UE-GE 2007 Contract Information: Negotiations Summary - Tuesday, May 22nd (#1)

Summary #1
Differences Are Obvious
In UE-GE Opening Session

New York – Tuesday, May 22

It is clear from the start that UE and General Electric sit down at the bargaining table with very different views, and very different goals, as the two sides’ bargaining committees met at 3:00 p.m. on Tuesday, May 22 to exchange opening statements.

UE President John Hovis started by quoting former GE Chairman Jack Welch, who in comments on the company’s 1996 results called GE "a $7.3 billion net income machine." The company of today "makes it 1996 predecessor look like a rusty antique in comparison. GE’s profits have nearly tripled since then to last year’s astonishing total of $20.8 billion."

Hovis took issue with the company’s "familiar rhetoric about ‘competitive pressures,’" noting that the company largely dictates the terms in many of the markets in which it operates. "When GE is not entering into joint ventures with the ‘competition,’ it simply buys its way into market dominance," taking note of the company’s "$80 billion acquisition binge over just the past five years," highlighted by a ten-day period in January 2007 during which "GE announced three acquisitions totaling $15 billion."

A major source of this dizzying success is GE’s workers, "among the best and most productive in the entire world," said Hovis. "Last year alone, they produced an average of $65,000 each in net profits, a figure not even approached by any perceived competitor." But this performance by GE’s employees has not been rewarded with "any significant improvement in living standards over the past four years," commented the UE president. Instead, he said, real wages of UE-GE members have increased only about one percent a year over the term of the expiring contract – if you leave out of consideration sharply increased medical insurance contributions. Hovis blamed this "lackluster result" in part on the erosion of the cost of living provision (COLA) to the point where it now protects against "only about 38 percent of price increases." On wages, Hovis concluded, "Clearly our members are entitled to substantial general wage increases in each year of the contract, and to an improved COLA," to protect against inflation.


On medical insurance, Hovis pointed out that "increased cost shifting 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." A worker with two dependents on HCP now pays over $1,500 a year in contributions alone, he noted, and those on Comprehensive Medical Benefits (CMB) pay even more.

UE believes fundamental change in the health care system is needed, said Hovis – in particular single-payer national health insurance. "GE, unfortunately, continues to resist this idea." Hovis took GE to task as "a charter member of the medical establishment" whose profits in its medical equipment division have been "zooming." Consequently GE has been at times "part of the problem rather than part of the solution" to runaway medical cost inflation. The problem will not be solved, he said, by "market" approaches "such as the currently fashionable ‘consumer directed’ health care," and UE "will resist further cost shifting to active employees and to retirees," while proposing improvements in such areas as vision, preventive services, dental, weekly STD, and to the Medical Care Plan for Pensioners.

Hovis noted that while the company has a lot to say about medical insurance, it has been nearly silent on the issue of paid time off, where there have been no improvements for 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 gone 37 years without improvement. This has been particularly unfair," he continued, "to low service workers, who have only two S&P days for up to nine years of service and the smallest amount of vacation."

Adding insult to injury for newer GE workers are the extended progression schedules and 60-cent night shift differential, unchanged since 1988. "Believing that workers should be paid for what they do, rather than when hired to do it," concluded Hovis, "the UE will propose to abolish these two provisions."

Hovis warned the company that UE will "vigorously oppose any attempt by GE to extend" to present or future UE members the "massive benefit cuts" imposed on some salaried employees hired after January 1, 2005. Hovis made clear the union’s strong convictions on this issue: "…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."


The union will propose "substantial increases to both regular and guaranteed minimum pensions… as well as a career earnings update," and to lower the early retirement age from the current 60-year mark where it has remained since 1979, said Hovis. He also told the company that "it is past time" for GE to grant a structural pension increase and adopt a pension COLA for its current retirees, who have gone since 2000, and in some cases since 1997, without a raise. With the GE pension trust overfunded by more than $15 billion, and not requiring a contribution from GE for 20 years, said Hovis, the company "can easily accommodate these improvements.

Job and income security concerns were again highlighted for GE workers by the company’s 2006 closing of the Ontario, CA aircraft engine repair plant, with much of the work diverted to a GE acquisition in Europe. "Last year GE passed a dubious milestone of sorts," said Hovis. "For the first time its foreign employment exceeded its domestic employment." Expecting this trend to continue, and with job insecurity remaining a worry to our members, Hovis said the union will propose changes in contract language in this area and to income security benefits, including a renewal of SERO language and a reopening of the SERO "window."

President Hovis concluded his remarks by noting that in 70 years of bargaining with GE, UE has always entered bargaining with "a sincere desire to reach an equitable agreement." Without underestimating the difficulties, he said, he believes that "with a lot of perseverance on both sides, we can reach agreement by June 17."


GE’s spokesperson John Gritti delivered the company’s opening statement. Beyond sharing the hope for an agreement by June 17, his statement had little in common with Hovis’. He quickly made it clear in which areas the parties may disagree: "We will certainly be discussing healthcare, pensions, wages, job and income security, SERO windows.

Gritti talked at length about GE’s ability to attract the new employees it needs due to "the value of a GE job" in relatively high wages, healthcare coverage, pension and S&SP benefits. "GE is able to attract the best and the brightest from colleges, other businesses, and in communities where we work. The 25,000 plus employees we have added… prove this… The value of a GE job has allowed us to hire the cream of the crop…"

On healthcare, Gritti said, "Our costs per employee are rising, plain and simple. We feel we must maintain a reasonable level of cost sharing between the company and our employees." On pensions, "our pension design has always been to target a total ‘replacement income’ of 70% to 80% when coupled with Social Security benefits and personal savings. I’m sure we will be discussing improvements," but warned that they must "continue to be within our replacement income targets."

On SERO, Gritti said, "It was added to address job-loss events for long-service employees," and warned, "How a window event provides job security, and why it still makes sense based upon the extremely high costs to the company, is a topic I’m sure we will debate."

UE negotiators were joined at our bargaining table by several representatives of the IUE-CWA, UAW, IAM, IBEW, and Flint Glass Workers-USWA. At the invitation of President Hovis, spokespersons for the IUE-CWA, IAM, and IBEW offered brief comments.

Negotiations resume Wednesday morning with the union’s presentation on job and income security issues.