setting up a show.
There are Teamsters, riggers, electricians, decorators and carpenters, as well as stage hands, service, engineers, painters, plumbers and video technicians.
“Basically, we’re always dealing with five,” O’Connell said. “Say the Teamsters are unloading freight, and they come across a piece of machinery that needs (a rig). So the Teamsters stop and a rigging crew has to come. When we get it to the booth, the carpenters start doing basic work, but if you’ve got fabric panels or banners, you’ve got to have a decorating crew.”
He added: “The meter is running the whole time.”
Ex-Teamster boss Bill Hogan Jr., a former spokesman for the McCormick unions, says the problem isn’t the number of unions, but how they coordinate their work.
“I know exhibitors have a problem when they have to sit and wait. But that can be worked out. We could have composite crews. What everyone needs to do is be willing to sit down and talk,” said Hogan.
Reilly, however, claims that five unions is about four too many.
“It’s partly cost and partly irritation. Unless you get luck in timing, you have to wait,” he said. “The carpenters finish and then you wait for the decorators. And when you get your bill, and it says you paid for riggers, carpenters, Teamsters, and so on, you think you’re paying more even if you’re not. Plus you’re remembering all that standing around and waiting.”
Rather than stand around and wait, Brian Bienfang, a partner in Signature Electronics Co. in Milwaukee, acknowledges that he resorted to bribing workers. His company, a manufacturer of high-end audio equipment, exhibited at the Hilton Hotel during the Consumer Electronic Show, which stopped coming to Chicago in 1994.
“I’d slip them a $50 or $100 bill to get things done more quickly, and sometimes it worked and sometimes it didn’t. And one time, I slipped the laundry folks at the hotel some money to let me bring in a turntable through the laundry door.
“I felt that Chicago and the unions did everything they could to drive us away. They were successful.”
Bienfang now exhibits in Las Vegas. “It costs me a lot less to fly my people out there than it did to travel 90 miles to Chicago,” he said.
Although some of the most restrictive work rules–such as requiring an electrician to make a simple plug-in–were eliminated or changed in 1991, Chicago needs a far more dramatic overhaul of its cost structure to prevent such shows as the radiologists and small exhibitors like Bienfang from leaving, say many industry people.
And as important as keeping what’s already here is attracting the midsize shows, which account for the most rapidly growing segment of the trade show business and which are being actively courted by smaller cities with sweeter deals.
“The level of competition has become enormous and the playing field has changed incredibly in the last six or seven years,” says Paul Astleford, head of the Chicago Convention and Tourism Bureau.
According to Tradeshow Week, Chicago’s 1996 average hourly labor rate was $56.24, making it the sixth most expensive among 46 cities in the United States. That includes the markup from the general contractors, who hire all the union workers except the electricians, who are hired directly by McCormick.
For example, McCormick pays the electricians $43.42 an hour, including benefits, and charges exhibitors $63 an hour, according to John Devona senior director of marketing for McCormick.
Las Vegas, a major competitor in the trade show market, is $51.91, and San Antonio weighed in with the lowest rate at $33.75.
But the hourly rate in itself is not the major problem, according to many.
“I would argue that our base hourly rate is not out of line,” Reilly said. He points instead to overtime pay and non-working labor in addition to the number of unions.
Non-working labor consists of standby workers who are on hand in case they’re needed, and stewards, who protect their union’s particular jurisdiction. They’re on the same hourly schedule as the working labor.
Although contracts vary, most union members start getting time-and-a-half after 4:30 p.m. on weekdays and all day Saturday. Sunday and holidays bring double time.
That adds up to a lot of overtime for shows that start moving in or taking down in the late afternoon and/or on weekends.
The National Sporting Goods Association now starts its show on a Saturday rather than Sunday, to eliminate some of those overtime costs.
“So we get the setup finished on Friday now. . .some companies have saved 50 percent (in labor costs),” spokesman Weindruh said.
The third issue that rankles many is that of non-working labor.
“Many times work actually stops while (the stewards) argue over whose jurisdiction (a job) falls into,” Conley said.
Reilly says changes are needed within six months, or Chicago could be in trouble as the competition increases.
“We want to be very specific when we go to the unions,” Reilly said. “I don’t have to be re-elected like they do (union leaders), but we’ve got to get these changes.”
