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UE-GE National Contract Negotiations

Statement of the UE-GE
Conference Board
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 been wider.

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 sourcing effort".

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 providers.

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 these areas.

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.

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