It was to have been a new deal for exhibitors at Graph Expo, Print, and scores of other trade shows at Chicago’s McCormick Place: a set of legislative reforms aimed at making it easier and less expensive to produce events at the lakeside expo and convention center. But, a recent ruling by a federal judge has overturned some of those changes and may keep them from being retained.
On March 31, U.S. District Court Judge Ronald Guzman ruled that a bill passed by the Illinois General Assembly last May interferes with the right of McCormick Place employees, most of whom are unionized, to negotiate employment terms with contractors at events there. This means that changes related to union work rules may have to be thrown out, undoing pledges made by the Graphic Arts Show Company (GASC) and other trade show producers that had sought and won a more favorable deal for their exhibitors.
Judge Guzman has not yet entered the permanent injunction that would enforce his ruling. The Metropolitan Pier and Exposition Authority (MPEA), the public agency that owns and operates McCormick Place, has said that all changes will remain in effect while it seeks a stay of implementation from Judge Guzman or, failing to get that, files an appeal with the 7th U.S. Circuit Court of Appeals.
If the appeal doesn’t succeed, and if Judge Guzman’s ruling is implemented as written, it would mean the end of relief for exhibitors from the high cost of labor and the restrictive work rules that have made McCormick Place a byword for the agonies of putting on trade shows in highly unionized environments. MPEA, with the backing of GASC and other trade show organizers, had said that extensive changes were needed in order to keep major trade shows from abandoning Chicago as a venue.
A Chicago Tribune editorial on Judge Guzman’s ruling worries that McCormick Place unions will “take Chicago back to its bad old days as Gouge City” if MPEA’s appeal goes nowhere.
Exactly what awaits exhibitors at Graph Expo 2011 in September isn’t clear. But this blog, citing a contact with an official of the Chicago Convention and Tourism Bureau and a webinar led by the general manager of McCormick Place, says that exhibitors could lose the relief that had been obtained in relation to union overtime pay; self-assembly of booths; vehicle access; and labor crew size. Some aspects of the reforms enacted last year, including protection from markup of food service costs, will not be impacted, says the blog.
Judge Guzman’s ruling is a particular setback for GASC, which is striving to reinvigorate the Graph Expo and Print shows after several recession-fraught years of declining attendance and diminished vendor participation. In an interview with WhatTheyThink last year, Ralph Nappi, president of GASC, said that the reform legislation was key to convincing Graph Expo and Print exhibitors that the shows should be kept in Chicago.
Today, in response to a request from WhatTheyThink, GASC commented on the situation as follows:
“Graphic Arts Show Company is disappointed at the judge’s ruling. However, a stay is being requested and an appeal filed by MPEA.
“Ironically, although the stay has not yet been granted, the trades have decided to continue working under the newer work rules passed in May 2010 and enjoyed at GRAPH EXPO 2010 until the appeal is completed. GASC is optimistic that the positive changes passed through Illinois State legislation to make Chicago’s McCormick Place competitive with other primary US trade show markets will continue because to go backwards would hurt Chicago more than if the changes had never occurred.”
Discussion
By Edwin on Apr 29, 2011
You said, “If the appeal doesn’t succeed, and if Judge Guzman’s ruling is implemented as written, it would mean the end of relief for exhibitors from the high cost of labor….”
What really drives up the costs of doing business at McCormick Place? It’s so easy to say “labor costs,” but are there not other entities that more directly determine the increased cost of services to an exhibitor? What about the show contractors that “mark up” costs—including labor—to exhibitors? Did you know that the carpenters, for example, at McCormick Place are only compensated for hours actually worked setting up and dismantling shows? Did you know that the contractor hits the exhibitor with a substantial markup over what the union worker actually earns for an hour of work?
Don’t be fooled by MPEA spin. While the McCormick Place leadership tirelessly tries to blame labor, Judge Guzman in his decision touched on this markup issue by saying that limiting contractors’ markups wasn't even considered by MPEA as a potential cost-saving measure, and that the goal of reducing exhibitors’ costs was “left largely to the contractors’ discretion.” Why did MPEA not consider this as an option? Shouldn’t limiting this seemingly excessive markup be considered? The judge added in his decision that a multitude of other exhibitor cost-savings options, some which involve MPEA finances and operations, weren’t considered, either. If you read Judge Guzman’s decision, it doesn't appear MPEA was seriously looking at anyone else to share in the cost savings. MPEA—with the help of the legislature—only sought to blame and subsequently fund its cost reductions solely on the backs of labor. This was the determination of an impartial federal court, not labor…not the unions.
Your readers might also be interested to know that while electrical services got an overhaul, that may not be resulting in exhibitor cost savings as purported when MPEA and the state ramrodded this legislation into place.
By Frank Libby on Apr 29, 2011
“It is not clear that the statute advances the state’s goal of reducing exhibitors’ costs. The extent, if any, to which the statute achieves its asserted goal is left largely to the contractors’ discretion.”
(Federal court ruling, March 31, 2011)
Dear Patrick:
It’s important for readers to recognize and understand that when you source the Chicago Convention and Tourism Bureau (CCTB) and MPEA along with their contacts, statements, webinars, etc., you are in essence relaying information from the very entities called out by the courts. When a ruling affecting the basic rights of working men and women was handed down on March 31 by a U.S. District Court, the decision overturned key components of legislation passed last year by the Illinois General Assembly. While we applaud the decision of the presiding judge, we don't necessarily celebrate it. The overtones within your article provide no reason for joy. Our day of celebration will only come when a real long-term solution to the funding problems at McCormick Place is a reality.
The judge also recognized and stated that the hastily enacted legislation “does not cap the markups show contractors can apply to labor charges before passing them on to the exhibitors” and that “the record shows that there are a number of other ways for the state to reach that goal (exhibitor cost reductions) that intrude less on labor.” Among the many cost-saving opportunities cited that were ignored include reducing or eliminating MPEA profits from facility rentals and parking services, eliminating MPEA’s subsidy of the CCTB, and streamlining MPEA’s governance structure. It is also the opinion of the court that “there is no evidence that the state considered acting on any of them instead of, or as a precursor to, enacting (this legislation.)”
It doesn't appear that MPEA was seriously looking at anyone else to share in the burden of cost savings. MPEA—with the help of the legislature—only sought to blame and subsequently fund its cost reductions solely on the backs of workers.
Without a doubt there are problems at McCormick Place, and high costs are among them. McCormick Place is at a serious financial disadvantage to competitors in Las Vegas and Orlando to name just a couple. Those convention facilities receive substantial financial commitments from their respective cities and states. Because of those large financial commitments they are better positioned to ensure lower overall costs to exhibitors. This is the number one problem that needs to be addressed and solved. I do know the answer does not lie with attempts to strip away workers’ rights through legislation. Nor will the answer be found through prolonged legal maneuverings or by playing the blame game.
The Carpenters union remains committed to Chicago, its trade show business and the state’s economic health. There is no better place in the country to do business, and our workforce takes pride in that fact. I have said it before and I will say it again, I am ready, willing and available to sit down with all interested parties to begin a dialogue. A dialogue that must lead to real meaningful solutions to the cost issues at McCormick Place. Let’s get to work and get this right.
Frank T. Libby
President
Chicago Regional Council of Carpenters
By Bruce on May 02, 2011
Dear GASC,
The beautiful thing about America is that you have Choices.
We would Love to have GASC move to Orlando where the Sun always Shines and Life is just Better.
You will have cheaper Flights, Hotels and attract a broader base of attendees....
By Mike on May 03, 2011
Move the show out of Chicago. If enough shows move the folks in Chicago will fix the problems.
By Docucopies on May 03, 2011
It would certainly be nice to have it in a warmer place, maybe somewhere we can get to with a 3-hour plane ride instead of a 7-hour drive... But we're not complaining. :)
By Noel Ward on May 05, 2011
The platitudes and justifications of Mr. Libby and "Edwin" sound a whole lot like defensive posturing with a side order of political grandstanding.
GASC needs to have the courage to just say "NO," and pull the plug on Chicago and McCormick Place. Orlando or Las Vegas would be more than eager to fill hotel rooms, restaurants and convention floor space with vendors and show attendees.
Nothing more than tradition binds Graph Expo to the Windy City. But times change and there's no reason to out up with the business-as-usual politics of Chicago, MPEA, and CCTB. Trade shows are by nature totally portable. Move the show.
By Greg on May 06, 2011
Anybody that's exhibited at McCormick knows the routine - you literally can't plug a laptop into an outlet at your booth; the union guy has to do it. The only way you get a union guy to do it? - "tip" him. You want your truck unloaded? More "tips".. Beyond corrupt, McCormick and the union tilt the scales to an unctuous and slimy place where to get anything done by a union member, you've gotta hand out the money.. Nice work if you can get. THAT'S the main reason why everyone who works the show, hates the show.
By Mike T on Jun 24, 2011
Typical union response...they just don't get it. Contractor markups are to blame? The 10% they make is too much? Maybe the labor rates with benefits that equal over $60 per hour has something to do with it along with the string of various payroll taxes, liability insurance, expensive workmen's comp insurance, etc that are added on.
Discussion
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