Company continues pursuit of workforce concessions as it reaps the financial benefit of massive tax savings in 2018
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Jonathan Kissam, UE Communications Director
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April 15, 2019 (Pittsburgh, PA) – As Wabtec continues to pursue concessions from its highly skilled workforce in Erie, Pennsylvania the company and its stockholders will enjoy extraordinary financial rewards thanks to massive tax cuts in 2019.
According to Wabtec’s 10-K form, the company paid about $6.9 million in federal U.S. income tax in 2018, compared to $86 million in the prior year. Even considering that the company’s 2017's total taxes were at least somewhat inflated due to the one-time transition tax on repatriated earnings that was levied by the Tax Act in 2017, the company's federal taxes in 2016 were not much different overall (about $72 million). (See page 83 of the 10-K form)
The multi-million-dollar windfall dwarfs the amount of economic loss to the local workforce in Erie, currently fighting to maintain family-supporting wages and, and the local economy. Wabtec officials have attempted to devalue the highly profitable workforce in negotiations following a nine-day lockout upon completion of its merger with GE Transportation. Wabtec officials continue to assert that wages are too high “for that region.”
“It is unconscionable that a company that has received tens of millions of dollars in tax breaks would turn around and demand such relatively small concessions from its workers whose salaries pale in comparison to its multi-million dollars executive salaries and bonus packages,” said UE General President Peter Knowlton, the union that represents Wabtec workers in Erie, Wilmerding and Geensburg, PA. “Wabtec acquired a business which has consistently posted double-digit profit margins, thanks to a highly-skilled workforce with unmatched experience in locomotive building. Now, Wabtec stands to topple those profits thanks to these tax breaks, yet continues to push for cuts to middle class families.”
An economic impact study released in February by nationally recognized firm Parker Philips, showed the negative economic impact the proposed wage reductions would total about the same amount as Wabtec CEO, Raymond Betler’s corporate merger bonus.
Upon completion of the merger with GE transportation, a $16 million payment was made to its CEO, Mr. Betler, and $43 million in compensation to 19 other executives.
An analysis of the 466 call backs currently being negotiated, show that proposed wage reductions of 40% would result in a loss in direct and induced wages of $17.1 million, 82 more local jobs, and a ripple effect of $11 million in economic loss to the economy.
Representatives of UE Local 506, UE Local 618 and representative of UE National continued to meet with Wabtec’s negotiating committee, while working under a 90-day interim agreement and negotiating with the company.
“UE workers are the catalyst for the financial success of stockholders and executives of Wabtec,” continued Knowlton. “With this massive financial windfall in mind, it would stand to reason that Wabtec would drop demands for lower wages, mandatory overtime, and other dangerous and regressive workplace rules.”
UE Local 610, which represents workers at Wabtec’s Wilmerding and Greensburg facilities, begins negotiations today for a new contract.
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