GE and unions begin bargaining; company takes a hard line

The first week of negotiations on a new collective bargaining agreement between GE and its US unions wrapped up on June 5.

Union representatives attending the negotiations in New York City said that GE is willfully ignoring the important role that its workers have played in the company’s success over the last four years.

“The company has come out with a lot of information,” said Fred Harris, recording secretary for UE Local 601, who has been sitting at the bargaining table. “They basically said that they have a lot of money, but they want to keep the money. They don’t want to share it with the worker who produced the money.”

GE is bargaining with the Coordinated Bargaining Committee (CBC), a coalition of 11 unions whose members work for GE in the US. The two unions with the most members at GE are UE and IUE-CWA, and they are taking the lead during the negotiations.

The CBC is proposing a fair wage increase that reflects the important contribution that the workers have made to GE’s success and improves members’ standard of living.

It also wants

  • a health care plan that provides uncomplicated access to quality health care like the plan they had before the latest collective bargaining agreement went into effect,
  • a defined benefit pension plan that provides retirement security for all employees, including those hired after January 1, 2012, who the company has barred from participating in the pension plan, and
  • protections from outsourcing, which GE is using to lower labor costs and weaken the bargaining position of its union workers.

UE General President Bruce Kipple said that in 2011, the last time that the CBC and GE negotiated a new collective bargaining agreement, GE took advantage of the unions’ unfavorable bargaining position to “overreach,” which resulted in a roll back of health care and pension benefits and inadequate wage increases.

The union’s unfavorable bargaining position at the time was caused by GE’s financial instability, largely the result of management’s decision to enter the financial services business, a decision that nearly caused GE to crater after the 2008 financial crisis.

“Our members will not stand for another round of one-sided negotiations!” said Kipple during his opening remarks as the negotiations began. “We come to the bargaining table with proposals that push back against the company’s overreach of 2011.”

But as union representatives  presented their case for a fair contract during the opening week of negotiations, GE management appeared to be unmoved.

In one such presentation, union representatives described the problems that the company’s new health care plan has created.

“People are having all sorts of problems with this health care system,” said Sherice Stark, business agent for UE Local 332 during a break from the negotiations. “It’s too hard to use; it’s complicated; it’s expensive. (GE management) seem to shrug their shoulders and agree with us, but I haven’t seen any answers for this yet.”

The average union GE worker is paying 2.4 percent more for health care than they paid in 2011, which has resulted in a $21 million health care cost shift to workers.

The higher health care costs have eaten into take home pay.

According to a calculation made by UE researchers, after rising health care costs and inflation are taken into account, workers pay at GE went up only 0.52 percent a year.

At the same time that pay stagnated for workers, GE profits rose at a healthy clip.

In 2010, GE reported profits of $14 billion; four years later, it reported profits of nearly $18 billion, up by more than 25 percent.

GE CEO Jeffrey Immelt fared much better during this four-year period than the workers who made these profits possible.

In 2010, Immelt was paid $21.5 million in compensation; in 2014, his annual compensation soared by 73 percent to $37.25 million.

While the last four years have been good to Immelt and GE, the future looks even brighter.

GE representatives told union bargainers that the company has $250 billion worth of back orders booked, and most of those orders are for Tier 4 locomotives, LEAP aircraft engines, and H-class turbines, all of which are made by union workers.

The rosy outlook has led GE to announce that it will spend $50 billion to buy back stock shares, which will make wealthy investors even wealthier.

While GE seems more than ready and able to share its wealth with top executives and wealthy investors, it’s bargaining position so far suggests that it has a different agenda for workers.

As a result, this year’s bargaining will be as difficult as any since GE recognized its first union in 1938, and it may take more than hard bargaining to win a fair contract for GE workers.

GE insists on moving work to low-wage Texas, UE vows to “keep it made in Erie”

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.