tion of the business agent was legitimate in preserving work historically done within the jurisdiction of his local.

In a building air conditioning system, air is delivered from around a ceiling lighting fixture through a light troffer. In New York City, a union work rule requires that these light troffers be fabricated by members of the local Sheet Metal Workers International association. In most parts of the country they can be freely purchased from a manufacturer at approximately one-half the New York City cost.

A similar situation applies to fan coil units which are an integral part of a building air conditioning system. Outside of New York City these units can be purchased with the control assemblies including piping, control valves and hand valves, installed at the factory. A restriction imposed by the Plumbers and Pipe Fitters Union requires that the control assemblies be installed in a shop or on the jobsite by members of the Union's local at approximately twice the cost of the factory installed product.

Obviously in this climate cost-saving advances in technology are difficult if not impossible.

In recent years, Congress has recognized the necessity for developing and permitting the use of technological advances in the housing industry. The Demonstration Cities and Metropolitan Development Act of 1966 directed the Secretary of HUD to conduct research and studies and to otherwise encourage, promote, and assist the housing industry in utilizing advances in technology to "reduce the cost and improve the quality of housing."

Two years later, the Housing and Urban Development Act of 1968 directed the Secretary of HUD to undertake a program, since designated Operation Breakthrough, aimed at encouraging and testing new technologies in housing construction. Under this program 5 plans utilizing new housing technology are being tested by the production of at least 1,000 units each, a scale sufficiently large to enable a fair evaluation of cost savings.

Of most importance, Congress in late 1969 adopted an amendment to the Demonstration Cities and Metropolitan Development Act of 1966 directing the Secretary of HUD to:

"Assure, to the extent feasible, in connection with housing construction, any major rehabilitation and maintenance under programs assisted under this section that there is no restriction by contract, building codes, zoning ordinances, or practice against the employment of new or improved technologies, techniques, materials, methods or of preassembled products which may reduce the cost or improve the quality of such construction, rehabilitation, and maintenance, and therefore stimulate expanded production of housing under such programs, except where such restriction is necessary to insure safe and healthful working and living conditions."

Thus Congress has clearly recognized in legislation the need to utilize fully technological advances in housing. Unfortunately, however, Congress has not given enforcement power to support this legislative policy, and I respectfully suggest that this Subcommittee now has an opportunity, by adoption of S. 3373 to translate that policy into practice.

We fully support the Brock bill (S. 3373) for it recognizes that lower cost housing is far more important to the people of our country than is the encouragement of "make work" methods that benefit only highly paid construction crafts

men.

STATEMENT OF W. B. MARX, EXECUTIVE DIRECTOR, AMERICAN BOILER
MANUFACTURERS ASSOCIATION

The American Boiler Manufacturers Association, founded in 1888, is a national manufacturing trade association of 45 member companies who manufacture boilers, fuel burning equipment, controls, safety devices and related equipment for the public utility, industrial, commercial, marine and large residential markets. Industry shipments in 1971 totaled over $900 million, which included some 7.000 boiler units of which all but 200, or more than 95%. were of the "packaged" or "factory-assembled" type. ABMA believes its members were among the first American manufacturers to build this type product, the earliest shop-assembled units dating back to 1931.

Approximately one-third of these boiler units are used in large heating installations, many in housing projects of all types and sizes. All but one of the manufacturers can be considered small business by the generally accepted Small Business Administration criterion of less than 500 employees. Many of these manufacturers build the "factory-assembled" product exclusively, and, therefore, are especially vulnerable to concerted building trades unions' refusal to install. In this connection it should be pointed out that all but one of our 60 some plants are represented by one of the industrial unions.

Thus it can be seen that the Association has a strong interest in the housing market, especially in the case of its smaller member companies. These companies must continue to market "packaged" boilers since factory assembly means a safer, higher quality product at a lower cost. Yielding to union restrictions will result in increased field and total costs and a deteriorating competitive position, in that it exposes these companies to competition from electric heat, promoted by the public utilities. If allowed to continue, this situation would lead not only to higher operating costs for the building owner but could mean financial ruin for some of the manufacturers.

We believe that total cost can be best controlled by maximizing the proportion of work done in the factory, where labor costs have risen much more slowly than in the field. Thus, it is to the advantage of government, private builders and the consumer to afford the manufacturer protection against union harassment of a secondary nature at the construction site. This rationale applies regardless of the present period of economic controls or developments which follow this phase.

Packaged boilers are completely assembled and tested in the factory before shipment to the job site. Thus the manufacturer is able to comprehensively warrant the product, accepting technical responsibility and product liability. More important, however, are considerations of public safety. Being an "inherently dangerous" product, boiler units are inspected by independent agencies, both at the plant and in the field, and by state authorities upon installation. Furthermore, the complete unit is protected by a responsible insuror. Requiring a manufacturer of factory-assembled boilers to relinquish some of his work means a division of responsibility in the highly critical areas of warranty, product liability, inspection, insurance and safety. It is difficult to see how the public interest will be enhanced with this all-important area of responsibility fragmented. ABMA is painfully aware of union refusal to install prefabricated or factoryassembled products. Over the past ten years we have experienced more than twenty such incidents involving the installation of packaged boiler units in schools, hospitals, universities and industrial plants. Four of these union refusals were fought by the Association through the National Labor Relations Board and the federal courts up to the Supreme Court. This involved seven years of expensive litigation. The outcome of these cases has convinced us that legislation is necessary to stop this form of union harassment and thus protect the manufacturer, contractor, owner and consumer.*

In addition to these cases of union harassment, and several others which occurred during this period, the following incidents involving the Pipefitters have been reported to the Association since 1967:

In the St. Paul-Minneapolis area locals of the pipefitters, whose members both install packaged boilers and field-assembled boilers, decided in 1959 to put a stop to the use of the packaged product. After two unsuccessful attempts in 1959 and 1961, they convinced local contractors in 1963 to incorporate so-called "work fabrication" clauses in the labor agreements between the unions and the Minneapolis and St. Paul Contractors Association. These clauses, in effect, provide that the contractors will not purchase or install packaged boilers.

When certain contractors did not comply with the fabrication clauses-because packaged boilers had been specified by the architect or purchased by the owner-the union applied coercive pressures to enforce the clauses. Illustrative was an incident involving the Minnesota Mining and Manufacturing Company. When 3-M purchased packaged boilers for installation in a remodeled building and hired a local contractor to do the work, Local #455 threatened a complete shut-down of the job. 3-M was finally forced to capitulate; the boilers were disassembled at the factory and reassembled on the job at a total added cost to 3-M of more than $9,000.

On the basis of this and similar cases Abmain 1963 filed unfair labor practice charges with the NLRB. These cases went through the board and the 8th Circuit Court of Appeals. ABMA filed for certiorari to the Supreme Court in September 1969; in June 1970 the Court denied our petition.

INCIDENTS OF DISAGREEMENT BETWEEN AMERICAN BOILER MANUFACTURERS ASSOCIATION AND PIPEFITTERS UNION

The urgent need for increased productivity, particularly in light of the mounting pressures of international competition, has been stressed by many national leaders including President Nixon. Nowhere is the urgency of this need more critical than in the construction field. Thus, as buyers and sellers of construction, and as manufacturers of a wide range of industrial products, we strongly endorse the national thrust for increased productivity as the vital economic factor of our time. This underlines the concept of factory assembly, where the manufacturer can achieve the economies of size, enhanced quality control, safer fabrication, and shorter delivery times.

These economies carry over into the electric power generation field, where the boiler manufacturer is better able to meet our urgent power requirements by shipping larger components, to be field-assembled more quickly. They also encourage new product development and other technological advances.

There is no area of construction in which the lowest capital and operating cost serve the public interest more directly than in the housing field. Prefabricated and factory-assembled products must be encouraged to the utmost if our national housing objectives are to be met. This legislation must prohibit restrictions on the use of manufactured products and provide for suitable remedies, to be invoked by the persons aggrieved, so that quick and effective relief may be obtained.

It is for this reason we support the principles contined in the Brock bill. (S. 3373)

STATEMENT OF DAVID V. KORNREICH, ON BEHALF OF FLORIDA EAST COAST SHEET METAL CONTRACTORS ASSOCIATION AND THE ASSOCIATED GENERAL CONTRACTORSSOUTH FLORIDA CHAPTER

I am David V. Kornreich, a member of the Miami, Florida law firm of Muller & Mintz, which represents the Florida East Coast Sheet Metal Contractors Association (FECSMCA) and the Associated General Contractors-South Florida Chapter (AGC) in labor-management relations matters.

The FECSMCA is a trade association representing twenty-six (26) construction contractors engaged in the fabrication and installation of residential, commercial, institutional, and industrial warm-air heating, cooling, ventilating and air handling systems; architectural sheet metal and roofing; industrial sheet metal; air pollution control and specialty fabrication. All of the members of the FECSMCA have labor agreements with Local Union No. 223, Sheet Metal Workers International Association and various other building trades unions affiliated with the AFL-CIO.

The AGC-South Florida Chapter is a trade association representing more than sixty (60) construction firms primarily engaged in the residential, commercial, and institutional general contracting business. Most, if not all, of the work performed by the members of the AGC is done under labor agreements between AGC and the various building trades unions and/or labor agreements between the specialty subcontractors employed by the individual AGC members (e.g., the sheet metal contractors) and a particular building trades union (e.g., Sheet Metal Workers Union).

The members of both FECSMCA and AGC perform most of their construction work in South Florida, one of the nation's largest and fastest growing residential, commercial, and institutional construction markets. Many of these firms have been and are currently engaged in single family, townhouse, garden-type, and high-rise residential construction under programs administered by the U.S. Department of Housing and Urban Development as well as construction of airport, medical, educational, and other facilities involving programs administered by other federal agencies.

On behalf of FECSMCA and AGC, we would like to take this opportunity to present our comments in support of S. 3373-a bill to promote the utilization of improved technology and federally assisted housing projects and to increase productivity in order to meet our national housing goals, and for other purposes. Based on their vast experience in the heavily unionized South Florida construction industry, the members of the Associations feel that there is a critical need for legislation to curtail the extremely prevalent restrictive work rules and practices adopted and enforced by various building trades unions in our area. Time and time again, contractors have bid and undertaken large projects, including federally assisted residential housing, only to find that the building trades unions have imposed so many restrictions on purchase of prefabricated products and utilization of labor-saving methods that the project simply could not be delivered at the contract price, or, for that matter, any reasonable price. In those circumstances, the contractor, if he is to continue on the job and comply with the job schedule, must himself absorb the cost of complying with the unions' demands or pass such costs on to the developer. Even if the contractor adopts the former course of action, you can be sure that the next time he bids a similar job, he will make certain that he projects his costs to take into account both the previously experienced restrictive work practices and any other similar problems, which may cause him financial problems and/or delay the job. Needless to say, the contractor's bitter experience results in higher costs to the government, the taxpayers, and the ultimate consumer (e.g., homeowner or apartment renter) on the next federally assisted project.

We have all heard and read of the building trades unions claims that restrictive work practices and restraints on use of improved and less costly products and materials are nonexistent. We have also heard the building trades unions argue that even if such practices and restraints do exist, they occur only infrequently and are more than offset by their members increased productivity.

For proof that the aforementioned restrictive work practices and restraints are widespread-even commonplace-rather than infrequent, we have only to look at one segment of the South Florida construction industry-the sheet metal trade. In this regard, the members of FECSMCA and various other sheet metal contractors signatory to the standard labor agreement with Sheet Metal Workers Union Local No. 223 are on almost a daily basis subject to union restraints on the use of materials and products, which would substantially lower construction costs. These restraints take the form of work stoppages, slowdowns, grievances, fines, and threats against any contractor purchasing or utilizing a product of which the Union does not approve. On occasion, after delivery to the job site, a particular product not approved by the Union will "mysteriously" be damaged beyond repair.

Although the acts are too numerous to mention, we should like the distinguished Subcommittee to be aware of the following problems, which are representative of those experienced on a regular basis:

1. On a three hundred unit federally assisted high-rise project in Miami, the mechanical contractor, acting pursuant to the engineer's instructions and in accordance with the federally approved specifications, purchased some ninety (90) exhaust fans for installation in bathrooms, which did not have outside windows. (Local code required that such fans be installed in each bathroom where there was no outside window.) The exhaust fans, which were manufactured by a nationally recognized company, came equipped with two wall capsone connecting to the fan unit itself and the other to be installed in the exterior wall of the building to permit exhaust to the outside.

In accordance with normal union craft practice, the mechanical contractor assigned the installation of the exhaust fans and the companion wall caps to his sheet metal subcontractor. Thereafter, the representatives of the Sheet Metal Workers Local Union refused to permit their members to install the fans and the wall caps. According to the Union, the fans could not be installed because they were not union made. With respect to the wall caps, the Union ccntended

that even if the wall caps were union made in a production plant, they would still not be acceptable inasmuch as they would have to be fabricated by the sheet metal contractor's own workers, who earned construction wages. As a result of the Union's action in refusing to permit the installation of these purchased items, the carpenters, plasterers, and other crafts were unable to coordi nate their activities with the Sheet Metal Workers and, as a result, they completed their work on the bathrooms and the exterior wall of the building without making any provision for the accommodation of the wall caps.

In order to get the job completed, the mechanical contractor was forced to incur the additional cost of bringing in a crew of employees, who would not otherwise have been present on the job, to install the fans. The wall caps, which had been purchased at $2.00 per unit, had to be replaced by wall caps fabricated by the sheet metal contractor's employees. These replacement caps cost the sheet metal contractor $7.00 per unit. Inasmuch as the bathroom had been completed without provision for the installation of the wall caps, the sheet metal contractor was compelled to utilize the very same Sheet Metal Workers, who were involved in the refusal to install the purchased wall fans, to drill the necessary outlet holes in the exterior wall, resurface and repaint the exterior wall, and clean up the resulting debris. Although the purchase and installation of the original fans and wall caps would have cost less than $3,000.00, those costs were tripled as a result of the Union's action. Further, while the Sheet Metal Workers profited from their wrongs, the completion and occupancy of the building was delayed. 2. Another problem, which has occurred on both federally assisted residential and institutional projects, involves the purchase of fire dampers for installation in duct work. For safety reasons, building codes, federal regulations, and engineers' specifications often require that fire dampers on federally assisted highrise and hospital projects adhere to certain rigid fabrication standards and suecessfully pass "fire tests" conducted by nationally recognized testing agencies (e.g., Underwriters' Laboratories). Traditionally, fire dampers, when specified. were purchased by the sheet metal contractor from a manufacturer who had the equipment necessary to mass produce a relatively low-cost fire damper complying with both local and federal standards. The Sheet Metal Workers Local Union in South Florida, however, decided that such practice was unacceptable, although, somewhat ironically, most of the manufacturers of the purchased fire dampers had labor agreements with sister local unions affiliated with the Sheet Metal Workers International Association (i.e., so-called "blue label" shops). According to the Sheet Metal Workers Union in South Florida, its members will be permitted to install only fire dampers fabricated by the local contractors at local construction Sheet Metal Worker wage rates, which presently are $10.00 per hour. (These rates are at least 100% higher than those paid by fire damper manufacturers to their employees represented by affiliates of the same International Union.)

Some contractors, who insist on utilizing the purchased fire dampers, claim that the Union members are installing them "very slowly". Other contractors have been served with formal grievances wherein the Union claims lost wages and benefits as a result of purchase of fire dampers. In one recent case, a local contractor, realizing full well that some form of harassment was forthcoming if he purchased fire dampers from manufacturers, decided to fabricate these items in his own shop at local construction Sheet Metal wages. According to this contractor, the net result of this decision was an increase of 25 to 33% in fire damper costs-an increased cost, which he appropriately reflected in his bid on the project. Significantly, the aforementioned increased costs do not reflect the fact that this contractor (as well as other local contractors) have had to spend thousands of dollars to purchase machinery to fabricate fire dampers and other items in order to comply with the Union's demands.

Another contractor was confronted with a similar fire damper problem on a high-rise project and was advised by the Union that the Union members would install the fire dampers, if they each received an extra $10.00. Not having the necessary equipment to fabricate fire dampers himself and being unwilling to comply with the Union's outrageous demands, this contractor began shopping around for another local contractor with the equipment necessary to fabricate the necessary fire dampers (at construction wage rates). Much to his dismay. the harried contractor learned that it would cost him almost double the purchase price to buy the fire dampers from a local shop paying construction rates (i... a so-called "yellow label" shop). Thus, each of the Sheet Metal Workers received a $10.00 "bonus" for installing the previously purchased fire dampers. 3. Grills were normally purchased by sheet metal contractors from a local