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So Why Does the Union Care??

So Why Does the Union Care??

Canada NewsWire

OTTAWA, Feb. 7, 2018 /CNW/ -The Aecon Group (Aecon) is an iconic Canadian construction firm that works across the country and has completed some of its biggest and most complex projects. It employs thousands of our members, in virtually every construction discipline. It is also subject to a friendly takeover by a much larger Chinese construction firm, CCCC International Holding Limited (CCCI).

Ordinarily, any takeover, merger or even new joint venture partnership creates its own set of issues and worries. What will happen to big picture items, like book of business, market penetration, bargaining relationships and much smaller issues like will they replace the person we’ve done business with for 30 years? These are often emotive issues as well. We all fear change and we all suspect that change will be worse, lesser or somehow more ‘disturbing’ than the status quo we have come to rely upon. This business acquisition has attracted more than its fair share of notice.


Construction is a highly competitive business and there are not a huge number of firms with the financial, management, engineering and trades skills required to do most any project. Aecon is a company that has these capabilities; but its capacity has limits. You can only bid what you can bond – most owners of construction want security that their chosen contractor can keep the work going, and if they stumble that there is recourse to get the job finished. They also want to be certain that the contractor can pay its bills as they become due and avoid the owner’s project being the target of liens that can stop the owner’s own project cash flow. One of the ways that construction firms protect themselves from the inherent risks on mega-projects is to engage in joint venture arrangements. These split the risk and allow some firms to take on matters in which they are acknowledged as masters. Virtually all joint ventures have an off-shore/non-Canadian partner that has a role, often as the financial partner. The apocryphal stories about joint venture projects abound.

CCCI acquired an iconic Australian company, John Holland, in 2015. CCCI’s capital strength allowed John Holland to bid more, do more and put more Australian tradespeople to work. There, like here, a few people sniped from the sidelines about how “cheap Chinese steel and much else would ‘sneak in’”, but that didn’t happen. Other major Canadian construction companies seem to be reacting in the same way; the truth is that they are worried about the pressure that a much stronger Aecon can bring into the bidding process. That is certainly not an unreasonable fear, but it is a competitive fear not some sort of overt nationalist fear.

Business acquisitions happen all the time. In construction, the catalogue of firms that have been merged, bought outright for the book of business, or otherwise acquired is enormous. It is not a new thing. We don’t need to fear competition; it is what construction is about.

So, like the John Holland experience, a bigger, stronger Aecon that will continue to follow Canadian labour laws and safety standards is in the interests of the members of Canada’s Building Trades Unions. It will employ more people and give better value. Aecon will complement the other major Canadian companies (many of which are held, in whole or in part in other jurisdictions) and allow them room to bid projects as well. Aecon will remain a Canadian firm albeit with shareholders from away!

About CBTU
The North America-wide Building Trades coordinates activities and provides resources to 15 affiliated trade unions in the construction, maintenance and fabrication industries. In Canada, CBTU represents 500,000 skilled trades workers.

SOURCE Building & Construction Trades Department, AFL-CIO

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