You are here

UE-GE 2007 Contract Information: UE Opening Statement for Negotiations

UE Opening
Statement 2007

STATEMENT OF JOHN H. HOVIS, GENERAL PRESIDENT
United Electrical, Radio and Machine Workers of America (UE)
On the opening of National Negotiations with the General Electric Company

Tuesday, May 22, 2007

Ten years ago, in commenting on General Electric’s 1996 results, GE Chairman Jack Welch described the company as "a $7.3 billion net income machine." Now, only a decade later, the new GE model is performing in such a grand fashion that it makes its 1996 predecessor look like a rusty antique by comparison. GE’s profits have nearly tripled since then to last year’s astounding total of $20.8 billion.

Moreover, GE’s machinery appears set to perform even better in the future. In the 2004 GE annual report, current CEO Jeffrey Immelt wrote, "Simply put, we generate a lot more cash than we need to grow your Company." The 2006 annual report stated that "Today, GE is a stronger company ... margins and returns are expanding and organic growth is twice our historic rate."

Despite this embarrassment of riches, company newsletters continue to contain familiar rhetoric about "competitive pressures." But as we have noted in the past, GE is now in the position of largely dictating the terms in many of the markets in which it chooses to do business. When GE is not entering into joint ventures with the "competition", it simply buys its way into market dominance. The company’s $80 billion acquisition binge over just the past five years is testimony to the growing irrelevance of any alleged competition. Indeed in one ten day period last January, GE announced three major acquisitions totaling $15 billion.

GE workers meanwhile, remain indisputably among the best and most productive in the entire world. Last year alone, they produced an average of over $65,000 each in net profits, a figure not even approached by any perceived competitors. Unfortunately, GE’s profit bonanza has not resulted in any significant improvement in their living standards over the past four years. On the contrary, our GE members will realize only about a one percent per year real wage increase during the contract’s term. That’s before sharply increased medical insurance contributions imposed on them are even considered. This lackluster result is due in part to the erosion of our cost of living (COLA) provision to the point where it now protects us against only about 38% of price increases. Clearly our members are entitled to substantial general wage increases in each year of the contract, and to an improved COLA to prevent those increases from once again being consumed by inflation.

With respect to the issue of medical insurance, we are well aware that, as has been the case in every negotiation in recent years, this subject will be one of contentious debate. For our part, we would note that increased cost shifting to employees has occurred in every set of negotiations since 1985, a strategy which has done nothing to arrest overall health care costs, and which has become increasingly burdensome to our members. An employee with two dependents in Health Care Preferred (HCP), for example, now pays over $1,500 annually in contributions alone, with those in Comprehensive Medical Benefits (CMB) hit even harder.

We continue to believe that fundamental change to our health care delivery system, and in particular the establishment of single payer national health insurance, provides the answer to the nation’s health care crisis. GE, unfortunately, continues to resist this idea. As a charter member of the medical establishment, and with profits zooming in its healthcare division, GE at times has been part of the problem rather than part of the solution. But the healthcare crisis will not be solved with "market" approaches, such as the currently fashionable "consumer directed" health care, any more than it was by the "managed care" wave which preceded it. In the meantime, our Union will resist further cost shifting to active employees and to retirees. In addition, we will propose a number of improvements to our existing coverages, including enhancements to our vision, preventive care, dental, and weekly STD benefits, as well as to the Medical Care Plan for Pensioners.

In marked contrast to medical insurance, GE has had little or nothing to say about the issue of paid time off, where no improvements have been forthcoming in many years. Accordingly, the UE will propose an additional paid holiday, an improved vacation schedule, and additional Sick and Personal leave days, an area which has now gone 37 years without improvement. This is particularly unfair to low service workers, who have only two S&P days for up to nine years of service and the smallest amounts of vacation.

To add insult to injury, newly hired workers continue to be subjected to extended progression schedules and the 60 cents night shift differential, an amount unchanged since its inception in 1988. Believing that workers should be paid for what they do, rather than when hired to do it, the UE will propose to abolish these two provisions.

In the same vein, the Union will vigorously oppose any attempt by GE to extend the massive benefits cuts visited upon certain salaried employees hired after January 1, 2005, to our present or prospective members. With GE openly predicting the brightest of futures for itself, we find it unconscionable that the company would seek to deny to the next generation of GE workers, the opportunity to share fully in what we have negotiated over past decades.

At the other end of the service spectrum, for those who envision life after GE, pensions will continue to be an issue of great importance. The massive GE pension trust, to which GE has not contributed for 20 years, is now overfunded by more than $15 billion. The company can easily accommodate the substantial increases both to regular and guaranteed minimum pensions that we will propose, as well as a career earnings update. In addition, UE will propose to lower the current age 60 early retirement age, where it has remained unchanged since 1979.

With respect to retirees, while we acknowledge that the "13th check" of 2003 was a welcome step, it has long since evaporated. Having gone since 2000, and in some cases since 1997 without a raise, it is past time for GE to grant to its retirees an immediate and substantial structural pension increase, and to accept the concept of a pension COLA.

If GE retirees remain insecure in their living standards, active employees remain insecure in their jobs. That holds true regardless of how much money GE "earns in the marketplace." GE workers continue to be subjected to plant closings and sales, subcontracting, and work transfers, often to foreign countries.

For example, in 2006 UE members in Ontario, CA saw their aircraft engine repair facility closed after half a century of operation, despite the fact that they had achieved the highest standards in quality and productivity. Much of their work was diverted to a GE acquisition in Europe. For the people of Ontario, it was deja vu. Twenty-five years ago, GE closed its flat iron plant in that city and sent the work to Mexico, Brazil, and Singapore.

Last year GE passed a dubious milestone of sorts. For the first time its foreign employment exceeded its domestic employment. We have no reason to doubt that this trend will continue. Given the continuing insecurity to which our members are subjected, we will propose changes to our contract language in this area, and also to our income security benefits. These include a renewed SERO provision and the reopening of the SERO "window."

In addition to the issues noted above, UE will propose a number of other changes to our existing contract language.

In conclusion, I would note that UE and GE have a negotiating history dating back 70 years. Our Union has entered into every set of negotiations since then with a sincere desire to reach an equitable agreement. Our approach remains unchanged in 2007. We do not underestimate the difficulties we face over the next four weeks in trying to reach an agreement that will go a long way towards meeting our members’ expectations and justly rewarding them for their efforts. Nevertheless, based on past experience, I choose to believe that with a lot of hard work and perseverance on both sides, we can reach such an agreement by June 17. We intend to do everything possible between now and then to achieve that goal.