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UE-GE 2007 Contract Information: Casey at the Bat

Casey
At the Bat

Like death and taxes, when National Contract negotiations are upon us, it’s a sure thing that the head of GE Union Relations will take to asking himself questions.

If you haven’t seen it yet, an "interview" with GE’s Bill Casey in something called "Focus" will soon be coming to a GE plant or mailbox near you. By the time you get done reading what he thinks about such things as health care, wages, pensions, etc., we doubt there will be much joy in Mudville. But this shouldn’t surprise us any. Even a company with GE’s marketing abilities realizes that when you make $21 Billion in net profits, it’s a hard sell to moan about business "competitiveness", while simultaneously trying to convince GE workers how good we have it. But that doesn’t stop GE from trying.

The Casey piece is actually the culmination of a series of mock interviews with various benefits people all produced and directed for our consumption. More than a few trees have been sacrificed to the effort. The Company’s strategy was laid out in an internal GE memo in July of last year. The memo makes clear that the Focus newsletters are an important part of the Company’s communications arsenal. It states as follows: "Approximately 130,000 employees will receive the newsletter in their home mailbox. By receiving it at home the newsletter will have more staying power while reaching ... the employee’s family".

But unfortunately for the Company, their attempts to soften us up have not succeeded in making us soft-headed. Accordingly, it is not necessary to respond to everything in the piece. A few points, however, are in order.

Where’s the Competition?

For openers, it’s interesting to note that while GE constantly talks about needing to remain "competitive" in their markets, they avoid talking about any specific GE competitors! That’s because it dominates the competition nearly all of the businesses it is in, including transportation, energy, consumer industrial, and the rest.

So instead, we are told that the current problems in the auto and airline industries are attributable to "appetites being unchecked for too long", meaning, of course, the workers’ appetites! We don’t know where Mr. Casey eats his meals, but if he’s looking for examples of unchecked appetites, he might take a peek at what top executives are consuming. The latest figures show that the average CEO is now paid over 400 times as much as the average worker.

Moreover, whatever difficulties may exist in certain industries such as auto or airlines, they bear no relationship whatsoever to GE’s situation. Nor do they have much to do with employees having it too good, any more than the reason GE is now auctioning off its non-union plastics division bears any relationship to "overcompensation". It is also more than a little ironic that Mr. Casey even dares to mention the auto industry. Auto workers have had substantially better wages and benefits than GE workers literally for decades. Whenever we brought it up, GE always told us they were not an auto company. Now in a thinly veiled effort to dissuade us from resisting more medical cost shifting or pursuing earlier retirement opportunities, GE wants to talk about hard times these days in auto. But most UE workers in GE are into a different mode of transportation anyway. They’re hopping aboard the UE 2007 Contract Express Train.

In Sickness and in Health

Speaking of medical, it comes as no surprise that the interview spends considerable time "focusing" on health care, and makes it plain that yet another round of cost shifting from GE to both actives and retirees is a centerpiece of GE’s bargaining agenda. Casey openly states that "employees can expect to pay more". However he neglects to mention what GE workers have already been through in just the last four years. Who can forget the HCP "reopener" of increased co-pays, including for prescriptions, resulting in the two day demonstration strike of January, 2003? This was followed by two rounds of higher medical contributions in 2004 and 2006. Employees with two or more dependents were hit with yet another substantial increase.

The result? An average UE hourly worker in HCP with two or more dependents now pays over$1,500 a year in medical contributions alone, including past deferred COLA. The same worker in CMB pays approximately a whopping $2,800 a year when you add up contributions, deferred COLA, and deductibles. That’s before any co-pays! Retirees were also hit with prescription co-pay increases in 2004. GE evidently still subscribes to the old Jack Welch theory that there is always more juice to be squeezed from the lemon. For your information, Bill, we’re already dry.

Brother, Can You Spare A Dime?

On the subject of wages, Mr. Casey favors us with "two pieces of data". The first is that GE production workers make 49% higher than the "national average". In other words, round up every slop shop in the country recorded in labor statistics, and pronounce yourself way above average. It’s total nonsense. Would GE trade a 49% wage cut for cuts in profits and worker productivity to match the national average? We hardly think so.

The other piece of data is to note that the top 100 union members in the company in 2006 had earnings ranging from $135,000 to over $170,000. Thus, we are assured, employees covered by the Contract "do pretty well by any measure". But those sums don’t reflect high wages at all. They reflect gross mismanagement and the triumph of "headcount" conscious bean counters, over those who don’t believe someone should be able to take up near full-time residence in the plant. Just maybe, it’s time to hire someone.

By this logic, we can all be assured that we are doing well by any measure on our pensions since Jeff Immelt and of four of his cohorts have so far accumulated pension benefits ranging from $9.3 Million to $60 Million according to GE’s last proxy statement.

The fact is that the average GE worker under the Contract will realize a real wage gain, after inflation, of around 1% per year! Any GE manager producing such numbers in any of the measurement categories that matter to GE would likely be looking for a new job.

Welcome To GE

Perhaps the most ominous part of the interview concerns new hires. Within days after GE’s announcement that it would slash the benefits of exempt and some non-exempt salaried new hires effective January, 2005, and in the process, undo over three decades of bargaining, the UE-GE Conference Board unanimously passed a resolution condemning GE’s action.  The resolution speaks for itself, and we stand by every word of it.

Moreover GE’s action smacks of hypocrisy. They have long talked about a "reasonable level" of cost sharing on medical costs. But for this category of individuals, that means no coverage of any kind in retirement, and 100% of the costs. This, along with the total elimination of all early retirement supplements, effectively means that almost no one can retire out of GE before age 65 when Medicare begins. And for those that GE throws away by transfers of work, plant closings, etc., don’t look for any SERO’s, because they’re gone too.

With any new hires many years away from a prospective retirement, you may wonder why GE would make an issue of this. After all, pushing these massive cuts will not help the Company sell one additional product or service. Nor do we agree that the "competitive landscape" or changes in Medicare explain such a drastic move. There are, we believe, two main reasons. The first is that GE will quickly realize big gains, not in real cash, but in its accounting. It’s all about how the numbers look to Wall St. And we all know that in GE’s world, that’s the audience that matters most. All of this flies in the face of what Jeff Immelt calls "organic growth" and quality "transparent" earnings, as opposed to gimmicks that can’t be repeated. But on this subject, GE is anything but consistent.

The second reason is that GE does not mean for the buck to stop here. Like a toxic time capsule, this threatens to infect all who plan on staying around GE for any length of time. In the long run, it threatens even the continued existence of the defined benefit pension plan.

Promises, Promises

Speaking of pensions, like many before him, Mr. Casey wants us to curb our expectations by cautioning us about "the unions’ hearty appetite for more" [notice how once again, it’s always employees and unions with big appetites and never the selfless and meek General Electric Co.], because it might "jeopardize" GE fulfilling its pension "promise" to plan participants. But as he well knows, the company by law must fulfill its pension obligations. No conceivable improvements we are talking about could possibly jeopardize anything. To say the pension fund may be caught short of cash is like saying the Sahara may be caught short of sand. In the unlikely event the day ever comes again, where GE actually might put some money into the pension fund, they might consider diverting some of the over $20 Billion they are now spending simply to buy back their own stock.

Needed: Some Fresh Air

GE has also been complaining about SERO and in particular the "window" provision. But SERO was born because of massive job losses that GE inflicted on its employees, a process that continues to this day. The interview reaffirms GE’s long-standing position that they will guarantee or promise nothing when it comes to real job security. Nor has GE shown any inclination to lower the current age 60 for early retirement, where it has stood unchanged for the last 27 years. Under the circumstances, can GE be surprised that its workers are clamoring for renewed SERO and a reopened SERO window? No moaning and groaning about how "expensive" it is, will change that.

No Rest for the Weary

Finally, we should note what neither Mr. Casey nor any of his fellow "Focus" interviewees has said one word about. That is the issue of paid time off. We’re not surprised that GE doesn’t like to talk about this subject, because the fact is we have had no improvements in holidays, vacations, or S&P days for many years. GE can attempt to ignore this subject, but we have no intention of keeping quiet about it. Bill, more time off just might even contribute to the "healthy lifestyles" GE says they want us to lead. Please add it to your health care coaches’ tool kits.

Strike Three!

We don’t underestimate Mr. Casey as an able and articulate defender of GE’s bargaining positions. It’s not his fault that he is obliged at times to advance the untenable and defend the indefensible. But if GE thinks their Focus "interviews" will deter GE workers from their determination to win substantial improvements in this year’s bargaining, they are of course mistaken. Just like his famous poetic namesake, Mr. Casey has struck out!"