of the UE-GE
On the Upcoming
2000 National Negotiations
Issued: March 31, 2000
It should come as no surprise that the
approaching national negotiations between UE and General
Electric will take place in the context of yet another
record financial performance by the company. That has been
the case every year in recent and not so recent memory.
But even by GE’s lofty standards, the 1990’s were a
decade of unparalleled prosperity for the company.
GE’s net profits of $10.7 Billion last
year represent a staggering 272% increase over its results
of just a decade ago. GE is now making a clear profit of
over $1.2 Million an hour, 24 hours a day, 365 days a
year. And unbelievably, GE is openly predicting that even
more treasure will be coming its way in the years to come.
As for the "competition", the UE
has stated for many years that GE’s professed concerns
on that score have little or no basis in reality. GE
continues to overwhelm any real or perceived competition
in every measure of economic performance including
employee productivity. Net profits per employee have more
than doubled in the last ten years.
The company itself is now belatedly
acknowledging the facts of the matter. GE CEO Jack Welch
recently stated that "we can’t compare ourselves in
any way with our traditional competitors."
It is truly the best of times for the
company. GE stockholders who saw the value of their shares
increase by over 50% in 1999, are set to approve the
company’s fifth stock split in the last 17 years. GE
executives have seen their compensation zoom. And several
thousand GE managers now receive stock options worth
billions of dollars in aggregate.
A casual observer of the scene might
conclude that in light of the company’s robust economic
health, GE workers must be more secure in their jobs than
ever while enjoying a rising standard of living. But in a
company that calls itself "boundaryless", the
chasm separating their fortunes from those of GE has never
Despite their remarkable level of
productivity, GE workers continue to be battered by
outsourcing, work transfers, shutdowns, and various forms
of speedup. The company’s ongoing acquisition binge,
totaling hundreds of companies for which it paid an
astounding total of over $50 billion in the last three
years alone, has made the precarious situation of GE
workers even worse.
To cite one recent example, the highly
skilled workers at GE’s Ontario, CA aircraft engine
maintenance facility are in the process of losing about
125 jobs as GE transfers their work to company facilities
in Brazil and Scotland. Having gone on a shopping spree of
acquisitions, GE complains about "overcapacity",
even as it urges its managers to "step up our global
It is clear that GE workers do not need to
hear more platitudes about "earning" job
security in the marketplace. What is needed are concrete
improvements in the job and income security provisions of
the Contract, including limitations on outsourcing. Also
needed is relief from the constant demands for ever more
production in the form of additional paid time off.
For those fortunate enough to remain
employed, the past three years have not resulted in any
appreciable rise in purchasing power. GE workers did
realize a very modest real wage increase, averaging less
than 2% annually before taxes, due primarily to relatively
low levels of inflation. Nevertheless they are not content
merely to tread water while producing on average over
$15.00 an hour in clear profits for GE.
Moreover, the protection afforded by the
existing cost of living (COLA) provision in the Contract
has diminished to the point where it affords GE workers
less than half of what is needed to protect themselves
fully against the effects of inflation.
The situation confronting many of those in
GE who are retired, or who hope to retire anytime soon, is
nothing short of appalling. It has become increasingly
clear that the pension plan, and more specifically the
mammoth $50 Billion GE pension fund, is viewed by the
Company not as an employee benefit, but rather as a
lucrative GE business.
In 1999 alone, the level of overfunding in
the pension fund increased by over 50% to nearly $25
billion, or fully twice as much as is needed to fund all
present and future obligations. To add insult to injury,
accounting rules have allowed GE to add $2.7 billion in
pension "profits" to its balance sheets over the
past three years.
Nevertheless, the typical GE hourly worker
now stands to retire on a basic pension in the vicinity of
only $1,000 a month excluding supplements. Many will get
considerably less. GE workers will not be satisfied this
time with the same modest increases that have been come
out of the negotiations in recent years.
Meanwhile, GE retirees have now gone over
three years, and in some cases nearly six years, without a
pension increase. The last adjustment in November of 1996,
did not make up for past losses due to inflation, and with
each passing month the purchasing power of GE retirees is
declining further. Nevertheless, GE has up to now turned a
deaf ear to the appeals of the Union and of retirees for
an increase. Accordingly, GE retirees will be out in force
during the second week of April to demonstrate for pension
increases at a number of GE locations.
The issue of health care looms as one of
the most difficult and contentious in the upcoming
bargaining. GE has made it clear that it wants to impose
another round of cost shifting from itself to its
employees. This is despite the fact that GE’s aggregate
health care costs have declined by about 20% over the last
seven years. GE workers on the other hand are growing
increasingly fed up with the idea that those least able to
pay should shoulder ever more of the burden.
The average GE worker with dependents is
now paying about $700 a year in contributions alone for
Health Care Preferred (HCP), GE’s "managed
care" insurance plan. For those with dependents in
the traditional Comprehensive Medical Benefits (CMB) plan,
the tab runs to over $900 annually. Various co-pays add
substantially to this total. GE cost shifting needs to be
arrested and reversed.
In addition, with nearly 80% of GE workers
now enrolled in the HCP "option", it is
unconscionable that the terms of the plan remain less than
fully bargained and subject to annual reopening by GE. The
UE as well remains committed to maintaining and
strengthening CMB as a viable option for those who want a
completely free choice of doctors and other medical
Thus our collective bargaining demands to
General Electric arising out of our needs are as follows:
1. Our Union demands substantial wage and
salary increases to improve our living standards and to
make up for past losses due to inflation. To insure that
our general wage increases are not eroded or wiped out
altogether, we will propose an improved formula in our
cost-of-living provision which will provide us with full
protection against inflation, and which will run for the
entire term of the contract. We remain opposed to any lump
sum payments in lieu of structural wage increases, and
furthermore call for the elimination of extended
progression schedules and substandard night shift
differential applicable to new hires.
2. UE shall seek substantial increases in
basic pension benefits as well as in early retirement
supplements. Supplements must be enhanced so as to be
integrated with the new phased-in raising of the age to
qualify for full or partial Social Security benefits. We
will moreover seek to lower the age and eligibility
requirements for early retirement with unreduced pensions;
to improve benefits for disability retirees; and to do
away with mandatory employee contributions into the
bloated GE pension fund.
The UE will again demand that GE end its
morally indefensible refusal to bargain for retirees.
Retirees’ pensions must be substantially increased, with
an additional raise in the minimum multiplier. To protect
those most vulnerable to inflation, we will propose that
ongoing cost of living protection be built into the
pension plan for past and future retirees.
3. In view of GE’s ongoing assault on
our jobs, UE will propose restrictions on GE’s ability
to subcontract or otherwise transfer our work, as well as
to improve benefits for workers affected by job loss for
any reason. The Union will also propose that the
replacement feature of the existing Special Early
Retirement Option be broadened to include qualified new
hires as potential replacements for retiring employees.
4. Our Union will strongly resist GE’s
attempts to impose more cost shifting on employees for
medical insurance. Rather we will propose that current
levels of contributions, co-pays, and deductibles be
reduced. We will moreover seek a variety of improvements
in our medical, dental, vision, and disability coverages.
HCP must be fully negotiable on the same basis as any
other benefit plan. In addition, we will propose
improvements in the Medical Care Plan for Pensioners, the
addition of dental and vision coverage for retirees, and
the full negotiability of the new Medicare Plus option.
5. GE workers have now gone nearly 30
years without any improvement in the inadequate S&P
day schedule for hourly employees, and 17 years without a
single vacation schedule improvement. And despite winning
Martin Luther King’s birthday in the last contract, some
14 years after it had become a recognized federal holiday,
we continue to lag in our number of paid holidays.
Accordingly, we will propose additional time off in all of
No company in the entire world is in a
better position to meet the just demands of its workers
than is GE in the year 2000. Yet we know from long
experience that GE will offer determined resistance, and
that the negotiations will undoubtedly be difficult.
As always, our strength lies in the UE
membership. We will be successful only to the extent that
our membership, together with the members of all CBC
unions, are fully mobilized in support of our demands. If
we accomplish this vital task, GE workers will make
significant gains in negotiations this year.