Leaders and members of the city’s hospitality industry
gathered Wednesday for an event held by the Pennsylvania Restaurant and Lodging
Association at Harvest Seasonal Grill and Wine Bar on 200 S. 40th St. in
University City.
The highlight of the night was when the Convention Center's
newly appointed President and CEO John McNichol spoke in front of the crowd of
dozens to give an update on the Convention Center’s current standing with its
unions, how it got there and the center’s future.
Here are a few
highlights of his speech:
On becoming president
and CEO:
“When I took this job, I took it only because I had served
on the board for eight year as a member and vice chairman of the board of
directors. I was appointed by the Speaker of the House Rep. Sam Smith and
served in those capacities. Over the years saw things that I knew had to
change. As a board member, I was dedicated to try and change some of those
things, particularly around the issues of labor, labor supply, how we treated
our customers and how we were fulfilling the promise of this economic engine we
call the Convention Center.”
The quality of the Convention Center:
“Eleven years ago in 2003 when [the customer satisfaction
agreement] first went into place, we were at the same threshold, where the show
floor was the wild, wild west. Unions were literally fighting on the docks. We
had pagans and warlocks brought in by some of these unions to enforce their own
jurisdictional guidelines. It was that bad, if you can imagine. [There were]
criminal elements in the building, basically, that we had to deal with from
time to time.”
The previous CSA was
“meaningless”:
“At the time, Mayor John Street and others stepped up and
basically put a gun to the union’s heads and said, “Here’s the new deal. Sign
this. We’re putting in a labor supply program and we’re carving up
jurisdictions. This is how it’s going to work.” In theory, it was a strong
document, but in application, it was weak. It was weak because there wasn’t a
collective resolve on the part of the board members. Back then, the board just
didn’t have the political wherewithal to muster the energy to make the tough
decisions to enforce that document, so the document quickly became stale. And
customers quickly started to realize it was a meaningless document – that the
unions had free license to bully them, extort them, overcharge them and then
the contractors started to come to town and blame labor and then up charge. It
was a vicious circle.”
So, in order to create a better environment at the
Convention Center, McNichol said the board had to have the “house in order”
before going to political divisions that “have influence over the whole
process” of reaching out to the unions.
For McNichol, two decisions needed to be made: Hiring a new
management company, SMG, and to “crop the staff down to a very core unit,” he
said.
The ideal plan was to
have all six unions sign on board:
“I want this on the record: Our goal was to have all six
unions that were in the building remain in this deal. For us, we can sell to
the industry six unions standing behind my board shoulder to shoulder talking
about a new day in Philadelphia, revised work rules, more exhibit rights,
better price and convenience and no hassle or drama on the show floor – that’s
what I wanted to sell. That was the goal.”
On the Carpenters
Local 8:
:It finally got to a point where one union – the Carpenters
– just wouldn’t buy the concept that, by making this building more competitive,
we would be able to go from 10 conventions a year to 30 conventions a year,
literally tripling the economic impact and revenue to our industry. We heard
from customers – they’re not coming back because of the labor hassles and labor
costs. All of the other five unions bought in. I literally had their agreement
three weeks before we signed this customer satisfaction agreement. It was done
and done, but we went through the continued exercise to try and bring the
Carpenters along. So if anyone hears stories that they were edged out, locked
out, not included – you might see the pick-up truck running around with the
bullhorn saying, “Shame on the Convention Center,” or flyers. I’m public enemy
No. 1. I’m the poster child for all that’s wrong with big business.”
What the new CSA came
down to, offering benefits:
- Defining the size of the booth where an exhibitor can do his or her own work. It was 300 feet, but we asked it to be 600 feet. It really means nothing in the way that this industry works in terms of labor work hours.
- A 7.2 battery operated screwdrivers
- Three-foot stepladders
“This sounds ridiculous and impossible that this could have
killed this deal. Let me make it even more implausible – I also offered, in
accommodation for all of that, to give [the unions] a three percent increase in
wages and benefits over the next 10 years. They still didn’t accept that deal.
Everybody else was salivating over it because they understood. And, we honestly
believe that we can make those margins. We know we can execute on that business
model, so we offered it up, and they said no.”
Won’t back down:
“[The Carpenters] laid down the gauntlet. They have a
decision to make and we have to force their hand. We cannot capitulate to the
Carpenters yet again because the industry will never come back to Philadelphia
if we cave on them now. That was the message I took back to the board. The
board agreed so then empowered me to teethen up the deal, which I did. I put
back in everything I thought we needed now to sell to the industry. Remember,
we were materially and economically damaged at that point because we now
suffered the second strike from a single union in less than a year on B.S.
issues - on issues that meant nothing to that community and could have meant
everything to our industry.”
The four unions that
signed by the 11:59 p.m., May 5 deadline:
“Four signed, so we had Riggers, Laborers, Electricians and
Stagehands. Those four unions are committed. I call them the Coalition of the
Willing. They signed that document, and it’s a courageous thing that they did
because it was about Philadelphia’s reputation of being a strong labor town. At
the end of the day, there has to be a line. When union leadership has to stand
up as they did in this case and recognize there’s an opportunity for them to
grow business for the region, for the city and for their members – that their
members stood to benefit significantly by the deal we were offering to them.”
The future:
“The culture has changed. When people walking into the
Convention Center, you’re going to have half a dozen people saying hello to
you. Why? Because we’re following your model – we are becoming
hospitality-driven and customer-focused. Don’t ask me why it wasn’t that way –
it wasn’t. But it is now, and it will continue to grow that way.”
McNichol ended his speech by saying that the Convention
Center now has conventions coming back to Philadelphia signing contracts for
2016 through 2018, including the American Industrial Hygiene Association.
Furthermore, McNichol said he’s currently about to “steal a piece of business
away from Boston and bring it to Philadelphia.”
Source: Philadelphia
Business Journal
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