At Vancouver grain terminal, imported labor draws questions from lawmakers

By DON McINTOSH, Associate Editor

When construction cranes popped up last year on the waterfront just west of downtown Vancouver, Painters Local 10 President Roben White wanted to know who was doing the work.

White, a Vancouver resident and member of the executive board of Southwest Washington Central Labor Council, hadn’t heard about local union members getting work on the project, and wanted to see for himself. He headed down to the site, Port of Vancouver Terminal 2, and found a parking lot full of out-of-state license plates. At shift change, White says, he followed a van full of workers to the Staybridge Suites hotel in Northeast Vancouver. White said he was unable to communicate with the workers, who were Spanish speakers, but their need for a hotel strongly suggested they weren’t local. And that rubbed White the wrong way.

The project they were working on — an $80 million expansion of the United Grain export terminal — is on public land, leased long-term from the Port of Vancouver. The Port of Vancouver, created by Clark County taxpayers in 1912, is a tax-supported public agency with a mission of economic development.

“This land was intended to benefit the community as a whole, not just a business or the port as an entity,” White told the Labor Press.

Moreover, as White points out, the project benefits from several kinds of public assistance:

  • A tax break. In Washington, businesses pay a 6.5 percent sales tax when they build a new facility. But developers of large warehouses and grain elevators get a pass: They pay the tax, then fill out an application to have it rebated in full.
  • Rail improvements. The Port of Vancouver is half-way through its 10-year $150 million West Vancouver Freight Access project. One component of the project — estimated at $8 million — is a set of track improvements to serve the United Grain terminal. The improvements will double the number of rail cars that can be unloaded at one time, from 11 cars to 22. Under its lease agreement with the Port of Vancouver, United Grain will pay $10 each for the first 30,000 rail cars a year (or $300,000 a year) toward that cost.
  • Channel deepening. The publicly funded 20-year effort to deepen the Columbia River shipping channel — from 40 to 43 feet — means that approximately 7,200 tons of additional grain can be loaded onto each vessel calling at the Port of Vancouver.

Meanwhile, White searched online, and the general contractor on the United Grain project — Younglove Construction LLC of Sioux City, Iowa — turned up in a 2006 Wall Street Journal article about how the use of immigrant workers from Mexico is driving down U.S. wages in construction. In the article, Younglove is mentioned as one of several Midwest silo construction companies using recruiters on the U.S.-Mexico border.

United Grain’s export terminal expansion is one of Vancouver’s largest construction projects. When completed in September 2012, 24 new silos will provide 60,000 metric tons of storage space for corn and soybeans. And at 299 feet, it’s now the tallest structure in Clark County. United Grain, founded in Portland in 1969, became a subsidiary of the Japanese conglomerate Mitsui in 1997.

Dave Ritchey, business manager of Vancouver-based Laborers Local 335, says he approached Younglove about employing local union labor, but was rebuffed. Local 335 has over 200 members out of work. The rate for a general laborer on a project like that is $28.51, but Ritchey said workers he spoke with on the job were earning a top rate of $12 an hour.

White, joined by other local labor leaders, began complaining about the project to any local politician who would listen. On March 3, three Washington state representatives took action. Vancouver Democrats Jim Moeller, Tim Probst, and Sharon Wylie wrote a letter to United Grain and Younglove Construction, based on information White provided.

“It has come to our attention that Younglove Construction hired approximately 200 foreign workers under the H1B1 Visa program and brought them in Vancouver to build the grain silo,” the lawmakers wrote. “We are concerned that these 200 jobs could and should have been filled by local workers, at a time when local jobs are direly needed. It is clear that the construction method used in building this grain silo is a skill that is readily available among workers in our region.”

Legislators also asked Younglove for a record of workplace accidents, and confirmation of the company’s workers’ compensation coverage.

Five days later, Younglove President Michael Gunsch issued a 17-point statement in response. Slipform construction is very complicated and requires specialized skills of employees, Gunsch wrote, and Younglove is one of a very small number of companies with the experience and capability to do it. In 14 months on the site, the vast majority of employees have been hired locally and live in the local area. About 20 locally-based subcontractors have done portions of the work, and Younglove plans to subcontract to at least 10 more before the project is complete. The slip pour portion of the work was only a very few weeks in total, in pours that were weeks and months apart. Moreover, Younglove has never used the H1B1 Visa Program for short-term slip workers, Gunsch wrote, and it uses the Department of Homeland Security’s E-Verify program to verify each new hire’s legal right to work in the United States. Finally, Gunsch said its crew has worked 170,000 hours with only one lost-time accident. And all its employees on the project have workers’ compensation insurance purchased from a private insurance company under the Longshoremen and Harbor Workers Compensation Act.

Younglove declined to divulge the names of its local contractors, but calls by the Labor Press turned up several. Whitaker/Ellis — which employs members of Cement Masons Local 555 — did the roughly one-and-a-half acre concrete foundation for the silos. Rebar for the foundations was installed by local firm R2M2 Rebar and Stressing, and hopper installation and structural work were performed by Triad Mechanical; both employ members of Iron Workers Local 29. Electrical work is being performed by Cherry City Electric, signatory with IBEW Local 48. And some crane work was performed by Campbell Crane, which is signatory with Operating Engineers Local 701.

United Grain CEO Tony Flagg told the Labor Press that slipform silo construction doesn’t lend itself to recruiting local workers. To avoid seams, concrete is continuously poured in a circular form that is raised about an inch an hour.

“In our case, you need almost 240 people to do this work for about a week, and they work typically 12-hour shifts,” Flagg said. “It’s very difficult to go out and find 240 people to do this and train them to work as a team so this can go up at a uniform speed. So crews have developed that travel around the United States and Canada, and this is the work they specialize in.”

But union leaders express skepticism. Ritchey said he himself worked on such a silo in Vancouver. Brett Hinsley, business manager at 378-member Cement Masons Local 555, was glad to have members working on the United Grain foundation, but said his 50 to 60 out-of-work members would have liked to have done the slipform work as well.

Third generation Longshoreman Cager Clabaugh, former president of 193-member Local 4 of the International Longshore and Warehouse  Union, said nearby longshore workers can see the work going on from cameras in their cranes.

“They say this is specialized construction. We’re not that stupid,” Clabaugh said. “Basically all those guys are doing is pushing wheelbarrows. Anybody who’s got a garden is qualified to work there.”

Union ironworkers, cement masons, laborers, and operating engineers can look up at silos in Portland, Longview and Kalama that they helped build. But that slipform work, which used to be exclusively union on the West Coast, is now exclusively non-union, says Mark Sorensen, president of R2M2 Rebar and Stressing. That’s because firms like Sorensen’s can no longer compete against low-wage nonunion firms from the Midwest. Sorensen said R2M2’s last slipform project was an Anheuser-Busch silo in Idaho Falls six years ago. When EGT took bids for work on its grain terminal project in Longview, R2M2’s bid to do rebar on the slipform was triple the cost of the winning bid, Sorensen said. R2M2 did rebar on the foundation at United Grain, but wasn’t given an opportunity to bid on the slipform.

For White, the overriding issue is how to maximize local development to benefit local workers.

“We only have a finite amount of industrial property we can work with that’s supposed to benefit the community at large,” White said, “and I don’t think it’s unreasonable to ask that we who live in the community get more benefit out of the finite property that we own.”

Rep. Moeller, who took the lead on the letter to United Grain and Younglove, said for the future he wants more transparency when tax breaks are given out. In January, Moeller introduced a bill in the Washington Legislature to require companies receiving warehouse and grain elevator tax exemptions to file an annual accountability survey that would list the total number of jobs, the percentage of those that are full-time, part-time and temporary, the number that have medical, dental, and retirement benefits, and roughly the wages. The survey — intended to give legislators information to judge the effectiveness of tax breaks — is filled out by recipients of 32 other tax exemptions. The bill went nowhere this year, but Moeller says he plans to reintroduce it.

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