Big construction projects help keep region working
By Karen Caffarini Post-Tribune correspondent September 1, 2012 7:16PM
Bryan Morse welds a valve while working at the NIPSCO R.H Schahfer generating station Friday Aug. 31, 2012. Morse, of DeMotte, is a member of the Pipefitters Local 597. | Andy Lavalley~Sun-Times Media
Updated: October 3, 2012 6:23AM
In Northwest Indiana this Labor Day, organized labor is spelling relief from the economic malaise still gripping much of the country in two letters: BP.
Union and region development officials say major investments by the steel mills and Northern Indiana Public Service Co. are generating tens of thousands of construction jobs, but it is primarily the multiyear, $3.8 billion modernization project underway at the BP Whiting refinery that is keeping union tradesmen and women working and insulating the region from high unemployment rates plaguing other areas of the state and country.
“None of us can overlook the value of BP’s decision to invest in the Whiting refinery. If it chose not to make the investment, it would be a different story in Northwest Indiana,” said David Fagan, financial secretary for Operating Engineers Local 150.
“If not for the steel mills and BP our unemployment rate would be much higher,” Fagan said.
By the numbers
Fagan said there are about 650 to 700 operating engineers working on the refinery’s modernization project, which will help the refinery increase its capability to process heavy Canadian crude oil.
Don Koliboski, economic development director for the Northwest Indiana Forum, said when the state of Indiana lowered the depreciation of personal property equipment for industries, thereby reducing taxes, it spurred BP, the steel mills, NIPSCO and others to make investments in their plants.
“Without the refinery and our industries, we would still be hurting,” Koliboski said.
He said Northwest Indiana has an unemployment rate of about 8.2 percent, while Northeast Indiana’s unemployment rate is more than double at 17 percent.
Koliboski said U.S. Steel’s work on its synthetic coke facility, a boiler project at ArcelorMittal, NIPSCO’s reinvestment in its R.H. Schahfer Generating Station in Wheatfield, and, mostly, BP’s modernization project have helped keep the region working.
Thousands of union carpenters, electricians, operating engineers, iron workers and other trades people are working at BP and more than 500 at NIPSCO’s Wheatfield plant, where NIPSCO is spending $800 million to make it compliant with U.S. Environmental Protection Agency guidelines, according to NIPSCO spokesman Nick Meyer.
Raymond Kasmark, business manager and financial secretary of the International Brotherhood of Electrical Workers Local 697 in Merrillville, said there are 2,000 IBEW members working in the local’s jurisdiction, including about 1,100 at the BP refinery, although the local has only 950 members. The remainder are from other locals.
“This tells me two things: One, the local economy is doing really good and two, the rest of the country is not doing that well,” Kasmark said.
He said industry has been the main driver of construction in the region. And, he said, health care is making a comeback after being slow for several years.
He said missing components are the commercial/retail sector, which usually follows housing construction and education. Kasmark blames the Indiana Legislature for causing the downturn in education construction when it determined that school districts could build new schools only if approved by referendum.
Linda Woloshansky, president and CEO of Center for Workforce Innovations, said there are still 35,000 people in the region looking for employment although she has not heard of any company planning major layoffs. And while industrial construction is going strong, she said those working in housing construction are still hurting.
“We’re doing very well compared to the rest of the country during this difficult period,” Woloshansky said.
What’s more, union and development officials say the bubble shouldn’t burst when BP’s massive project is done.
Kasmark said he believes the mills and other employers put some big projects on the back-burner while the BP project is under way due to a lack of manpower.
Koliboski said the Fronius company will add 500 jobs by 2016 after it moves into a spec building in Portage in 2016.
“We’ve had an increase in inquiries and are showing more properties, none of which I can talk about yet,” Koliboski said.
Meyer said NIPSCO is awaiting an order to begin similar work updating the environmental controls on its Michigan City generating station, although he said it won’t be as large a job as the one in Wheatfield. He also pointed out that NIPSCO has roughly 3,000 full-time employees, about 2,200 of whom are members of the United Steelworkers.
And Kasmark said BP won’t be out of the construction picture after its mega-project is complete.
“BP won’t just turn it on and walk away when the project is done. There is other work to do. Plus, it is building a new safety center for its police, fire and EMS services,” Kasmark said.