Bloomfield Hills, MNLast week workers gathered outside the headquarters of a homebuilder in Bloomfield Hills, Michigan, to protest the shoddy workmanship and unfair wages paid by Pulte Homes and other builders.
Pulte says the allegations are unfounded.
The housing bubble bust has proved tough on homebuyers, but it appears to have hit the homebuilding industry just as hard. Pulte reported losses of $1.47 billion last year, according to the December 16 edition of the Detroit News. Those losses were factored against revenue of $6.28 billion in 2008. In comparison, Pulte brought in $14.69 billion at the height of the building boom in 2005.
Average selling prices for Pulte Homes, which has 8.7 percent of the Michigan market but less than half of one percent nationally, have dropped to $284,000 in 2008, compared to $337,000 in 2006.
Whether or not economic forces are related to the allegations made against the firm by the Laborers' International Union of North America (LiUNA) is not clear. However, the union has included Pulte Homes, together DR Horton, KB Homes and Lenmar in a national protest alleging unfair wages, exploitive mortgage teams, substandard construction and regressive working conditions.
"The working conditions are back to the 1920s and 1930s," said one of the protesters, Paul Gassel, a financial officer for the local union branch in Pontiac. Workers say they are forced by third-party contractors to work more than 40 hours a week without overtime pay and work so quickly that their construction has defects.
The protest was part of a 10-city tour on the part of the union, taking homebuilders to task for their roles in the collapse of the US housing market.
New home construction is only a small percentage of the housing industry and Pulte lacks the "monopoly power" to be held responsible for the US housing collapse, according to Don Grimes, a senior researcher at University of Michigan's Institute of Labor and Industrial Relations.
"They're not going to dominate the market in terms of setting mortgage practices," Grimes said. "It would be really hard to imply a conspiracy."
A spokesperson for Pulte suggested the LiUNA protest was little more than a publicity stunt. The company, founded by the then-18-year-old Bill Pulte in Detroit in 1950, has grown to become a respected homebuilder with communities in 59 markets, 29 states and the District of Columbia. Pulte delivered its 500,000th home in 2007.
According to Michigan Department of Labor, jobs in construction and building in the state fell 16.2 percent between October 2008 and 2009, while jobs in specialty trade contracting fell 17.6 percent.