UE-GE 2011 Contract Information: Negotiations Summary - Thursday, June 9 (#9)

Summary #9
Bargaining Moves into Second
Round as Union Warns
Company on Its Proposals

New York – Thursday, June 9

Negotiations resumed on Thursday, June 9 for a half-day session. This was the last day of the separate UE and IUE-CWA bargaining tables; next week bargaining shifts to multi-union groups meeting with the company at the “small table” and issue-specific “large tables.” UE-GE Conference Board Secretary Steve Tormey started off Thursday’s session by discussing some UE contract language proposals.

The union proposed double-time pay for early call-in overtime (overtime before the start of the employee’s regular shift) for second and third shifts. “This has been an anomaly,” said Tormey, because the company pays double-time for first shift workers in this situation. “It’s time to establish this as a uniform premium.” Mary Stewart-Flowers, president of Local 618, added that when third shift workers come in early on Sunday, they’re getting only time and a half.

GE spokesman John Gritti responded, “We could go the other way to time-and-a-half to make it uniform.”

After yesterday afternoon’s discussion in which the company moaned about the high cost of overtime but, ultimately, admitted that it was the cheaper alternative to hiring more workers, Harold Spencer, Chief Steward Local 1009, sarcastically told GE: “I am sure that you will be working overtime so this won’t be an issue.”

Tormey said the union proposed a full five years of recall rights for employees laid off with more than six months of service. The union also proposed that accumulation of service credits during layoff and illness, or occupational illness or injury, currently 12 and 18 months respectively, be extended an additional six months.

UE also proposed that restoration of service credits for a worker’s previous employment by GE occur after one year of service, rather than the current three years. Some UE members, having been rehired in Erie during the recent recalls, would benefit from this change.

In Article 12, Section 10, the union proposed to extend by six months a worker’s right to return to his/her old job following absence for illness or occupational injury. The union also proposed an addition to the no discrimination clause. “We’ve had some people in the past who were able to perform the core functions of the job, but the company doesn’t keep them on the job because it claims that the individual didn’t specifically request an accommodation,” said Tormey. “Therefore we propose that the no discrimination language be strengthened to include the guarantee that the company will offer a reasonable accommodation in accordance with the Americans with Disabilities Act (ADA).

Local 506 Business Agent Wayne Burnett told the company representatives that they need to be “a little more sensitive to disabilities. We have had several calls from disabled people who were required to prove that they needed drive in-passes to park in the plant when the company knew full-well that they had a disability. It was just an effort to embarrass them.”

John Gritti began the company wrap up. He offered the other members of the company bargaining team – Kevin Fitzgerald, Gary Quinlan, Doug Baker and Mallory Herr – the opportunity for final comments. Each said they appreciated the opportunity to work with the union at the UE bargaining table.

Gritti added his appreciation of the chance to work with the UE committee and said that UE’s presentations are always knowledgeable and “first class.” “I believe in this process. It gives us a chance to exchange ideas and opinions during the first three weeks even with the occasional arguments,” he stated.

Company Wrap-Up:
'Frustration' Ahead

Gritti then made another presentation with PowerPoint slides, identified as the “Large Table Wrap-Up.” The first of the slides seemed to brag about GE’s destruction of U.S. jobs, showing that 50 percent of the GE union jobs that existed in the U.S. in the year 2000 have been wiped out by 2011, and enumerating the plant-by-plant body count of jobs lost since 2007. “We got to look at different things to attract investments,” said Gritti, leading into the succeeding slides which seemed to suggest that GE workers are paid too much and hinder “competitiveness.” Other slides specifically attacked the defined benefit pension, current GE health benefits, and SERO.

Speaking of the final seven days of bargaining that lie ahead, Gritti told the members of the UE-GE bargaining committee, “ I guarantee that you’re going to be stressed and frustrated. We’ve got a long way to go and we’ve had a lot of differing ideas. We’ve got to figure out a deal that works for the company, our employees, and you.”

Members of the UE bargaining team then offered their summations. Local 506 President Roger Zaczyk told the company negotiators it’s been a pleasure working with them. More needs to be done to strengthen Article 23 to address the farm-out of work. He reminded the company that manufacturing workers suffer physical wear and tear. “SERO is our only escape. The reason people work longer today is not a desire to keep working, but economic hardship.” Zaczyk told the company, “The cost shifting of your “Health Choice” is a bad choice. This company is in fact rich. Our current contract took decades to build – don’t try to undo the accomplishments of decades.”

“I would like to give kudos to our national officers,” said Wayne Burnett. He told the company side, “I am a little disappointed that more of your team isn’t here for the closing statements. We’ve heard your presentations. I am not looking forward to taking back to our members some of the sweeping changes you seem to want.”

Burnett added that Erie GE workers seem to have a “bad rep” at corporate headquarters in Fairfield. “We try very hard to work with you. We talk openly and honestly to resolve these things.” If the GE locomotive business needs to prepare to compete with Caterpillar now that it has purchased EMD, “that means all of us.” said Burnett. In the company’s complaints about labor costs, “ I didn’t hear anyone moan about Mr. Immelt’s $11 million bonus.” He told the company that replacing the defined benefit pension plan with a defined contribution, 401(k) type plan “just don’t cut it. It’s like going to the casino every week and betting your retirement. I don’t want to take the risk of losing it.”

“I’ve been in this company for 37 years,” Burnett added, “and I’m not ashamed of the wages we’ve made. The company has made billions of dollars from us. To compare us to companies that have been bailed out is wrong. Everyone lost money, we really need to take it seriously, and your proposals don’t bode well. I hate to go back to Erie tomorrow and have to tell our members what the issues are. I hope we can come out with something beneficial to both sides.”

Harold Spencer of UE Local 1009 spoke next. “We’ve been well represented here. I hope that we will continue to be well represented in the future.” The company’s proposal on pensions “worries me and that divides us.” He told the company that he will not be back at the bargaining table next week. Instead, he’ll be back at his shop in Anaheim, CA making picket signs.

It’s been a long three weeks, Local 332, President Scott Gates said, and the company’s proposals on Health Choice, SERO and cost shifting “leave us with a lot of work to do.” He stated that GE was reaching “way too far” on the degree of medical insurance cost shifting.

This was the first negotiations for Angel Sardina, Local 332 Business Agent. He thanked Steve Tormey and John Hovis for their leadership, and “the other side for listening to us.” He told the company that the wages it pays UE members are in some ways a bargain, “because many of us are doing the work of three people. We’re given cheaper materials, but we still manage to produce a quality product.” He said he hasn’t used the health plan much, but if he has to use Health Choice, “I’m going to lose money. I haven’t met anyone under Health Choice who likes the plan. We have to find something else.” With 12 years service, he said, he has a long way to go until retirement, but looks forward to having a good pension. Many retirees lost a lot in the stock market crash, and “ I don’t want to gamble on my future. It seems unfair of the company to make it hard for people to live in the last days of their lives.” He concluded, “ I’m hopeful we can arrive at a settlement.”

This is also Mary Stewart-Flowers’ first time at the national contract bargaining table. “We are an older workforce,” she said, “We will need to use our health benefits. I know people under Health Choice who have ‘avoided getting care,’ because of the high out-of-pocket cost.” She mentioned the delivery of a new baby that cost the parents $3,600 and “the cancer patient who faces an uncertain future.” “This plan is not a good match for our members,” pointing out that while there are over 2,000 recent hires in the Erie plant, none are in Local 618. “When we finally get those new hires, we want them under the defined benefit pension plan.” On SERO, she added, “We have an older work force, and we need SERO so that we have some way out.”

More Concern
About GE's Proposals

UE International Rep Gene Elk thanked the company for its courtesies and for the respectful manner with which it treated the UE committee. But he added, “I am particularly troubled by the company’s proposals. You are clearly overreaching here, especially with respect to healthcare and your insistence upon a defined contribution plan for new hires. If those proposals remain unchanged by the end of this process, if anyone asked for my recommendation, I would say, ‘Let’s stand up and fight!”

Randy Middleton of the IBEW said, “GE has always prided itself on being the best. But you benchmarked us against companies that went through bankruptcy and lost benefits. You compare us to companies that are paying less than average.” He told the company, “I can’t support that. Now, when a lot of our members are approaching their golden years, you want them to have inferior benefits.”

Mike Barrell from the Steelworkers local in Logan, Ohio told the company that it jammed a wage freeze down the throats of his union members. “I want you to know where the people of Logan are at. They gave you the freeze because you said you lost $20 million. Now the company is making money. It’s been a few years since we had a wage increase, so wage increases will be important to us. SERO is important to us. We don’t know if you’re going to come back and eliminate positions after the contract, so we want protections.” He called the company’s pension proposal “an attempt to shift the risk to us. We’re not investors, we don’t want to be investors.” On Health Choice, he told the company that salaried people have left the Logan plant because of the new plan and others have jumped to other health insurance, including coverage from their spouses’ employers. “Salaried people have told us they don’t want it to happen to us.” Finally, he reminded the company, “Whatever we negotiate, the people in Logan have to vote on.”

“Collective bargaining is the time to make life better for the members,” said Tom O’Heron of the IAM. “ I’ve sat at many bargaining tables with bankrupt companies, companies that lost half of their volumes, and companies that made money. We based those negotiations on the finances of the company and we did not race to the bottom.” He reminded the GE representatives, “This company is not in survival mode. We have a long way to go and I hope we get a good settlement here. I’m very passionate about the way we treat people.”

UE Secretary-Treasurer Bruce Klipple appreciated “all of the hard work that’s put into all of the presentations given here by both sides.” But the tough work “is only starting, and I’m hopeful we can come to an agreement.”

Klipple told the company that he is very “concerned about some of the things that you brought to the table. I’m concerned about how you got there. I’m concerned about company and union relations in the future.” The workers in Erie, Ft. Edward, and California “are first-rate and competitive. In shaping the future, it’s not who is going to be the cheapest, but who builds the best product.”

“I want to reiterate that the retirees are not well-off,” said Ron Flowers, president of the Erie Retirees Association of General Electric (RAGE.) “Many of our retirees are in such bad shape that they are eligible for rent and tax rebates. We’re in the lower 25 percent of the people that Jeff Immelt spoke about. You are in a position to help our retirees get out of this jam.”

Back in the 1970s, Flowers said, Erie Plant General Manager Rick Richardson invited the Erie union officers into his office “and told us we plan on taking locomotive orders away from EMD,” the General Motors locomotive division that was then number one in the business. “We all rolled up our sleeves, worked together and got it done. They didn’t come to us and say we need to take away benefits. We did it without concessions, we did it without hurting the new employees, we did it without cutting healthcare.”

“Why don’t you do it the way you did it before?” Flowers asked. “The employees you have now will work as hard as they ever have. Your employees will bail you out.”

Tough Bargaining Ahead

“We knew a long time ago that these negotiations would be difficult,” said Steve Tormey. “And if we fail to reach agreement, the responsibility for that falls squarely on the company. And let’s not lose track of our proposals, even as we consider the company’s agenda.” Tormey stressed that UE’s proposals, if adopted, would not make the company uncompetitive. He indicated that while wages may not be quite as important this time as in some past negotiations, the union expects and deserves structural wage increases for the membership. In addition, he noted that the COLA formula needs to be improved to protect those wage increases against inflation. Tormey also called for improved, not inferior medical coverage, including long overdue updates to the Medical Care Plan for Pensioners.

Reacting to GE’s numerous statements concerning “competitiveness,” Tormey noted that GE’s chief financial officer, Keith Sherin, had told stockholders that GE’s earnings prospects were the best they have been in ten years, hardly an uncompetitive situation.

“You talk about job security,” Tormey continued, “but apparently your proposal is to do away with the single most important component of our income security in the contract – SERO.” With respect to Health Choice, Tormey noted that the union knew it would be a GE proposal. He stated that he was unfamiliar with any contracts in the union that had the same levels of high deductibles, contributions, and co-insurance in one plan that characterize Health Choice. “I am also astounded that you did not even bother to survey the people on whom you have imposed Health Choice. You’ve taken extensive surveys of people’s experience and satisfaction with various GE insurance plans over the years. Now you have the arrogance to propose Health Choice to us when you haven’t even surveyed the people who are experiencing it already.”

Tormey stated that the union was used to tough bargaining with GE, particularly on medical insurance issues, and was prepared to do it again. “The problem is a matter of degree. You’re talking about a huge cost shift from employees paying 21 percent cost of health insurance to 35 percent, or even more. The cost of this plan places the biggest burdens on those who are the least able to bear it – the sick, the old, pre-65 retirees, and the lowest wage earners. The company admits that it is an outlier when compared to other U.S. companies by not offering workers any other alternative health plan. If you really believe that Health Choice is a great medical plan, than you shouldn’t have any problem leaving employees with an alternative to it.”

On pensions, Tormey disagreed with GE’s contention that denying new hires entry into the plan would have “no impact” on existing employees. “Your proposal has a great impact on existing employees. I don’t have to elaborate.” Calling GE’s proposal totally unnecessary, he stated that “I don’t believe that a relative handful of hourly new hires in the next few years will in any way negatively impact the company or a pension plan which now covers over half a million people. The company doesn’t need this proposal, and this issue is of great importance to us. I strongly urge the company to reconsider its position.”

Tormey concluded with a somber but firm warning to the company: “Our union doesn’t saber rattle. We’re not the ones coming in here and trying to turn things upside down. We will try very hard to resolve our differences. But we are not going to accept peace at any price.”

Hovis to GE: 'Reconsider
Your Overreaching Proposals'

John Hovis thanked the company representatives for their “kind words” about Tormey and himself. He also said he appreciated Mr. Quinlan’s participation at the table because it “gives us the opportunity to talk directly to the management in Erie.”

“We don’t like your health care proposals,” said Hovis. “There are a lot of different areas that need to be addressed - deductibles, contributions, which we can look at to make it match up to what we have now and have workers pay the share of medical costs that they currently pay.”

“I don’t ‘get’ the company’s pension proposal,” Hovis frankly told the GE bargainers. “That one is very difficult. We can move around some of the medical proposals. But if you’re looking at eliminating pre- and post-65 healthcare, and you’re looking at a defined contribution retirement plan, those may be insurmountable. This is not the time or place to look at so-called ‘competitive’ wages. If your looking at Caterpillar, the worst thing to do is to force us to the street and throw orders to them. Even though you say you’re willing to bargain, you’re the ones who have drawn the line in the sand. We’ve got some tough work to do. I expect to take a few lumps, but I also expect the company to take a few lumps.”

“I hope we can go back and ask our members to support a fair agreement,” Hovis continued. I don’t think that either party can afford to go down a path that does not lead to a fair agreement. We’re willing to work long and hard hours to get it done. We will look at your proposals and expect that you will look at ours.”

The UE president concluded: “We ask you to reconsider proposals we consider to be over-reaching. I can’t remember in nine negotiations these kind of tough proposals all at once. I look forward to next week and the ability to reach an agreement we can all be proud of.”

'Small Table'
Negotiations Begin Monday

The meeting adjourned at 10:52 a.m. Bargaining will resume on Monday, June 13 with the “small table” of negotiators from five unions meeting with the company, while “large table” committees deal with specific benefit and contract language issues.

UE was represented in Thursday’s session by President John Hovis, Conference Board Secretary Steve Tormey, Secretary-Treasurer Bruce Klipple, Wayne Burnett and Roger Zaczyk of Local 506, Mary Stewart-Flowers of Local 618, Scott Gates and Angel Sardina of Local 332, Harold Spencer of Local 1009, Ron Flowers of the Retirees Association of General Electric, and International Rep. Gene Elk. Political Action Director Chris Townsend represented UE at the IUE-CWA bargaining table. Also participating on the UE committee were Tom O’Heron of the IAM, Mike Barrell of the Steelworkers, and Randy Middleton of the IBEW.