Nov 17, 2009 6:00 pm US/Central
Chicago Loses 2nd Major Trade Show In A Week
Daley Says McCormick Place, Unions Must Reduce Trade Show Costs To Avoid Further Losses
CHICAGO (CBS) ―
It began with a trade show exhibitor complaining about the cost of soft drinks and it ended Tuesday with Chicago losing a $100 million trade show giant.
CBS 2 Chief Correspondent Jay Levine reports it was the second major trade show to pull out of Chicago in the last week alone.
It's called NPE 2012, the big national plastics show, which has been held here in Chicago since 1971. Not anymore. The Industry trade group announced Tuesday morning that it's moving to Orlando.
Chicago Federation of Labor President Dennis Gannon said, "Is is a wakeup call for all of us? Absolutely. Is it a loss? Absolutely. Is it the end of the day? No way."
He was responding to the announcement that International Plastics Showcase, held at McCormick Place earlier this year, was severing its nearly 40-year tie to Chicago.
Society of the Plastics Industry President and Chief Executive Officer Bill Carteaux said the decision boiled down to cost.
"At the end of the day, when I talked to the folks in Chicago, it really came down to one major issue… and that's the cost," he said. "What they haven't been able to do yet is address the cost of exhibiting in Chicago."
Saying good-bye to Chicago and hello to Orlando would result in $20 million in savings for the industry's members and exhibitors; a 48 percent reduction in electrical costs; 19 percent in hauling and rigging.
Mayor Richard M. Daley said the loss of the trade show to Orlando is a "very serious loss" to Chicago, Cook County and the state of Illinois.
"Trade shows have a huge effect on the airline industry, cabs and buses and limousines," the mayor said. "They have a huge effect upon all the hotels; they have a huge effect upon retail, the restaurants. They have a huge effect upon the state, and the city income, the county income; the three of them, from the sales tax."
For Daley, the bottom line is simple: jobs. The mayor said McCormick Place and its labor unions must work together to reduce the cost of running trade shows there.
"Everybody has to look carefully and realize that they won't be working; management and unions, it's as simple as that. They won't be working," Daley said.
Bills for workers at McCormick Place are far higher than those in Orlando, since McCormick Place workers are unionized, while workers at the Orlando's Orange County Convention Center are not.
"The lower costs, simpler work rules, and more flexible logistics at the Orange County Convention Center will cut costs dramatically as well as enable SPI to build a more dynamic show experience by attracting new participants and encouraging bigger and better exhibits," John Effmann, chairman of the 2012 International Plastics Exposition, said in a news release. "The improved conditions will lead to more extensive displays of new technology and larger and more numerous machines in full-scale operation."
Trade shows are a huge economic engine for Chicago. Losing two in two weeks is an estimated $150 million dollar hit to the area's economy.
The International Plastics Showcase has brought in 900,000 visitors and revenues of $1.1 billion in the nearly 40 years it has been held in Chicago, according to Jim Buonomo, chairman of the Society of the Plastics Industry Board.
However, Buonomo said, "There's no doubt that increasing cost pressures have limited our exhibitors to showcase their full inventory of machinery and new technology."
This is not the first convention that has been driven out of Chicago by high costs.
Healthcare Information and Management Systems decided last week that its first convention in Chicago this year would also be its last, after the cost of unionized McCormick Place electricians drove the bill from $40,000 to $240,000.
In that instance, McPier was ordering one particular union to put two or three electricians on a job that only required one, driving costs up.
Carteaux said would not place the blame specifically on electricians; the costs are high across the board.
"From our perspective, the utility piece and the electrical piece of it is only a piece of the puzzle," Carteaux said. "There are significant costs in other areas that need to be addressed."
At a news conference this afternoon, International Brotherhood of Electrical Workers union president Tim Foley tried to fire back.
"You're wrong. We do not stop people from plugging in cords. That's a myth that's been out there forever," Foley said. "It's not just the electricians. It's the cost of a contractor doing business."
One former exhibit manager says it's no myth.
"Even if it was just plugging in a cord of any sort, we were not allowed to do it," Barabara Yurisich said.
She was an exhibit manager at the Waste Expo, which left Chicago years ago, fed up with the work rules and charges.
Electric service for a 10-by-10 booth now costs $276 versus $116 in Orlando, according to the Plastics Expo people.
At a news conference reacting to the loss of the show, McPier CEO Juan Ochoa said, "We know we have to reinvent ourselves."
McPier disputed charges of price-gouging on food and beverage. Hey, they pointed out, a $7 supermarket case of Pepsi delivered to a booth cost only $136 here, compared to $168 in Orlando.
But what about something to keep that Pepsi cold?
"We rented a refrigerator for one week -- it was $804 dollars," exhibitor Steve DeSpain said.
The worst offender, according to trade show officials, is the McPier-owned electric contractor, though the house electricians claim they're not to blame.
"It makes me sick," one McPier electrician told Levine. "The work we do down there, the professionalism I see down there … to get our name dragged through the mud like this is sickening."
"It's not just the electricians," Foley said. "It's the cost of a contractor doing business."
Both management and labor vowed that starting Wednesday morning they'll come together to figure out a whole new way of doing business with an eye toward their customers.
"They're changing the way they do conventions. What we're saying here today is we're going to change the way we give them the ability to do it in our venues and make a difference," Gannon said.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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