National negotiations opened this afternoon between
UE and General Electric in the Sheraton Hotel in New York with an
exchange of statements indicating a wide difference in perspective
on the company’s wealth and workers’ needs.
Speaking on behalf of the union, General President
John Hovis emphasized that GE can well afford the generous contract
improvements workers have earned.
Since the last set of national negotiations, Hovis
noted, the GE income machine cranked out another three years of
double-digit profits, culminating in last year’s 10.7 billion
profit — and the company itself says there is "unusually
strong momentum" for this year.
"GE continues to overwhelm any real or
perceived competition," Hovis said; GE controls and largely
dictates the terms of most of the markets it’s in. Over the past
three years GE has spent $50 billion on acquisitions, more than two
per week. Even GE Chairman Jack Welch says the company can’t
compare itself "in any way" to the company’s traditional
competitors. Instead of the "brutal competition" usually
cited by company negotiators, GE "realistically faces only the
ghost of competition past," Hovis said.
GE management and stockholders have had plenty to
celebrate with the company’s success. The GE Chairman himself said
the company could afford a "fair and generous" contract
settlement. But UE members "have a well-founded skepticism as
to whether the company’s idea of generosity will meet their
expectations," the union president said. Last year alone, GE
workers produced more than $31,000 apiece in net profits. "They
have earned their just reward and then some," Hovis declared.
The UE negotiating committee has been sent by the
membership to achieve a well-balanced agreement addressing a range
of issues, the union president observed. The pensions plan is one
issue of many although of great importance — and "provides
perhaps the most glaring example of the company’s insatiable lust
for wealth," Hovis said. The pension trust now stands at more
than $50 billion, containing about twice as much as needed to fund
all present and future obligations.
Although the GE Pension Fund exists only to benefit
plan participants, Hovis said, the company views it as "a
profit center" "to attract shareholders and bolster GE’s
stock price" — a practice providing the company with a
disincentive to use the surplus to increase benefits.
"There is simply no justification for anything
other than very substantial increases in both the career and
guaranteed minimum formulas," along with "a substantial
career earnings update," Hovis said. Employee contributions to
the pension plan are unnecessary and should be embarrassing to GE;
the company has contributed nothing to the fund since 1987. UE will
propose a lowering of the early retirement age. Acknowledging that
the recent pension increase "was a welcome and badly needed
step in the right direction," Hovis said the union will press
for a pension COLA for retirees.
Turning to wages, Hovis commented that "GE’s
profit bonanza has not resulted in any significant improvement in
the living standards of GE workers. Our GE members realized on
average a very modest increase in real wages of about 1.7% per
year" during the present contract — gains due primarily to
lower than expected levels of inflation. Hovis declared,
"Having accomplished the job of making GE the country’s most
profitable company, it’s high time GE workers are rewarded
The union places "a high priority" on
improving the cost-of-living formula, Hovis told company
negotiators; the present formula replaces slightly more than 40% of
wages lost to inflation.
GE has long claimed that job security is
"earned" in the marketplace, but "GE workers know
from bitter experience that the marketplace is only one part of the
equation," Hovis said. GE continues to shut down profitable
plants and move profitable product lines. For that reason, the union
will make a number of job security proposals. "We will continue
to place a high priority on restricting GE’s ability to move our
work, as well as put real meaning into the decision-bargaining
process," he said. And UE is not interested in concessions on
the local level which the company’s chief negotiator referred to
in talking about "another way of viewing job security."
UE will seek to substantially improve benefits for
employees affected by job loss, especially SERO options. And, Hovis
said, UE will renew demands for more paid time off, including an
additional holiday, an improved vacation schedule, and more sick and
personal leave days.
The UE president acknowledged that health insurance
continues to be an area of sharp disagreement between the parties.
GE’s aggregate medical costs have gone down by 20% since 1992, and
the average GE worker with dependents is making substantial
contributions, but still the company is "apparently gearing up
for another round of medical cost shifting to employees." GE’s
cost shifting must be halted and reversed, Hovis stressed. With 80%
of GE employees enrolled, Health Care Preferred must be fully
negotiable, he insisted.
Throughout UE’s 62 years of bargaining with GE,
the union has approached negotiations with "a sincere desire to
reach an equitable settlement," Hovis said. That hasn’t
changed in this new century. "While we know these negotiations
will be difficult, we fully expect the company to recognize the
contributions made by our members in a meaningful way," he
said. A fair and generous settlement that substantially meets UE
members’ desires and expectations will give them, too, reason to
celebrate in the year 2000, the union leader concluded.
In making opening remarks for the company in his
first time negotiating with UE, GE spokesperson John Curtin
emphasized the company’s intention to reach a settlement that will
allow the company to be flexible and respond to competition.
In a new business environment "light on bricks
and mortar and heavy on computer servers and internet sites,"
GE continues to do well because of its "flexibility" in
responding to opportunities, Curtin said.
"In these discussions we need to stay focused
on the businesses GE is in and the competitors we face in the
marketplace," proposed the company spokesperson. Curtin
suggested that GE production employees "have done well"
with regard to wages, another area where he said the company must be
aware of competitive pressures.
Describing GE’s record of progress in health
insurance as "commendable," Curtin seemed to lay the basis
for proposing additional cost shifting to employees by stressing the
increased costs paid by GE for medical services and emphasizing the
need for the company to be "flexible and creative."
With regard to job security, he rejected proposals
that would require GE to "guarantee the future by making
commitments to maintain employment levels or plant operations. That
is a recipe for disaster in today’s rapidly changing world."
While the company spokesperson offered no proposals for enhanced job
security, he hailed GE’s "solid record of success in
outplacement programs when we have had layoffs." Curtin pointed
out that the company’s costs on the window feature of the SERO
program greatly exceeded estimates, and called for "a
resolution that will meet real employee needs without damaging the
competitive ability of our businesses."
Curtin hailed the GE pension plan as providing
retirees with "the resources to live comfortably." The
company will be looking at pension benefit improvements, but
"we need to recognize there are limits."
GE would like to conclude these negotiations with a
contract that’s five or more years in duration, the company
spokesperson said. Curtin’s statement clashed with the declaration
of John Hovis earlier that "UE has no desire to return to
1955," when the company demanded a long-term settlement.
The parties concluded the session by reviewing the
schedule for the next several days of talks.