A Speech Given by an AWCI Executive Makes 1992 Look Like 2010
In honor of AWCI’s Convention this month, we take you back 18 years to AWCI’s 75th Diamond Anniversary Convention, which was held at the end of March in 1992 in Washington, D.C. In 1992, it was traditional for the chairman of AWCI’s Convention Committee to give the opening remarks.
Joseph A. Feldner, who is president and chief executive officer of McNulty Bros. Company in Chicago, was AWCI’s convention committee chairman at that time. He said he "really enjoyed” being chairman of AWCI’s Convention Committee and "had a lot of fun doing it.” But 1992 saw the construction industry plagued by a recession, much like what we are experiencing today, and Feldner’s speech is one that could have been given today.
"Reflections of the past, plans for the future.” That is our theme. … [W]elcome to the place where we make that theme come alive, our nation’s capital, Washington, D.C.
It is especially appropriate that in this year of anxious, sleepless nights and strenuous, challenging days, we should be celebrating our diamond jubilee. Why? Because diamonds are the hardest, most durable material known to man, yet they have a brilliance that is unsurpassed, a brilliance that can be fashioned into a masterpiece. Lately our industry has been through some difficult, troubling times, but like the diamond we’re durable and tough. Like the diamond, our inner brilliance will be revealed as we create a shining future for our industry and ourselves. And just as the diamond’s inner brilliance is exposed by the stone cutter’s tools, so does our convention hone us to a fine edge as we plan for and move toward our destiny.
Just as diamonds are known by their color, cut, clarity and carat weight, AWCI is known by its own four Cs—character, courage, conviction and conscientiousness. They are the qualities that allow us to reflect on a proud past and to prepare for a prosperous future.
When we opened our 74th convention in San Francisco last year, we talked about tough times. Today, as we open our 75th, we know that times are tougher.
This recession has the construction industry suffering far beyond what the consolidated numbers for unemployment, housing starts, or gypsum and steel production indicate. The commercial and industrial segments of the building construction industry have been decimated with plummeting sales, skyrocketing competition amongst the survivors and constantly rising unemployment rates—not only unemployment in the skilled trades, but in the white collar segment as well. And where the white collar segment has not shrunk, its disposable income has.
A dilemma? Yes, but not a dilemma of our making. Nor is it the fault of organized labor. Or unorganized labor. And it’s not the fault of construction management or even the industry as a while. So where does the problem lie?
Until recently, the business of American business was making products. Manufacturing. This grew out of an agricultural economy that has long since passed away. Now there are those who are trying to convince us that manufacturing has passed away too, and that its replacement is service. But service as the basis of an economy is myth.
Unfortunately, our government has used this myth as the rationale for too many of its policies, policies that have demolished the manufacturing sector with harsh, short-sighted regulations, and have permitted unfair foreign competition to wreak havoc on our industries. And what about all that foreign assistance? Those handouts aren’t helping us here at home. In fact, they’re not even helping foreign people much because that money is going straight to foreign government officials overseas. Put all this together and what have you got? An obsolete American rust belt. Think about it. A rust belt. It’s no longer a term of national shame, but what we’ve come to accept as our name.
But it doesn’t end there. The problem is compounded by developers and lenders who built wildly without any consideration of their end users. Had manufacturers without markets churned out products to the same extent, they would have drowned. But the developers just factored in the interest it took to have the building sitting around awhile. They didn’t think they would drown, but drown they did. It just took a little longer.
Unfortunately, the construction industry got sucked into the undertow, an undertow that originated primarily, but not exclusively, in the federal government.
What happened is that the government lost sight of the fact that American prosperity is based on manufacturing, on the inventing and making of products, products that are bought all over the world—or used to be.
By contrast, the chief product of the service industry is aid—aid to help producers and manufacturers cope with the government. For example, our per capita ratio of lawyers and government workers should give us the most orderly and reasonable society on earth. It doesn’t. In fact, it’s nonproductive, Now I’m not bashing lawyers, I’m merely pointing out the folly of looking at all those busy service people and thinking that a service system will make our economy tick right along.
So what’s the solution? Short term, the consensus is that we need more government spending and lower interest rates. That’s fine, as long as we acknowledge that it won’t solve the long-term, underlying problem. It’s like this. A painkiller will temporarily relieve the headache of a brain tumor patient, but it’s no substitute for a long-term cure.
So what is the long-term solution? First we need to revamp our tax policy. As it stands, we punish those who save, those who build capital for investment or retirement. Then we reward those who go into debt. We have a luxury tax that misses the rich and destroys businesses belonging to the middle class. I would expect this tax structure costs the government revenue.
Doesn’t it make more sense to reward those who create real, meaningful jobs? Those who invest wisely and risk carefully in order to produce? And what about meaningful industrial and energy policies? We need both.
Finally, we can no longer compete with our own government for capital, especially when that government is dictating the rules of the game. We need to face up to the federal deficit, to know how much debt is too much debt. I’m not enough of an economist to know what that amount is, but what scares me is that the economists at the controls—if there are any controls—don’t know either.
What I do know is that there isn’t a contractor, Manufacturer or supplier in this room who doesn’t know the value of cash. That’s why we only borrow when we have to and when we can see the means of repayment.
Unfortunately, Washington doesn’t see it that way. Washington does not borrow to satisfy some overwhelming need. It borrows to satisfy an army of special interest groups. Ironically, that’s what we will become when we demand more governmental spending to jump-start our segment of the economy.
Theodore H. White [1915–1986; political journalist, historian and novelist] said "the flood of money that gushes into politics today is a pollution of democracy.” I’m not quite that pessimistic, but I’m not willing to ignore Mr. White either. So what does this mean for us?
To date, contractors have not controlled their own destiny. Instead we’ve been a reactive industry, trying to maintain an orderly market in which to ply our trade, in which to build and remodel structures owned by somebody else. We tend to react—not pro-act—when faced with disruptive forces, whether those forces are new government regulations, labor demands or simply trends in our business.
We also tend to be indirect. We don’t tell our government we need to produce sound buildings at competitive price. We let the architects, the developers, the manufacturers, the unions, the special interest groups and the occasional do-gooders do it for us.
No more. That time has come to an end, and the first step came when we banded together as an association—an association with national influence! To be an association with national influence, we have to do more than old a convention and give speeches directed to Congress. Because if this is all we do, all we’ll get are generic form letters drafted by junior staffers telling us that Congressperson So-and-So appreciated hearing from the folks back home.
Instead we must exercise our true right, our true abill.ity to petition and influence our government. How? Let your board of directors, your executive committee and your executive directory help you lobby and communicate. Let’s take advantage of our close relationship with labor, because it is their membership we are laying off. We have mutual concerns and causes, and an advantage in our combined numbers.
We can start with the mail. Our elected representatives and government officials do read their mail—they can’t afford not to. So send them some. Send them a lot. Send it to them in proportion to the sleepless nights and tight-gut mornings they’ve sent us over the last few years. … You have to inform them. You have to influence them. It lies with you. Talk. Make phone calls. Write letter. Charge your board, your executive committee and your executive director with going forward. We can make something happen. With labor as our brother and manufacturing as our benefactor, good ideas can be created, refined and realized.
Don’t put it off. Contact your government officials today. Remember: Our concerns are universal. What happens here in America influences our world and our future. So let’s make it an AWCI influence and an AWCI future.