The Perils of Construction in the U.S.

Did Goldman Sachs (GS)  know this when it started construction on its new headquarters?

According to Department of Labor statistics, more than three construction workers died per day in 2006, the latest available figures.

So far, thankfully, no one has been killed on the Goldman Sachs construction site. But that's not because Goldman is particularly good at construction: the banks chief administrative officer readily admits that the bank is "not expert in the ways of construction". Instead, the best it can do is accept assurances from people who are expert in the ways of construction, such as its contractor, Tishman Construction Corp.

The problem is that Tishman is, necessarily, a US contractor, and US construction sites are simply very unsafe places to work. It's only sheer luck which has prevented deaths at the Goldman site: One architect suffered paralyzing injuries when seven tons of aluminum wall studs fell from the building and crushed a trailer he was in, and on another occasion a 30-inch-by-30-inch aluminum plate fell 18 stories and "landed like a knife" in the active playing fields adjacent to the site.

New York's construction sites are death traps, in stark contrast to construction sites in other financial centers. Can you imagine these sort of stories coming out of Japan?

It's not a question of cost-cutting: Construction costs in the US are enormous. It's more of a cultural thing, I think: Contractors simply don't have the zero-accident mindset hardwired into them in the way that they do elsewhere. And as a result, their clients, like Goldman Sachs, are going to have to suffer through occasional nasty publicity. Because safety refresher courses and full-time safety officers can't, won't, change a 110-year-old corporate culture overnight, much as Goldman and Tishman might like them to.

Comments

[nickgogerty]

any numbers or stats to back up the story would be appreciated.