Chicago, St. Louis service rebate programs set precedent

Program kept doors open during recession, provides thousands of man-hours

CHICAGO and ST. LOUIS – Prior to the 2008 recession, Chicago-area sheet metal workers–like many others across the country–were experiencing a boom to the tune of 4.5 million man-hours worked. By 2008, Sheet Metal Workers Local No. 265 and Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) Greater Chicago saw a 2 million-hour drop. And by 2011, the local had lost 20 percent of its members, 20 percent of the general fund and several contractors.

Residential construction was 40 percent of the business in the area, and along with the housing market, new construction crashed.

To survive, contractors opened service departments and began providing maintenance and installations of air conditioners and furnaces, said Tony Adolfs, executive vice president of SMACNA Greater Chicago.

A rebate program helped give customers a deal while giving contractors much-needed work.

“The rebate program helped get them through that crisis,” Adolfs said. “It answered the question for customers, ‘What’s in it for me?’ The rebate is a tangible thing that can be advertised. Labor and management worked together to keep it strong.”

Members of Local No. 265 voted to contribute 60 cents per hour to fund the rebate program and the marketing to get the word out to customers.

As of January 2017, the Chicago-area rebate program gives customers $200 for every unit (up to four per household) and a $50 rebate for clean-and-checks, also known as annual maintenance checks. Since 2008, customers have received $4.5 million in rebates, which created 200,000 hours of work. A full-time sheet metal craftsperson will work 2,000 hours in a calendar year.

Rebates and man-hours are directly linked in St. Louis, as well. Between 2008 and 2011, Chicago wasn’t the only area realizing changes needed to be made in order to keep doors open and workers employed.

“The rebate program is something that helps stabilize the industry and give us growth potential to reach new customers,” said Ed Hoganson, marketing director for Sheet Metal Workers Local No. 36 in St. Louis. “I think the longevity of the rebate program was the glue that held everything together. There is an unmeasurable exponent to this: no one makes money from clean-and-checks. It’s the potential of follow-on work that is what you’re going for. We’re just lucky we have 25 residential contractors that have been at it a long time.”

The St. Louis-area rebate program currently offers customers $25 for signing an annual maintenance agreement. In 11 months of 2016, 17,000 service customers received $342,000 in rebates. With 25 residential contractors, union service work counts for 8 percent of the market share. Unlike other areas, St. Louis’ new homebuilders are 90 percent union. Contractors perform new installation and have instant potential to gain future warranty and service customers.

“It keeps service techs busy year-round. We don’t have the layoffs we might have without the rebate program,” Hoganson said. “Some contractors have 7,000 clean-and-checks a year. You can imagine what kind of man hours that creates.”

Marketing the rebate programs has been key to both cities’ success. Chicago created the www.iwantsmart.com website, and due to the website’s success, gained interest from union organizations both in and outside Chicago. Other chapters with existing rebate programs—including Rock Island, Illinois; Phoenix; Seattle; and Local No. 73, also in the Chicago area—joined the www.iwantsmart.com website to market their own programs, too.

“We have developed quite a program and a plan for implementation across the United States and Canada,” said John Daniel, financial secretary-treasurer and business representative for Local No. 265. “The campaign is a fully developed turnkey operation with a blend of branding and call-to-action techniques that can be easily implemented in any region. The brand is location neutral, which gives us the unique opportunity to leverage the size of our organizations.”

St. Louis developed www.smartstlouis.com website and targeted social media, radio, TV and advertising at St. Louis Blues hockey and St. Louis Cardinals baseball games.

Informing the public about the rebate program–and leaving the union conversation out–has made it easier, Daniel added.

“It’s not selling the union. It’s selling value, quality and trust,” he added. “We’re selling furnaces. We’re selling air conditioners. We’re selling anything that generates leads for our contractors and person-hours for our members.”

The future doesn’t depend on the rebate programs like those in Chicago and St. Louis, but they sure make the difference.

“When something breaks, customers call the contractor that’s been servicing their unit all these years, and that contractor—and [the] union workforce—gets that installation,” said Jack Goldkamp, executive vice president of SMACNA St. Louis. “It’s a strategy that is critical to our success.”

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The International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART) and the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) have a labor-management partnership that is more than 75 years old. The goal of these Partners in Progress is to maintain an effective cooperative effort that demonstrates expertise in the industrial and architectural sheet metal and heating, ventilation and air conditioning (HVAC) markets. For additional information, visit pinp.org.

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