Unions warn GE about dangers of overreaching

The first round of negotiations between GE and UE and IUE-CWA, GE’s two largest unions, came to an end on Thursday. Talks resume on Monday when the hard bargaining begins. As the two sides wrapped up the first round, GE continued to hammer home its main message: a highly competitive marketplace requires that workers accept major concessions.

The unions warned that GE’s concession demand is a dangerous act of overreaching that will make it difficult to achieve an agreement that is fair to workers and company alike. The union pointed out that GE’s gross profits of $14 billion last year shows that it has competed very well under the current wage and benefit structure.

The unions also proposed that GE reward and recognize their workers’ role in creating GEs enormous wealth by maintaining retirement security for active and retired employees, protecting their health by continuing to provide a comprehensive, affordable health care plan, and paying  a fair wage that allows new hires to attain and current employees to maintain a decent standard of living.

During its meeting with UE on Wednesday, June 8, GE laid out its position on wages, saying that it’s hard for it to imagine how GE can stay competitive with its current wage structure. According to GE, its UE members make “$6 to $14 an hour more than the average manufacturing worker in the US; its IUE-CWA members make $9 to $11 an hour more.

John Hovis, UE president responded unapologetically, “We’ve done a very good job of representing our members and we’re very proud of it.” He also added that “GE still makes $42,000 in profit per worker.”

Steve Tormey, UE-GE Conference Board secretary added that “the name of the game for GE is not how much you pay, but how many you pay to produce the product.”  In the 1980s 7,500 workers at the GE locomotive plant in Erie, Pennsylvania produced 350 locomotives a year; today 3,600 workers at the plant produce 915 locomotives a year. “We’re producing nearly three times the number of locomotives with less than half the people,” Tormey said.

On Tuesday, June 7, IUE-CWA retirees had an opportunity to make their case for a pension increase; UE retirees did the same on Wednesday. Wanda Wiliamson, a retiree from Bucyrus Ohio IUE-CWA Local 722 and Kevin Mahar IUE-CWA Local 201 Retirees Council president told GE negotiators that retirees needed regular cost-of-living raises, that some retirees were cutting their prescriptions in half because they couldn’t afford the medicine, and that the high deductible health care plan proposed by the company would be disastrous for retirees.

One of GE’s main proposals is to ban new hires from joining the company’s defined benefits pension plan and instead make them enroll in a defined contribution plan (for instance, a 401(k) plan). The company says that taking away the defined benefit pension plan from new hires is a trend among its competitors.

The unions replied that trends don’t justify making new hires’ retirement less secure. At the UE meeting, Tormey referred to a Wall Street Journal article, which said that the average household headed by a worker 60-62 years old with only a 401(k) plan on which to retire has less than one-quarter of what is needed to maintain his or her standard of living in retirement. Tormey also said that over $1 trillion in 401(k) plans was lost in the financial crash of 2008, and while some of that value has been recovered, the value of those plans is still below pre-crash levels.

Tormey said that while GE wants to force new hires out of the defined benefits pension, it maintains a well-funded supplemental defined benefits plan for 3,200 highly paid executives to ensure their retirement security.

Union negotiators also argued that it’s time to change the pension formula to allow retirees and those who will retire in the future to catch up with cost of living increases. Tormey said that the current career earnings formula discriminates against hourly workers and called for a new formula that addresses this problem.

Both UE and IUE-CWA reiterated how important it is for them to protect their members comprehensive health care plan, which the company wants to replace with a high deductible plan called Health Choices. Under the comprehensive plan, workers pay about 21 percent of the plan’s cost; non-union GE workers forced to enroll in Health Choices pay 35 percent of the plan’s cost.

Mary Stewart-Flowers, UE Local 618 president said that she knows staff enrolled in Health Choices who have foregone medical treatment because it is too expensive.

IUE-CWA summed up its position by saying that it doesn’t want members moved into Health Choice, it doesn’t want new hires moved into a defined contribution plan, and it wants to maintain the SERO, which provides money and benefits to laid off workers. “We are unified on these issues and shall remain focused.”

UE president Hovis said that in the nine contract negotiations in which he has been involved, he has never seen the company demand so many concessions from its workers. “Even though you say you’re willing to bargain, you’re the ones who have drawn the line in the sand, said Hovis. “We’ve got some tough work to do. I expect to take a few lumps, but I also expect the company to take a few lumps.”

“I hope we can go back and ask our members to support a fair agreement,” Hovis continued. “I don’t think that either party can afford to go down a path that does not lead to a fair agreement. We’re willing to work long and hard hours to get it done.”


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