On the latest episode of Calfee NOW, Josh Sanders, Vice Chair of Calfee's Government Relations and Legislation practice group, and Jake Blake, Partner with Calfee's Litigation practice group, spoke with Valerie Pope, Executive Director of the Mechanical Contractors Association of Ohio (MCAO).
Topics discussed included:
- The Mechanical Contractors Association and what its role is in Ohio
- The scope and size of the Intel project and what it means for the construction industry
- The MCAO's initiatives in the long-term and how that has put in place the infrastructure to handle the size and scope of the Intel project
- Intel's emphasis on safety
Welcome to another edition of Calfee Now, my name is Jake Blake with Calfee, Halter and Griswold. I'm a partner in Calfee's litigation and construction groups. With me today is Josh Sanders, Partner and Vice Chair in Calfee's Government Relations group, and also Valerie Pope, Executive Director of the Mechanical Contractors Association of Ohio. I guess we'd just like to throw it to Valerie first and get her to talk a little bit about the Mechanical Contractors Association and what its role is in Ohio.
Well, thanks for having me today. We really appreciate, appreciate the opportunity, to talk about this. It's an exciting time for the industry and certainly for Ohio. The Mechanical Contractors Association of Ohio is made up of mechanical and sheet metal contractors, specialty contractors, who perform design, construction and service, projects on projects that are plumbing, piping, H V A C, specialty fabrication, that kind of thing. All of our members were a little bit unique in that all of our members employ crafts people who are members of the United Association of Plumbers and Pipe Fitters, or the Sheet Metal Workers International Association. So, they're all union employing contractors. That's what knits them together. And then the MCA of Ohio has been in some iteration or another since the sixties, to work on kind of the legislative, judicial and agency issues that are important to the industry. We also do some educational things. We put on a convention and those kinds of things, but the primary goal is the government affairs. So that's why we appreciate our partnership with Calfee so much.
Well, in Valerie, I've obviously had the pleasure of working with you and the association on a lot of those government relation projects, but now Intel coming and it's a whole new world out there, and I think everybody's excited, maybe nervous about this project and also know that you've had direct talks with, with Intel. And so just interested to hear kind of, you know, your thoughts and what you can tell us on the scope, size of this project, and maybe get into a little of what this really means for the entire construction industry.
Right. So I have kind of a dual role in this whole scenario, with Intel coming to Columbus and that I'm also the executive director of the Mechanical Contractors Association of Central Ohio. And so, I'm directly involved in the labor relations here in central Ohio, and then of course, the government relations statewide. So there's a lot of tentacles to this. But in my role with Central Ohio, I've been lucky enough to meet with the Intel construction and procurement folks and had the opportunity to go out to Oregon and see kind of the, the mothership and get to experience the, the fabs out there and, and really see what is coming. And it was, genuinely mind blowing. Um, everything from little quarter inch pipe and imagine it stacked, stacked, stacked, stacked, stacked everything is so compact, up to 72 inch pipe, and everything in between and all the, you know, duct work and the electrical, um, packed so tightly into those tools and everything that goes into, you know feeding power and gas and fluids to those tools, to everything that's involved in scrubbing, you know, all those chemicals then back out and you know, trying to keep this as light a footprint as possible.
I'll never look at those little chips again and take them for granted. You know, when you see all the resources human resources, environmental resources that go into these, it's, it is astounding. But to see it all come together and to know that we're going to do that in Ohio, and to be there with the craftspeople who are going to ultimately be responsible for putting it together was pretty amazing. The timeline, they call it Intel speed. The timeline is also amazing. So they're talking about breaking ground this summer. Ideally, I know that they're already doing some site work out there, and obviously all of the info after they break ground now, that would be light speed, <laugh> or construction, I mean, I don't need to tell you guys. You, you've seen the contracts and Jacob helped us a lot.
So, but they're talking about at their peak 2000 just pipe fitters. And you know, not to mention, you know, all the other specialty crafts, another probably thousand people if you're talking about insulators and, um, sheet metal workers and, and those kinds of things. And probably another a thousand electrical workers. So it's, going to be staggering in terms of the number of crafts people that we have here right now. And that's the first phase. And, you know, really the, the plan that the, that they have really for Ohio and the acreage that they have, and, and, you know, um, based on how things go with Chips for America or the Fabs Act you know, if all of those phases get built, you're talking about ongoing construction for 10 years, and a workforce that stays up there as they bring tools in and decommissioned tools that also takes construction crafts people, to do. So there'll be a permanent construction workforce up there as well.
Well, kind of along those lines then, you know, what's that mean for workforce constraints? You know, what are your members anticipating? And then all those things that go along with such a large pro. I assume there's got to be housing and transportation and a whole list of things that's going to go along with that kind of, that that many people working on one site.
Right. In a site where, I mean, bless all the people from the county and the city and, the state that have to put in the infrastructure up there. You know, for those of us that are familiar from central Ohio with that area, those little two-lane roads aren't going to, you know, let alone, the water processing plants and, you know, running the amount of electricity that we need out there. Because you know, that's a corridor right now that already has Google and Facebook and, you know, whatever Amazon is here in town. So those projects already had us really close to our max. We’ve got several big hospital projects on the horizon with Children's, the airport project over, you know, at, at John Glenn. You know, we were already projected to have a manpower shortage before Intel announced. We were already taking steps locally to try to in, you know, really expand the, the size of our local workforce way before six, you know, six, 12 months before this was announced. So it, it was a very strange, Christmas present, let's put it that way, <laugh> for the central Ohio construction market.
And, and do you see that then having a ripple effect on other projects out there?
I do, because not only do you have the competition for materials. I mean, you hear all the time in the news material, price escalation, um, supply chain problems, shortages in general. We're already dealing with that. We're already dealing with, um, workforce, you know, like pay ablation too, you know, as we have trouble getting people kind of back into the workforce, you know, kind of post covid. And so I, I think, how do I want to say this? There's a real desire by the contractors to be able to service their long term contract, their long term customers, but it's going to be for the first time, kind of, a contractor's market. And I think these owners, whether they be public owners or private owners, are going to literally be competing for contractors to bid their work because everybody's going to be maxed out. And I, you know, I think that's especially going to be a, a significant issue for the public owners and for public projects.
So you, you talked a little bit about, what you've done in the short term to lay the groundwork to receive a project of this size and scope. Can you talk more generally about the mechanical contractors, association's, missions and initiatives sort of in the long term, that that has helped maybe, create the infrastructure and the ecosystem that not only is going to allow Ohio to exceed, but actually enticed intel to come here in the first place?
Well, we've got a lot of things going for us. There’s always been, and I mean like a hundred years always been a real emphasis on joint training. And, you know, to a, an additional extent, joint healthcare benefits, joint retirement benefits. I mean, you know, there's kind of a holistic system here for recruitment when you talk about recruiting people in, paying them a wage that they can, that that's more than a living wage. It's, you know, a career wage and career benefits and, and then supporting that with training. And that's not just in Ohio. I mean, we're enabled by a national, you know, partnership with our, with the unions and, you know, with the Mechanical Contractors Association nationally and, and MNA, which is the sheet metal counterpart to that. Providing those kinds of training opportunities and the curriculum that we use, and then the local dollars that have gone in year after year after year to make sure that our training facilities, were up to date, that they were, they were training the cutting edge.
And now we have this great opportunity where, because these plants have been built in other areas of the country, in Oregon, in Arizona, in New Mexico, those curriculums are already developed. They know exactly how to set up a training center to do this work. They have the instructors that are ready to go. We've already sent our local instructors to be trained to do things like orbital welding, you know, which is a skill that we don't have a ton of call for in central Ohio. We just don't have those kind of industries, right? So we're already up and running with those things. And, you know, part of seeing that the workforce shortage was coming, we had already bought a building for a training center, and we're in the middle of a renovation. So now we're going to be able to have not only the existing space, but this whole new training facility over, kind of off of Robert's Road, that part of Columbus off of two 70, where, you know, we're going to need every inch of that, you know, to bring in the number of apprentices that we need, to train the journeymen that are existing.
And to organize in frankly, any, you know, journeymen that is interested in, in doing that work, to come in, be trained, and be able to be dispatched out on a job and have the skills that they need to really work as much as they want to work. I mean, Intel is, you know, their normal is overtime. You know, and we're talking about highly paid jobs anyway. And then when you talk about the overtime and the amount of work that's available, it is a huge opportunity for central Ohio, and it's a huge opportunity for underemployed folks. It's a huge opportunity for younger people that are interested in getting into the trades. When I was out in Portland, I was really struck by the youth of the workforce out there, and I'm talking about their construction workforce. We weren't with the Intel inside folks, right?
We were with the construction folks and the youth, and the diversity of that workforce was astounding. And I, I just feel like this is such a moment, certainly for central Ohio, but really I think all of Ohio. And I think this is going to be huge growth for us because these jobs are long term great jobs and, and it just makes the boom that's already happening with the hospitals and the airport and all that stuff. This is the first part of our boom. This isn't all of our boom. I think central Ohio's going to continue to explode, frankly, with the people that we're going to attract and the jobs that we're going to attract it. It's a really exciting time for me. But we could not be doing this without that infrastructure that is set up inherently between, you know, our contractors and our labor partners and that investment.
And, you know, if there was ever a long-term payoff for everything that we do when we talk about prevailing wage, this is it. You know, though, you know, that kind of structure, that kind of making sure that, there's a floor, right? So that you do have dollars for training, and you can keep a workforce ready to go. We would've never gotten this plant if we didn't have this workforce, and we didn't have the infrastructure to bring in travelers from around Ohio, from neighboring states even, in to do this work. Because we're in a situation where if we didn't have a system of travelers who, you know, that the training is uniform. I mean, that's the other, you know, beautiful part of apprenticeship and journeyman training, under a structure of a labor management organization is that, you know, that the training is unified.
And you know that when you bring somebody in if they say they've got this certification, it's the same certification they would've gotten in Columbus or Toledo or Dayton or Indianapolis, that it is what it is. And you can be assured that they're going to go out there and, their welds are going to pass their tests and that their skills are going to be up to fit up to date. And that their, you know, a fitter is a fitter is a fitter. And it that that's amazing for Ohio. So I, you know, I'm so glad that we're kind of in the right place at the right time.
No, that's, that's great, Valerie. And, and, and certainly we all appreciate the good work that the association has been doing to kind of lay the groundwork and set the foundation as you call it so that we can successfully receive, ultimately build and, and produce, what is, I suppose going to be the largest chip manufacturer in in the United States or the world. So that is, that's great to hear.
You know, Valerie, I think you touched on it a little bit, but what are some of the concerns? Obviously everybody's excited. I mean, as you said, tremendous opportunity, but what are some of the concerns you do see out there for members?
Well, I, I think the members are genuinely concerned that they won't be able to service their existing customer base the way they want to, you know, frankly, and the way that they have in the past. And, you know, it's kind of strange. I am a third generation MCA exec, which doesn't happen very often, but my grandfather was hired shortly after the Anheuser-Busch plant was finished in Columbus. And, you know, that was a situation where every, it was the, the last big mega project, right? For, in terms of, you know, our industry here. And at the time, you know, everybody kind of sucked into that plant. Everybody that wanted to, you know, work there, found work there, and it was great overtime, it was great pay, you know, it was same, same scenario, sort of little smaller scale, but whatever. And there was, and, and, you know, we still have contractors in the market who can remember that in some, you know, some way it's well documented.
There's a great book on local 180 9 and the MCA, if you ever want to, that they had commission, but it'll tell you all about Anheuser-Busch. But, you know, they weren't able to really service their existing customers, you know, and, and there were ramifications for the union organization, for the management organization, certainly for our contractors, some that we still have never recovered from. And, you know, I think everybody understands that past and they just don't want that to happen again, like kind of under our watch. But I, you know, I, I think that idea of owners competing for contractors really does seem quite odd to me. You know, and I, I hope that, you know, those public owners will use what's in their toolbox. You know, now, with this in mind that when there's all this private work out there, how do we make these public projects you know, attractive?
How do we make sure that you know, we aren't using archaic pay practices or in my mind, like, Hmm, systems that can't pay you when you need to be paid, you know, <laugh>, they won't be named. But, you know, those kinds of things, you know, know, how do we get some of those tool dust off, some of those tools that are already in there? Really stringent contractor pre-qualification that's already in the law, that's already in the rules. It's just a matter of, it's never going to be more important than now. And, you know, things like separate prime, I mean, if you're offering a mechanical contractor or a specialty sheet metal contractor, that they're going to be prime rather than being several tiers down, you know, that's a lot more attractive to them, than working under kind of the old, you know, the old new system or whatever. So some of the, what we need to do is go back to our roots and, you know, it's things that we've, you know, done, you know, 10, 15, 20 years ago that made public contracting more fair, that made public contracting more enticing to people, to, to my contractors. And so I don't think it's reinventing the wheel. I think it's really taken a hard look at how we award public contracts and administer them.
Well, Valerie, and that, that was a nice, I think, way to sort of, depict what the path forward could look like and probably should look like in order to benefit all that the stakeholders. Is there, is there anything else that you'd want to add, from the association's perspective?
I would say one of the things that was most apparent to me when we went out to Oregon was, and not to make a commercial for Intel, but their emphasis on safety and the conditions that their employees, not just their direct employees, but their even construction workforce out there, worked under. And, you know, it's not a, it was not about like compliance, and this is like kind of, you know, we're going to get by and we're going to comply and, you know, whatever, blah, blah. The EPA, no, it was how much it was in the forefront. It was how much it was in the planning, in the, the, the primary thought process of what they did and how they engineered it and what we were going to be there to do. And the extensive, extensive focus on the culture of safety, for their people.
And so it, when I think about what are things that could ripple out of this, you know, I think that will ripple down to all of our craftspeople. I think that will ripple down to all of our contractors because, you know, once you're, you know, exposed to that and it's more top of mind I think it's, you know, I think it has the potential to really make us all, the whole industry, better or sharper, I would say. Not that safety hasn't been a priority. It absolutely has. You know, we have had substance abuse programs and, you know, drug pre safety programs and, you know, a lot of OSHA, I mean, a lot of training. And OSHA and otherwise, and, and safety has always been a paramount concern, but I feel like this is, they really take it to another level.
Well, we are certainly happy that Intel is finding a new home here in central Ohio. And, and, and we at Calfee are equally grateful that you and your members, have done such a good job welcoming them here and you know, making this process, hopefully as smoothly as possible. And, and thank you for joining us for this edition of Calfee NOW.
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