Not So Strange Bedfellows: Trade Unions, Private Equity Group, Form New Partnership

September 8, 2020 by Dan McCue
John F. Kennedy International Airport, Terminal 1. (Courtesy of the Port Authority of New York and New Jersey)

WASHINGTON – It was the kind of announcement that makes one stop and wonder if they’d heard it right.

While unions have profitably invested in private equity firms as part of their portfolio for years, the general belief about the two is that in every other way their relationship should be adversarial.

In the case of the announcement referenced above, however, the seemingly remarkable proved true.

North America’s Building Trades Unions and the American Investment Council actually had formed a partnership aimed at moving large-scale infrastructure projects to completion while leaving good-paying, skilled jobs in their wake.

“That’s a fair response,” said Sean McGarvey, president of the North American Building Trade Unions, when he was told of the initial disbelief the announcement inspired.

“But this belief in our having to have an adversarial relationship with the equity community was never shared by the trade union,” he said. “That’s not our first response to anything. Our first response can almost always be phrased as a question — how do we work together for our mutual benefit?”

In forming their new labor-management committee, both NABTU and AIC, each an umbrella organization for scores of other organizations, recognized the importance of a strong relationship not just in advancing their legislative hopes or in dealing with regulatory issues, but also in effecting change, “where shovels meet dirt,” McGarvey said.

They will also work to present an even more unified front on public policy decisions affecting retirement security, job growth and access to capital.

“Being partners this way is a logical next step for us both,” the union man said. “In many cases, we’ve long been working along parallel paths to achieve the same ends.

“Working together, we are not only ensuring good sound returns for our pensioners, but we’re creating good jobs, middle-class sustaining jobs, and providing the skilled workforce to build the projects private equity firms seek to invest in,” he added.

To illustrate the kind of projects they want to work together on in the future, both McGarvey and Drew Maloney, president and CEO of The American Investment Council pointed to the upcoming redevelopment of Terminal 1 at New York’s John F. Kennedy International Airport, the cornerstone of a sweeping $13 billion renovation that will revitalize one of the busiest airports in the United States and increase its capacity by at least 15 million passengers per year.

“It’s the perfect example of a private equity-union partnership,” McGarvey said. “This project will create ladders of opportunity, along with 5,000 union construction jobs and 2,000 airport operation jobs going forward. We want to see similar partnerships across the country, and that is what our partnership is all about.” 

Already approved by the Port Authority of New York and New Jersey Board of Commissioners, the new Terminal 1 will be located on the south side of the airport, directly across from the existing terminals 1 and 2, with a parking area built on the old Terminal 3.

The project is slated to open in stages beginning in 2025, with the Port Authority entering into leases with several airlines while the development partners — the Carlyle Group, JLC Infrastructure, and Union Labor Life Insurance Company, collaborate on design, construction, financing and operation for the new terminal.

“There are still a number of regulatory steps that need to be taken before the project truly gets underway, but it’s an example of what can be when a forward looking entity — in this case the Carlyle Group — partners with those with the skills to bring their vision to fruition.

“And of course, it’s always impressive to regulators when labor and management are perceived as working shoulder to shoulder on a project of this scale,” he said, adding, “It’s just a win-win-win for everybody down the line, and the spillover effects are good for the country.”

Currently, there are more than 5,000 U.S. private equity firms with investments in approximately 35,000 American businesses that employ 8.8 million people. From 2013-2018, U.S. private equity firms invested $3.4 trillion into American companies.

AIC’s Drew Maloney said the partnership will surely inspire others to follow suit.

“Regardless of the outcome of the election, the nation’s infrastructure needs are growing, and I think in the next four years we’re going to see a significant infrastructure package move through Congress,” he said.

“The thing is, we’re just not going to be able to address all of the nation’s infrastructure needs using just taxpayer dollars. If anything, that’s going to inspire a lot more of these kinds of partnerships to come together, replicating a lot of the projects we’re already working on.”

“Working together always creates better synergies and a greater ability to address concerns going forward,” Maloney continued. “I think there’s a huge opportunity not only to create more jobs and well-paying jobs, also to create greater investment opportunities for retirees and pension holders across the country.”

“It’s pretty much the sky’s the limit as far as the opportunities that are out there,” McGarvey said. “And it’s borne of frustration with the federal government to make a predictable, long-term, large investment of federal dollars in the infrastructure the country desperately needs.”

“Now, we have seen fits and starts on infrastructure from this administration and the last — and the last couple of Congresses — but it’s been nowhere what we needed, especially with China nipping at our heels,” he continued.

“If we want to maintain our place as the economic superpower in the world, we’re going to have to get moving,” McGarvey said. “After this election, whomever wins, the administration and Congress better get on the stick, or we will be left behind.

“What we’ve experienced in recent years is like that old saw about how Congress works — that nothing gets done until there’s a national emergency,” he said. “Well we’re in a national emergency right now when it comes to this country’s infrastructure and we have got to take decisive steps to maintain our place in the world economy.”

Infrastructure

Not So Strange Bedfellows: Trade Unions, Private Equity Group, Form New Partnership
Infrastructure
Not So Strange Bedfellows: Trade Unions, Private Equity Group, Form New Partnership
September 8, 2020
by Dan McCue

WASHINGTON - It was the kind of announcement that makes one stop and wonder if they'd heard it right. While unions have profitably invested in private equity firms as part of their portfolio for years, the general belief about the two is that in every other... Read More

Critical Deadlines Loom for Highways, Airlines and Transit
Infrastructure
Critical Deadlines Loom for Highways, Airlines and Transit

WASHINGTON — With just weeks left in the legislative year, Congress faces two big transportation deadlines on Sept. 30, a transportation to-do list and potentially dire consequences if it does not act. Without congressional involvement, airlines have signaled they will lay off thousands of workers this... Read More

Policymakers Discuss Planning for the Future of Transportation
Infrastructure
Policymakers Discuss Planning for the Future of Transportation
August 24, 2020
by Kate Michael

WASHINGTON — News website Axios convened a panel of local and national policymakers to discuss the future of transportation in the wake of COVID-19 including how decision-makers are retooling public transit to be safe and sustainable. “When I think about the top five issues the country... Read More

Advocates Rally to Tear Down Highways That Bulldozed Black Neighborhoods
Infrastructure
Advocates Rally to Tear Down Highways That Bulldozed Black Neighborhoods

WASHINGTON — As protesters in cities from Richmond, Virginia, to San Francisco toppled statues last month, urban planner Amy Stelly allowed herself to hope that New Orleans might soon fell its own worst “racist monument.” For much of her life, Stelly, who is Black, has lived... Read More

Trump Loosens Environmental Rules to Fast-Track Infrastructure Permits
Infrastructure
Trump Loosens Environmental Rules to Fast-Track Infrastructure Permits
July 15, 2020
by Jacob Pederson

President Donald Trump announced he is loosening the National Environmental Policy Act in a bid to speed up permitting of federal infrastructure projects ranging from highway upgrades to the construction of oil and natural gas pipelines. The president announced the final changes to the rule at... Read More

Biden Pledges New Deal-Like Economic Agenda to Counter Trump
2020 Elections
Biden Pledges New Deal-Like Economic Agenda to Counter Trump

DUNMORE, Pa. (AP) — Democrat Joe Biden turned his campaign against President Donald Trump toward the economy Thursday, introducing a New Deal-like economic agenda while drawing a sharp contrast with a billionaire incumbent he said has abandoned working-class Americans amid cascading crises. The former vice president presented details... Read More

News From The Well
scroll top