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Does unionisation force away bizness?


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#1 Robert Hughes

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Posted 28 May 2005 - 03:08 PM

A few years ago Minnesota seemed to be on the verge of gaining significant feature film business. But the climate has soured in the past few years. Some of my coworkers have theorised that big feature productions stopped coming after the crews started unionising, taking away some of the cost incentive for productions to leave Hollywood and come here. Of course, the state gov't also took away some tax incentives for film productions, and that didn't help either (and may have been the more significant factor).

How much does local union participation affect the ability to land productions in your area?
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#2 Richard Boddington

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Posted 29 May 2005 - 04:16 PM

This would be a tough one to answer. There are lots of union folk here who I'm sure won't appreciate the suggestion that unions do contribute to work moving to non-union areas.

"IF" that where the case.

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#3 David Mullen ASC

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Posted 29 May 2005 - 06:40 PM

It also depends on the union -- not all are alike in their demands or tactics, etc. In a motion picture production there can be SAG, DGA, IATSE, and the Teamsters, maybe more. One of the reasons for some production moving to Canada has little to do with camera unions -- the same work is unionized in Canada at only slightly lower rates -- but more to do with residual payments owed SAG actors (and of course, the tax breaks.)

Union activity may be one cause for some non-signatory productions to avoid an area, but it is usually not the major cause. If production slowed in Minnesota, a more likely reason is the tax breaks in nearby Canada than the union workers living in Minnesota. Same problem with other states to the north like Montana or Washington. Canada is too tempting when it's that close. I talked to someone who found locations in Montana for "Legends of the Fall", only to see the production then find identical landscapes right across the border in Alberta and move there.

I just taked to a producer doing a medium-budget studio picture that just relocated to Vancouver and he said the reason was that the tax breaks added up to 7 million dollars and it was too much to ignore. Nothing to do with unions in Los Angeles where the film was originally going to be shot.

There are cases of reality shows that are non-union trying to avoid areas with heavy union activity. Last year there was a fracas in Philadelphia when MTV's "The Real World" refused to use union art department workers to renovate the house being used, and Philly has traditionally been very strongly unionized. But the producers of "The Real World" are also adamantly against going union for cost reasons and they didn't want to set a precedent in Philly by hiring union contruction people, etc. So after the house was finished, the local unions threatened to picket the house every day of production, so MTV threatened to cancel the Philadelphia location, etc. I don't know what happened but I think the mayor worked out some deal between the producers and the local unions.

Los Angeles, though heavily unionized, also has a very large non-union film industry too. The conflicts are less strong when there's enough production to go around. It gets a lot harder in other cities where production has dropped. On the other hand, the unions in those areas tend to cut fairly generous deals just to keep production from leaving. The East Coast Council deal that many low-budget union films operate under on that side of the country is not particularly expensive for producer, nor are the rates that good for the crew. But at least it allows union workers to work on projects that contribute to their health and pension plans.

More than salaries, the health and pension plan is becoming the primary reason people want to join unions rather than work freelance on non-union stuff. It's the closest thing to having a steady job with health benefits that full-time employees of companies usually enjoy (although they may be losing those benefits over time...)
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#4 Richard Boddington

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Posted 29 May 2005 - 07:17 PM

As David points out there are many Hollywood shoots being done in Canada. I would have to agree that the unionization in LA is most likely not the main reason movies move to Canada.

The exchange rate from US to Canadian funds, and the tax breaks offered by the provincial governments, are I'm sure a much bigger factor. Because as David points out the unions are active in Canada and US producers will have to "deal" with unions one way or the other.

The exchange rate factor can not be underestimated, right now 1 USD buys about $1.25 CDN. So a 10 million dollar USD budget becomes 12.5 million CDN. 18 months ago the exchange rate was $1.50 CDN to the US dollar. But the recent sharp decline in the value of the US dollar has driven up the value of the CDN dollar.

If the Canadian dollar was to sit in the .90 USD range so that the USD was only worth about $1.14 CDN, there would be an immediate and sharp drop off in Hollywood production moved to Canada. It's happened before.

Of course Canada also offers the same equipment rental opportunities, huge studios in both Vancouver and Toronto, and ultra modern post facilities.

And of course there are those in Canada who believe that all the Hollywood work that comes here has actually succeeded in killing any domestic film industry that might have developed in Canada. Canada is essentially a service provider country, we don't actually make our own films. Not ones that the general public has any interest in that is.

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#5 David Mullen ASC

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Posted 29 May 2005 - 08:01 PM

I remember back in the 80's when some Hollywood production started moving to Mexico, films like "Dune", "Total Recall" and "Honey I Shrunk the Kids", again due to tax breaks I believe. Some producer told me back then that Hollywood would never stay for long in Mexico for one reason: the language barrier. This is one reason why I think the move to cheaper non-English language countries like Romania, Bulgaria, etc. is cyclical, whereas Canada and now Australia and New Zealand may prove a more permanent alternative to filming in the U.S., with Canada having the advantage of being closer. But as Mike Most just pointed out in a CML post, Canada has lost some business partially because there are cheaper places to shoot now, with better tax breaks.

As for unions chasing out business, obviously there are limits to that because the unions want to find work for its members and tend to ultimately cut deals with producers to make it happen. But there are always occasional stories of unions treating productions badly (often told as a way of putting down unionization); I seem to recall some report on NPR about some Canadian city (Toronto?) where the Teamsters (do they have them in Canada?) were particularly hard to deal with, making some producers consider alternative cities.
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#6 Richard Boddington

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Posted 29 May 2005 - 08:43 PM

"But as Mike Most just pointed out in a CML post, Canada has lost some business partially because there are cheaper places to shoot now, with better tax breaks."

Yep! 100% correct.

This is why I have no sympathy for folks down in Toronto who are reliant on Hollywood/USA productions for their livelyhood.

Relying on a foreign industry to bring you work just isn't good business sense. It should be the gravy not the main course. If it comes great, if not, you can still eat without it.

R,
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#7 J. Lamar King

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Posted 01 June 2005 - 02:22 PM

Tax breaks or lack thereof are very powerful motives for where a production shoots. Texas has lost lots of productions to Louisiana the past few years because they undercut Texas' deal. Now the Texas legislature is debating undercutting Louisiana's deal.
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#8 Tim J Durham

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Posted 01 June 2005 - 02:58 PM

Tax breaks or lack thereof are very powerful motives for where a production shoots.  Texas has lost lots of productions to Louisiana the past few years because they undercut Texas' deal.  Now the Texas legislature is debating undercutting Louisiana's deal.

<{POST_SNAPBACK}>


And now Governor Terminator is considering cutting tax breaks in an attempt to keep production from leaving the state:

http://www.arnoldwat...les_000630.php3

http://tinyurl.com/cm589

Is it pandering (trying to get film moguls to vote repub) or does it have any meat to it? Stay tuned...
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#9 Adam Frisch FSF

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Posted 01 June 2005 - 08:07 PM

London seems busy still when it comes to Hollywood features - Pinewood, Shepperton, Elstree and Leavesden always have a couple of fairly big gigs going. Which is a mystery really, considering the very unfavourable exchange rate between the $ and the £. Maybe they're willing to pay for the good craftmanship and for being in a major capital?
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#10 Nate Downes

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Posted 01 June 2005 - 11:49 PM

Some complain about unions, but from my perspective, unions are a very handy tool for productions: they provide a trained talent pool to draw from, saving a lot of negotiations and hassle later in production. Someone stops working, call up their union and get them on their butt. It's a safety net on all sides. In Minn's case, the taxes were the primary culpret, unions actually helped keep productions there for longer in my viewpoint.
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#11 Bob Hayes

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Posted 02 June 2005 - 12:13 AM

One of the major reasons work goes to Canada is producers don?t have to pay for Health and Welfare or Pensions in Canada. So the question might be. Is the lack of universal health care forcing producers to leave the US? Anti labor people will be forever blaming the cost of production on the people doing the work.
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#12 Phil Rhodes

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Posted 02 June 2005 - 04:42 AM

Hi,

> Maybe they're willing to pay for the good craftmanship

Why would you get good craftsmanship in the UK?

There seems to be this ridiculous dogma that UK crews are good. How can this possibly be, considering most of them probably don't work on features more than once every few years? I think, like a lot of international and particularly American views of the UK, this impression is hopelessly out of date. Back in the 80s, when we'd actually had a worthwhile film industry to train up the workforce that was then current, this may have been true. Right now, though, if I had all the money in the world to make a feature, the last place I'd expect to find good crew would be in the UK.

Phil
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#13 Adam Frisch FSF

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Posted 02 June 2005 - 08:43 AM

Well, Phil, I'd argue with that. I'm not saying it's right, but the reputation exists. For instance when it comes to production design and art direction, miniature work and craft, English crews have a very good reputation. In fact, they probably have better reputation today than they did in the 80's - just take a look at the Aliens Special Edition DVD to see what Cameron thought about the british crews back then - and he hasn't been back since:-)
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#14 Dan Salzmann

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Posted 02 June 2005 - 09:41 AM

I find working with English personnel has been really great. The post-production staff really, really great. Far less grumbling than French crews and a sense of humour as well.
Maybe because there is so much commercials and music video work, the English crews are accustomed to working in a wider variety of situations.
Don't sell England short, Phil.
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#15 Michael Most

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Posted 02 June 2005 - 12:32 PM

One of the major reasons work goes to Canada is producers don?t have to pay for Health and Welfare or Pensions in Canada.  So the question might be.  Is the lack of universal health care forcing producers to leave the US?  Anti labor people will be forever blaming the cost of production on the people doing the work.


The high cost of health coverage is a problem in every industry in the US these days. However, the primary reasons productions go to places like Canada are:

1. Exchange rate. Which is also one of the major reasons Canada is not getting anywhere near as much US originated work these days as it used to. Due to the ever weakening US dollar, this is not the factor it once was.

2. Labor based tax breaks. For every dollar you spend on crew in Canada, you get a good percentage of it given back to you by the government. Although in my mind this is clearly an unfair trade practice, the US government doesn't seem to want to do anything about it, so it's been left up to the states to come up with their own incentive programs. The ones that have done so - in particular Louisiana, New Mexico, Illinois, and New York - are benefiting substantially in the work they have been able to attract, in many cases getting productions that as little as a year or two ago would have gone to, yes, Canada.

3. Actor buyouts. About 2 years ago, SAG started a program to crack down on SAG actors working without a SAG contract. This was brought about largely by the ever increasing practice of taking a production to Canada and hiring US actors on a buyout basis, i.e., no residuals, no P&W, no SAG contract at all. This was one of the generally "hidden" reasons for a number of productions to shoot in Canada, especially TV movies, the one that producers knew about but few others seemed to talk about. And it's one of the most significant.

4. It's closer than Eastern Europe or Australia. Also not talked about very much, but if a production is hell bent on saving every penny they can, Eastern Europe and Australia are both significantly cheaper to shoot in than Canada. However, they are a long way from Los Angeles, and thus a bit more difficult for the execs to keep an eye on.

Many in the Canadian film industry will claim that other reasons include trained crews and good locations. Those who claim such things are a bit deluded. The real reasons are money, money, and money. That's it.
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#16 Richard Boddington

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Posted 08 June 2005 - 11:08 AM

A few points mmost:

"Although in my mind this is clearly an unfair trade practice, the US government doesn't seem to want to do anything about it,"

The USA is the king of subsidies for agriculture, to the tune of several billion a year. Isn't that an unfair trade practice? All governments try and encourage business with tax breaks and grants, including the US gov't.

If I was a US politician I would not be too concerned about film production leaving the USA for Canada, it's peanuts. I'll bet most Americans are completely unaware that the province of Ontario is now by far the number one car producing region of North America. Producing more than 100,00 cars a year than Michigan does. (Michigan used to be number one.)

Since Canada has no car companies of it's own this was done by luring US and Japanese car makers to Ontario, over the USA, with tax breaks and financial incentives. The Canadian gov't has purposely kept this very quiet. They want Americans to keep believing Michael Moores stories about car production going to Mexico, when in fact it has gone north.

The point to all this....run away films account to chump change when compared to US jobs lost to Canada in the automotive industry.

"Many in the Canadian film industry will claim that other reasons include trained crews and good locations. Those who claim such things are a bit deluded. The real reasons are money, money, and money. That's it."

If money where the only issue why not shoot in Mexico? It's much closer to LA than either Toronto or Vancouver, and the USD buys a lot more Pesos than it does Canadian dollars.

"Is the lack of universal health care forcing producers to leave the US? "

This is an issue for many US businesses. GM is saying that each car they sell has $1,500.00 worth of health care premiums built into the cost. And if you've been following the news, GM isn't doing so hot these days.

Also, Germany (which has universal health care) just surpassed the USA to be the world's number one exporter.

The odd thing is that the USA would save a ton of money adopting universal health care. The AMA has done a good job of selling horror stories about the Canadian system to the US public. But my family and I have used it for three decades with no problems of any kind, so I don't know what they're talking about? My friend with cancer has had no problems at all getting quick access to treatment.

Universal heath care would be a huge plus for many on this forum, as most of you I know are freelance so you don't get health care via an employer. This would allow you to have health insurance whether you're working or not, and that would be nice for many of you I'm sure.

I'd be willing to bet that many USA film workers have no health insurance at all. Especially younger people low on the ladder.

R,
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