It’s a year and half since John Gates, the chairman of Chicago’s Metropolitan Pier and Exposition Authority (MPEA), blew the row over Chicago’s unions into a storm. The dispute, prompted by his proposals to consolidate the unions and turn their workers into public employees under convention centre control, was hoped to lower costs and rejuvenate Chicago’s flagging exhibition industry.
The epicenter of the dispute, the MPEA’s giant McCormick Place exhibition centre, was creaking under the pressure of the economic crisis and in dire need of reform. The changes, while radical, were crucial for getting Chicago’s trade show business back on track.
“Convention business in Chicago is at a crossroads,” said Gates. “The many stakeholders in Chicago’s vital convention industry must do what it takes to stay competitive and provide better value to customers.”
And so began an almighty tug-of war between the unions and the MPEA. First the reform bill, backed by Chicago’s mayor Richard Daley, was passed by the Illinois senate. Then Illinois governor Pat Quinn vetoed the bill citing concerns over its constitutionality. His veto was overturned by the Illinois State Legislature and the bill passed into law, with a so-called trailer bill carrying some of the changes sought by Quinn.
Organisers cheered the Legislature. Key shows such as HIMSS, which attracts 30,000 international attendees, recommitted to McCormick Place having left for Vegas in 2010 blaming electrical costs. The National Restaurant Association and manufacturing show IMTS signed on until 2016.
But their joy was shortlived. US District Court Judge Ronald Guzman crushed the reforms under the National Labor Relations Act, which prevents state governments from creating laws that interfere with the collective bargaining process. The MPEA replied by requesting Guzman ‘stay the effectiveness’ of the ruling while an appeal took place, in hope that the efficacy of the reforms would become apparent. That request, and the appeal, were denied.
Organisers voted with their feet. The Chicago-based International Carwash Association aborted the move of Car Care World Expo to McCormick Place, with chief executive Eric Wulf saying:
“Until the work rules are on par with Las Vegas, it’s a no-go for us.”
Stalemate
So where does this deadlock leave Chicago today? The publicity that accompanied the tug of war between MPEA and the unions has left the city in a tight spot. The media championed the reforms and vilified the unions, who responded to the negative publicity by campaigning through mainstream media channels. ‘The bulk of prices charged to exhibitors is the result of profit-chasing price-hikes, rather than high contractor rates’, they claimed. But as organisers and exhibitors know, the unions in the US have been a potent disincentive for years.
In a white paper released at the end of July, president and CEO of the Centre for Exhibition Industry Research (CEIR) Doug Ducate addresses what he calls unfounded criticisms of the US expo industry’s business model.
The report, Are We a Troubled Industry?, made without CEIR’s official backing, suggests the way Chicago works is in line with three principles that apply to most industries: Preferred customers get preferred treatment; there is a cost incurred for entry to a market, and price is determined by supply, demand and competition.
That last one is the most interesting. Having seen the efforts of the MPEA and the exodus of events to Vegas, in Chicago the unions have a fair impact on pricing too. And international organisers know it.
While the unions may appear to have won their case, it has come at great expense to the institution they serve.
Any comments? Email arc@mashmedia.net
