Labor's Own Think Tank

The UCLA Downtown Labor Center sponsored a 2 day conference called the California Construction Academy. It is a think tank for Statewide Building Trades representatives from the most active unions. The focus of the event was economic justice for those who face barriers to employment and rebuilding California’s dwindling middle-class. The statistics are staggering; 35-50% of craft workers will be retiring within the next 3-5 years. The growing need for apprenticeship training needs to be met in order to fill those positions. Union organizers participated in breakout sessions to help identify solutions. The majority of training in the construction industry in Los Angeles is done by Joint Apprenticeship Training.

2 Million Dollars Recovered for Workers

The Los Angeles Unified School District Work Preservation Group announced $2,000,000.00 in back wages were collected so far this year for workers and $800,000.00 in penalties were paid by contractors who cheated their employees. Over 465 cases were closed and an additional 400 cases are still pending. The Joint Compliance Monitoring Program allows volunteers access to prevailing wage school projects for the purpose of conducting compliance interviews. The district provides identification badges to authorized persons for activities related to the enforcement of the payment of prevailing wage rates. Representatives of the LA/OC Building & Construction Trade Council, Dept. of Labor Standards Enforcement, and Labor Compliance Dept. acknowledged the hard work of the union volunteers. Several unions have participated in the program over the years including the electricians, laborers, carpenters, painters and ironworkers.

KB Homes to Declare Bankruptcy?

You could see the crowd behind the caution tape at the Indymac bank in Pasadena today. There were over 100 desperate people in line despite the FDIC’s best assurances that there is absolutely no rush to get your money out. “Everything is fine” they say on the radio. “Plan on coming down another day when the crowds have died down a bit,” customers were told. FDIC agents served free sandwiches and drinks to the people who stood in line for hours according to one news announcer. Meanwhile a dozen or so news vans peppered the neighborhood. A run-on-the-bank is reminiscent of the great depression and the last Bush Presidency. I remember when the now infamous Savings and Loan Scandal broke causing over 2000 financial institutions to collapse from bad loans. Now Indymac is the latest to fall because of shifty no down, low interest, no documentation, “We’ll lend to anyone” shenanigans. Remember those days? KB Homes stock took off like a rocket back then. But then it all came to an end with the bursting of the residential bubble. Tomorrow General Motors will announce huge layoffs and plant closings. A lot of workers and their families will be hurt by it. Some will say that the two have nothing to do with each other. That the rise in oil prices and the housing bubble are completely separate issues. Perhaps; but one thing is for sure, the workers and the customers are always hurt when something like this happens. Keep an eye on KB Homes this week. If you see more sales offices close, don’t be one of those poor souls waiting to just get out with whatever you can get. I guarantee the FDIC won’t be serving any sandwiches.

KB Homes Shuts Down Sales Gallery

KB Homes has apparently shut down the Ascent at Warner Center Sales Gallery on Oxnard Street in Woodland Hills, CA in hopes protesters will remove the twelve foot inflatable rat attracting public attention to the troubled project. The office manager locked up the empty office after movers loaded furniture on trucks to be delivered to an undisclosed location. An email response to my inquiry to the KB Homes website reads, “Unfortunately, our Ascent at Warner Center community is currently on hold and we do not have a re-opening date available.” Meanwhile a demolition crew at the Ascent project removed ash, soot, and debris left by the construction fire a few months back that some say was caused by a welder. There was major damage to two of the floors exposing construction workers to smoke and flames and causing nearby businesses to be evacuated.

There is speculation that KB Homes is considering changing the name of the project due to the bad publicity from the fire. Let’s face it, the residential market is in terrible shape and these builders are as much to blame for the mortgage crises as the predatory lenders that preyed on unsuspecting buyers. Now they want to hire non-union contractors, pay lower wages to the workers, and put a cheap coat of paint on a project that some industry experts believe should have been demolished. The problem KB Homes faces is buyers are smarter then they were just a few years ago. The popularity of the Internet and availability of information on the Ascent project will make it hard for KB Homes to put a happy face on this stinker. Forget the balloons and the flags; people are going to want answers about the integrity of the building. What corners were cut and how is it that a fire was able to start and spread so fast? How safe would you feel living in a wood structure this poorly managed? Was a fire-watch on duty? Why weren’t extinguishers enough to control the flames before they spread to additional floors?

I believe this is a sign of bigger problems for KB Homes. Sure this is just one project that spun out of control, but what does this say about the company and its leadership. Why was KB Homes CEO Jeffrey Mezger willing to risk bringing in second rate contractors and risk the scorn of their stockholders and customers? What does that say about the man? Amongst the turmoil of the credit markets, and foreclosure activity he decides to lower standards and put the company at more risk? KB Homes has a big problem on its hands. Problems like these are expensive.

Options are limited for the California home builder. The economy is on the ropes, and with Freddie Mac and Fannie Mae both suffering staggering losses it’s not hard to see what’s next for KB Homes. That’s right, “BK” aka “bankruptcy.” What other options do they have right now? Sell-off the Ascent at Warner Center project for pennies on the dollar to an apartment management company? This possibility would have been more likely a few years ago when investors were caught up in the buying frenzy and lenders were only too eager to fund risky endeavors. Let’s face it; those days are gone. Today, investors are plagued with debt and there seems to be no end in sight for the slide in real estate prices. No one is calling the bottom yet. Many industry experts believe it could take a year before we even see the bottom and many more before markets recover to their previous state.

Housing markets are in the worst shape they’ve been in since the great depression. Fox News Channel, and the Bush Administration are the only groups touting the resilience of the American Economy these days. No one is taking them seriously. It’s obvious they don’t even believe it themselves. They buy gas like you and I. They see the value of their 401k’s dropping and their medical insurance skyrocketing. Changing the name of the troubled Ascent at Warner Center project and dropping prices to well below cost may be the only option. The problem is; it’s nowhere near completion. This project is so far behind schedule already, there’s no end in sight.

Some will say, “Recessions are nothing new to home builders.” And they’re right. What usually happens in times like these are non-essential staff are let go. Lights are turned-off and sales people are gathered together and given a do-or-die scenario and told, “We’re going to invoke in a brand new sales competition. We’ll have prizes and awards for the top sellers. We’re going to bring in a special motivational speaker and we’re going to Sell Like We’ve Never Sold Before!!! And I know with a little luck and hard work we’re going make it. I just know we are.” But you know what? I don’t think they’re going to make it. Not this time. Not in this market. What do you think???

Recommended Viewing

If you haven’t already seen the segment shown on KCET, Bill Moyers Journal about the “Hollywood to the Docks March” here is your chance. Go to http://www.pbs.org/moyers/journal/06132008/watch.html to watch this extraordinary piece on the struggle of American working families highlighted by this march by Los Angeles union members. Sometimes it takes an outsider to be able to explain exactly what is really happening and put it all in focus in a way that the public can understand. They did such a great job this time explaining the complexities of the class-war that’s been ongoing for decades. How the workers have been taken advantage of by corporate interests leaving many with little or no safety net. When CEO’s like Brian Robert’s of Comcast and others are paid just obscene amounts of money and the average employee scrapes by barely keeping up with inflation. It’s great to see someone finally articulating the growing disparity between the super rich and the working poor. You will recognize many familiar faces from the LA labor movement in the video. The march from Hollywood to San Pedro was led by Maria Elena Durazo, Executive Secretary-Treasurer of the Los Angeles Federation of Labor back in April. Enjoy!

Labor Endorses Obama

AFL-CIO Votes to Endorse Senator Barack Obama for PresidentJune 26, 2008

Endorsement Triggers Largest Ever Mobilization of Working Families AFL-CIO Program to Reach Union Voters Nationwide, 13 Million in 24 Priority States http://www.meetobama08.org/
Calling Sen. Barack Obama a champion for working families, the top leaders of AFL-CIO unions today voted without opposition to endorse him for president of the United States, thrusting the labor federation’s largest ever grassroots mobilization effort into high gear.

“In so many ways―on jobs, health care, gas prices and the war in Iraq―our country is headed in the wrong direction,” AFL-CIO President John Sweeney said. “Barack Obama has proven from his days as an organizer, to his time in the Senate and his historic run for the presidency, that he’s leading the fight to turn around America. He’s a champion for working families who knows what it’s going to take to create an economy that works for everyone, not just Big Oil, Big Pharma, the insurance companies, the giant mortgage lenders, speculators and the very wealthy. We’re proud to stand with Sen. Obama to help our nation chart a course that will improve life for generations of working people and our children.”

In its endorsement statement, the AFL-CIO General Board cited Obama’s strong support of working families on issues such as health care reform, fair trade that will lift up workers here and around the world, retirement security and the freedom to form unions and bargain for middle-class living standards. Obama has a 98 percent voting record on working families’ issues, compared to just 16 percent for Sen. John McCain.

“Senator Barack Obama has secured the nomination of his party in a campaign that has energized millions of Americans and spoken to the hopes and dreams of people from every corner of our nation,” read the AFL-CIO General Board’s statement to endorse Obama. “His leadership can re-engage disenfranchised Americans and bring our country together.” The General Board, which includes presidents of all 56 unions in the federation as well as Executive Council members and representatives of state and local federations, trade departments and constituency groups, votes by per capita membership.

“Senator Obama has advocated a change of direction for our nation that mirrors the priorities of the labor movement,” the statement continued. The endorsement is not only a stamp of approval; it marks the beginning of a huge, united political mobilization among working class voters. The AFL-CIO will focus on mobilizing more than 13 million union voters―including union members, families of members, retirees and members of the AFL-CIO community affiliate Working America―in 24 priority states, working to elect U.S. senators and representatives, as well as state and local candidates.

“We’ll work our hearts out for Barack Obama,” said AFSCME President and AFL-CIO Political Committee Chair Gerald McEntee. “Our program is going to be worker to worker and neighbor to neighbor. We’re ready to mobilize. We’re ready to rock and roll. This country and our people are ready for change.”

Today, the AFL-CIO also launched a new website that provides extensive information on Obama’s background, record and positions (http://www.meetobama08.com/).

The endorsement is the latest phase in a massive grassroots program to mobilize union voters. In early March, the AFL-CIO launched its national “McCain Revealed” campaign, which focuses on educating union voters about John McCain’s anti-worker record and plans. Since the campaign began, AFL-CIO volunteers have knocked on more than 60,000 doors and delivered 1.5 million worksite flyers on McCain’s economic record. Nearly a half-million mailers on McCain’s economic positions have been sent to union swing voters in key battlegrounds.

“We want to engage our members and all working people on the need for action on the issues that make a difference in our daily lives," said International Brotherhood of Electrical Workers (IBEW) President Ed Hill. “It is time to move beyond name calling and division so that our country can take positive action on the challenges we face.”

United Steelworkers President Leo W. Gerard said, “Senator Obama’s plan to revitalize American manufacturing and his commitment to make workers the top priority in any trade agreement give our members hope that his election will lead the country in a new direction that’s long overdue, and inspire us to work as never before to secure his victory.”

Elements of the AFL-CIO grassroots mobilization:
The AFL-CIO top-tier states in 2008 are Ohio, Pennsylvania, Michigan, Wisconsin and Minnesota.
More than 250,000 volunteers will be activated and deployed.
Through Labor Day, volunteers will go to 300,000 union voters’ homes, make more than 300,000 phone calls and distribute over 2 million fliers.
In addition to the presidential election, the AFL-CIO is engaged in every viable Senate race and more than 60 House races. All told, the AFL-CIO will be engaged in more than 510 races nationwide, including state legislative elections.
The unions of the AFL-CIO will collectively devote more than $200 million to the 2008 election.
The 2008 grassroots mobilization is the most sophisticated program the AFL-CIO has ever run, employing cutting-edge voter communication techniques, including micro-targeting to ensure our members are receiving the information they want on the candidates and issues.
Working families are poised to play a pivotal role in this year’s elections. On Election Day, union household members will account for nearly one in four voters nationwide. The campaign in support of Sen. Obama will prove especially helpful among working class voters, which many have identified as the swing group in this election.

In key battleground states such as Ohio, Michigan and Pennsylvania, union household voters made up between 25 and 35 percent of the total vote in 2006.

In 2004, turnout among registered AFL-CIO union voters was as much as 19 percentage points higher than turnout among nonunion voters in key battleground states.

Working America, the community affiliate of the AFL-CIO, has expanded to 11 states and will have more than 2.5 million members nationwide by Labor Day. In Ohio alone, Working America has nearly 800,000 members.

Union household voters across all demographics consistently cast votes for pro-working family candidates. For example, in the last presidential election among AFL-CIO members, 61 percent of white voters voted for John Kerry, while 37 percent voted for George Bush. By contrast, among nonunion voters, 41 percent of white voters cast ballots for Kerry while 58 percent voted for Bush

KB Homes Announces Fire Sale

Work has resumed on the problem plagued Ascent at Warner Center project at 21301 West Erwin Street. This is the location of a construction fire that caused major damage to two floors. Representatives from White Residential and KB Homes refused comment on Friday when asked if corners were cut in an effort to speed up construction. Industry experts have speculated that the structure might be condemned due to shoddy workmanship. When asked about the status of the project, management referred all comments to their legal staff. A sign remains on the gate that reads “Limited Entry; Off limits to unauthorized personnel by order of the Dept of Building and Safety, City of Los Angeles. Warning: this structure or site has been damaged and may be dangerous to occupy. Further damage may occur at any time. Enter at your own risk. This facility was inspected under emergency conditions on 03-24-08, 10:30am”. No Helix Electric employees were seen on Friday. Two men believed to be from Withee Malcolm Architects were on site briefly. A banner on the building directs the public to the KB Homes/Ascent Sales Gallery at 21101 Oxnard Street just far enough away to mask the smell of burnt lumber.