Remarks of Walker Kimball, BCOI President
10 June 2009
We have a number of distinguished speakers at the conference who will cover an array of issues facing our industry. I’ll try to highlight the unique, complex and important opportunity we - the construction industry - have at this point in time, to be a partner in economic recovery for the long term.
The discussions that take place during this conference will inform and benefit all of the participants. And this gathering will help us to better articulate, advance and capitalize on the challenges we face as well as the opportunities for our industry and our nation.
This year’s conference is very timely. Just as the country faces enormous challenges, so do the members of CURT. The pessimist might call this a perfect storm of problems, with an inevitably unhappy ending. It is not. It is a perfect opportunity for business, labor and government to step up, work together and accomplish great things.
The diverse agenda for this conference highlights the complexity of our challenges and our opportunities. I’m going to focus my comments today on three interrelated issues—energy, infrastructure and jobs – and our need for a strengthened alliance of business, labor, and government to address these issues.
We need a comprehensive approach to these complex and connected issues. So what do we know?
In the case of energy, climate change mandates that we must reduce greenhouse gases. Energy from renewable, alternative, and clean sources, including nuclear, must become an increasing part of the energy mix. On the question of demand, there may be different numbers, but no disagreement – demand will outstrip current supply.
We have consensus that energy security and independence should be a national priority. We have consensus that new and cleaner production and conservation must be part of the overall energy policy. We have consensus that we need more diverse, more domestic and more efficient energy production.
In the case of infrastructure, the need for investment in our infrastructure is clear no matter whose estimate you use.
On a grading scale of A to F, the American Society of Civil Engineers’ grade point average for our infrastructure is D – poor, which is wholly unacceptable. ASCE also estimates that our country’s 5-year investment need in infrastructure is $2.2 trillion, including nearly $1 trillion just for roads and bridges.
But we must think of infrastructure in its largest sense – it is not just roads and bridges. Our infrastructure includes the production and distribution of energy, refineries, all types of transportation, water and wastewater, dams and levees, communications, emergency response capability, hospitals, schools, and parks and recreation.
Our planning horizon for infrastructure investment must be more than five years – it should be for the next 50years.
In the case of jobs, the American economy is in the midst of a crisis unlike any we have seen in recent history. The economy lost 3.6 million jobs last year, the biggest job loss since the end of World War II. From 2004 to 2006, construction was among the leading contributors to job growth. It peaked in 2007 at 7.7 million. Since then, it has fallen by 1.1 million.
In addition to the current challenge of getting people back to work, we are faced with shortages of skilled craftspeople. Put simply, there aren’t enough workers with the advanced industrial skills required to rebuild our infrastructure and take us to the next level of sustained economic growth.
A generation of skilled craftspeople has retired or is near retirement. Their replacements must be identified, attracted, encouraged and trained in the new tools, sustainable materials and practices, and the technologies that are required for the safe, high quality and productive construction requirements of the future.
We need the active involvement and a partnership among business, labor, and federal, state and local governments to address the skills shortage and the required additions to our workforce.
We have numerous examples of how this can be accomplished. Today, I want to mention one that I have been personally involved in:
The United Association has developed the Veterans In Piping—or VIP program—which directs veterans to training programs as pipefitters, sprinkler fitters, certified welders and HVAC service technicians. Under the VIP model, the union trains the veterans, who are then directed to projects where they are needed, and the international supports getting them into local unions, where advanced skills are required, and support for our veterans exists training.
Through VIP, contractors and owners will benefit from a more stable and trained workforce, and our nation benefits by the creation of a training infrastructure that enables our veterans to attain proud and well paying jobs.
We also need support, reform and respect for the importance of a dynamic and creative educational system, particularly at the high school level. We must reduce an alarmingly high dropout rate. Only 70 percent of high school students graduate on time. In our 50 largest cities, the graduation rate drops to 53 percent.
At the same time, we need additional support for community colleges through partnerships and grants with all of us to increase post-high school training and the retraining of the current workforce.
We must reach students early in their education, providing them encouragement and the tools to be ready to join our industry, in all capacities. We need more programs like ACE, the Architects, Construction, Engineering Mentor Program, in which industry professionals like us volunteer as mentors to high school students. ACE increases the awareness of high school students about career opportunities in architecture, construction, engineering and related areas, and provides scholarships for students.
We must educate young people about the opportunities in our industry—these are well-paying jobs that can provide a bright future for them and their families. We want young men and women to know that these construction jobs are jobs they should want, not jobs they have to take because they think they’re out of options.
We must enhance the profile and perception of our great industry by constantly communicating the fact that we do serious work, rewarding work, and good paying work, that individuals, families, communities and ultimately a nation can be proud of.
I think of the new Tacoma Narrows Bridge just south of Seattle—the longest new suspension span built in the United States in 40 years. This project has dramatically upgraded the regional infrastructure and benefitted local communities. I want young men and women to know that this is what they can be a part of—work that changes the world in which they live.
The new administration has become engaged with these issues through passage of the American Recovery and Reinvestment Act (ARRA). There may have been disagreement over some specifics in the legislation, but there was consensus that something had to be done quickly. In April of this year alone, 539,000 jobs were lost, 110,000 of them in construction.
We should be encouraged by the government’s swift response. We also should be encouraged that the stimulus package is focused on some of the long-term challenges we face—energy, infrastructure and jobs.
The stimulus package creates a Clean Energy Finance Authority and Renewable Tax Credits that together will leverage an additional $100 billion in private investment in the renewables sector.
The legislation provides a $150 billion investment in infrastructure, including investments in public transit and high speed rail, upgrading the nation’s electricity grid, and a new initiative to expand broadband coverage throughout the nation.
One of the principal drivers of the legislation was the need to put people back to work. We’re seeing positive results in the “shovel ready” jobs. More importantly, we can begin to imagine the scale of job creation if we implement a long-term, comprehensive energy and infrastructure plan.
The stimulus package is important but it is not the long-term solution. By definition, the stimulus package was a “jump start.” It was not intended to be a solution to long-term issues, but it should help us get there. Now that we are moving, we must grapple with the long-range economic issues facing the country. These issues intersect at the juncture of government policy, the capability of industry and the capacity, needs and skills of our workforce.
Let me give you an example in the field of nuclear energy; one that is local to this area, and that I am familiar with. Nuclear energy accounts for 20 percent of the nation's electricity supply and has remained essentially stagnant, as no new nuclear reactor has come on-line in 20 years.
Since late 2007, 17 U.S. companies have sought federal approval to construct and operate 26 new nuclear reactors. The Nuclear Regulatory Commission expects as many as 22 license applications could be submitted by 2010 to build 33 new nuclear energy facilities.
According to the Nuclear Energy Institute, the average operating nuclear energy facility generates $430 million in total regional economic output.
UniStar Nuclear Energy, a joint venture between Constellation Energy and EDF, intends to build a new nuclear energy facility at Calvert Cliffs in Maryland. The new facility will generate 1,600 megawatts of carbon-emissions-free electricity, enough to power 1.3 million homes. At peak, the project will have a combination of 5000 engineering and construction jobs, representing tens of millions of job-hours. A well-developed, national plan for new nuclear energy will mean hundreds of millions of job-hours. That’s long term economic growth.
Just last week, Bechtel Construction Company, the Building and Construction Trades Department, AFL-CIO and the National Construction Alliance II signed a Project Labor Agreement for Calvert Cliffs Unit 3. With this agreement, organized labor is proactively and innovatively taking steps to be an efficient and willing partner in the stimulus works and long-term infrastructure solutions that will be required.
In addition, the owner, the builder and the unions have committed up to $9 million for worker training, including a new training facility. This will help ensure that we have enough skilled workers to construct the facility.
Federal and state governments are involved in moving forward with this and other new nuclear plants. In particular, the federal government has streamlined the federal permitting process, and is ready to provide loan guarantees for selected nuclear projects. Calvert Cliffs was selected by the U.S. Department of Energy as one of four projects to enter the final phase of due diligence for a portion of $18.5 billion in federal loan guarantees for advanced nuclear projects.
Businesses are retooling, improving their processes, and revamping their management models to achieve the levels of quality and safety demanded by the new nuclear era.
This project provides a real-world example of the complexities involved and how state and federal government, business and labor can work together to meet a critical national need.
Everyone in this room and the organizations they represent all have a stake in the future and a responsibility to collaborate as we address the issues facing the country.
There is general consensus on the broad economic goals, but not necessarily the specific policies to meet the goals.
The construction industry has a role and responsibility in both the policy debate and the implementation of the policies that emerge. We must bring our best thinking, our experience and our expertise to the debate and to the public policies that result.
We do not have to agree on every policy or proposed solution. But we do need to work through the complexity quickly and together to get some working examples on a large scale that represent new jobs, world-class infrastructure, and long term sustainable growth. We are a critical component of the necessary partnership to meet the country’s needs.
Within this partnership, we each have our own perspectives and responsibilities. The natural tension that may exist among various partners is not an impediment to success. In fact, it should be leveraged and harnessed to accomplish great works.
From my perspective, I want America to have a world class infrastructure built with a commitment to safety, quality and accountability. With regard to safety, I was stunned to hear that the government might be concerned that in this down economy we as an industry might let safety go. I want to tell you – speaking on behalf of the industry – we will not let safety go. We will remain focused on safety throughout economic upturns and downturns.
I want my colleagues at Bechtel and my partners and colleagues in this room to wear our hard hats and steel-toed boots proudly. I want a new generation to know that this construction uniform represents a bright and rewarding future.
I want to join with you in creating a collective sense of urgency and professionalism to solve our complex issues with creative solutions and expedited major projects to build.
It has been pleasure to be with you here today and I look forward to working with many of you to accomplish what we and America need.