Despite robust and growing profits, GE Transportation continues to seek ways to drive down labor costs. GE’s quest for cheaper labor has put it on a collision course with UE Local 506 members who make locomotives and off-highway vehicles at the GE plant in Erie, Pennsylvania.
Local 506 President Scott Duke announced on June 23 that the union and GE had been unable to reach an agreement on how to save 950 good paying union jobs at the Erie plant, which employs about 5,000 people.
GE plans to ship those jobs to its non-union plant in Fort Worth, Texas where the average wage is about $10 an hour less than the wages paid at the Erie plant.
Duke said that despite the lack of an agreement, Local 506 leaders and members remain committed to saving the jobs at Erie. “We are now evaluating all possible options,” said Duke. “UE officials will be speaking to company officials on Monday.”
Duke did not elaborate on what union officials and GE management would be talking about on Monday.
Duke said that UE’s campaign to keep the jobs in Erie would continue and that Local 506 leaders would meet immediately to consider the union’s next move, which may include “pursuing existing NLRB charges, additional legal challenges, and all possible labor actions.”
After signing the current collective bargaining agreement with Local 506, GE Transportation in 2011 doubled its 2010 profits to more than $750 million. In 2012, GE Transportation reported a profit of $1 billion.
But in April, GE executives told the union that it was moving some of the work done in Erie to Fort Worth.
Union officials began negotiating with GE to save the jobs and mounted a multi-pronged campaign to keep the jobs in Erie. The theme of the campaign is “Keep it made in Erie.”
During negotiations, the union proposed work rule and other efficiency changes that would save GE $26 million.
In a message to members dated June 18, UE Local 506 said that “the savings will be achieved by correcting the parts-flow issue in the plant, reducing absenteeism, rearranging the break schedule, and eliminating costly severance and retraining costs that would be caused by the job cutbacks which GE proposed on April 9. The union’s proposal requires the company to guarantee that none of the 950 jobs can be moved prior to June 21, 2015, when the UE-GE National Agreement expires.”
But GE refused Local 506’s cost saving proposal and instead demanded that the union agree to a wage freeze and a two-tiered wage system that would reduce wages for newly hired workers.
“We met with our members last week and they strongly instructed us not to accept the wage freezes, two-tier wages, mandatory overtime, and other types of wage cutting demanded by GE, said Duke.
GE during negotiations has insisted that the purpose of transferring work to Fort Worth was to improve efficiency, not to cut wages.
But an independent study by the accounting firm of Schaffner, Knight, Minnaugh and Co. given to the company last week by Local 506 finds that locomotion production at the Erie plant is twice as efficient as the same production in Fort Worth. The study also finds that off-highway vehicle production is more efficient in Erie.
The study’s findings appear to discredit GE’s assertion about its motive for moving work to Fort Worth.
Duke on Sunday said that Local 506 members feel betrayed by the company.
“GE Transportation made billions of dollars largely from our labor and leads the world in locomotive production, winning (the) GE business of the year (award in 2012),” said Duke. “We helped them win the Super Bowl and all along they were planning to fire the team. They engaged in the secret transfer of work while we were helping them make those profits. This whole bargaining process was an attempt to get us to approve something that they had already started to carry out.”
Because of the current collective bargaining agreement, the jobs cannot be moved to Fort Worth until October.