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UE-GE National Contract Negotiations



Week of 6.19:
Saturday, 6.24
Friday, 6.23
Thursday, 6.22
Wednesday, 6.21
Tuesday, 6.20
Monday, 6.19

Large Table:
Thursday, 6.15
Wednesday, 6.14
Tuesday, 6.13
Thursday, 6.8
Wednesday, 6.7
Tuesday, 6.6
Thursday, 6.1
Wednesday, 5.31
Tuesday, 5.30
UE's Opening Statement
(full text)

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UE has represented thousands of General Electric employees under a UE-GE national contract since 1938.

We are one of only two unions holding a national agreement with GE.

There are 14 unions with GE members which have joined together in the Coordinated Bargaining Committee (CBC) of GE unions.

UE-GE Contract 2000 Archives page ...

Tuesday, May 30th


United Electrical, Radio and
Machine Workers of America (UE)
On the opening of National Negotiations
with the General Electric Company

May 30, 2000

Three years ago, at the opening of national negotiations between UE and General Electric, we took note of GE Chairman Jack Welch’s description of the Company as "a $7.3 billion net income machine", following its then record profit year of 1996.

The magnitude of GE’s burgeoning fortunes since that time is nothing short of astounding, and has made 1996’s results look small by comparison. Not only has the machine cranked out another three years of double digit profit increases culminating in last year’s $10.7 billion, but the Company now says that with order rates running some 20% ahead of 1999 levels, GE has "unusually strong momentum" for this year as well.

Moreover, GE continues to overwhelm any real or perceived competition. The Company is now in the enviable position of controlling and largely dictating the terms in many of the markets it is in. Increasingly, GE simply buys its way into market dominance. The Company’s $50 billion binge of acquisitions, amounting to well over two per week over the past three years, is testimony to the growing irrelevance of GE’s alleged competitors.

As Mr. Welch recently noted, "...we can’t compare ourselves in any way to our traditional competitors." Rather than facing the "brutal competition" so often invoked by company negotiators, GE realistically faces only the ghost of competition past.

In this context, it is small wonder that Mr. Welch told his top managers earlier this year that it is a time for "irrational exuberance", as he urged them to "celebrate results". GE stockholders indeed have had plenty to celebrate. Not only have they enjoyed twenty-four consecutive years of dividend increases, but the zooming price of GE shares was reflected in the recent unprecedented 3-for-1 stock split.

Mr. Welch certainly understated the case when he conceded that the Company can afford a "fair and generous" contract settlement. However, our members have a well founded skepticism as to whether the company’s idea of generosity will meet their expectations. After all, GE workers are the world’s best and most productive. Last year alone they produced on average over $31,000 apiece in net profits for the Company. They have earned their just reward and then some.

Having been involved in national bargaining with General Electric for more than 62 years, we in the UE are under no illusions that GE is prepared to reward our members to a degree that would remotely reflect their true contributions to the Company’s financial success. But, while we doubt that we will ever have cause to celebrate or to be exuberant in the manner of GE managers and stockholders, we nevertheless believe that with hard work we can negotiate an agreement that is acceptable to our GE membership.

Our members have sent us to these negotiations equipped with proposals covering a variety of topics. And while it will come as no surprise that we will emphasize such issues as pensions, job and income security, and health insurance, it would be a mistake for the Company to conclude that these are our only areas of concern. To succeed we must negotiate a well balanced tentative agreement for our members’ consideration, an agreement that addresses a range of issues.

Certainly the issue of pensions is of great importance. It provides perhaps the most glaring example of the Company’s insatiable lust for wealth. In 1999 alone, the assets of the gargantuan Pension Trust increased by over $7 billion to a total of over $50 billion. The pension surplus increased by some 55%, to a point where the Trust now contains about twice as much as is needed to fund all present and future obligations.

We know of no other company that approaches this level of overfunding. Yet, the very size and soundness of the Trust has in some ways become its own liability to Plan participants. The GE Pension Fund, which exists solely to benefit Plan participants, has become a profit center used to attract shareholders and to bolster GE’s stock price. Accounting rules have allowed the Company to add $2.7 Billion in windfall pension "profits" to its balance sheet in just the last three years. More ominously, this provides 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. A substantial career earnings update is due as well. Moreover, continued employee contributions are not only unnecessary, they ought to be an embarrassment to a company which has contributed nothing to the Fund since 1987 and likely never will again.

The UE will also propose a lowering of the early retirement age and modifications of the Plan to protect our members against the phased in raising of the age to collect both full and reduced Social Security benefits.

With respect to retirees, we acknowledge that the recent pension increase was a welcome and badly needed step in the right direction. Nevertheless, it falls well short of the amount many retirees need for a secure retirement. Considering the bulging Pension Trust, it is time for GE to accept the concept of ongoing pension COLA for retirees.

On the subject of wages, we note 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 Contract’s term. Even these small gains are attributable primarily to lower than expected levels of inflation.

There is no doubt in my mind what CEO Welch would do with a business segment that produced such a modest rate of return considering the investment required and the energy expended. Having accomplished the job of making GE the country’s most profitable company, it’s high time GE workers are rewarded accordingly.

We place a high priority on negotiating an improvement in our cost-of-living formula. The present formula now replaces slightly over 40% of our wage losses due to inflation, a level of protection that is little more than half what it was twenty years ago.

When it comes to job security, beware the false prophets. GE has for years been using the psychology that if something is repeated long enough, people will accept it as true. While there may be in a few cases some validity to the proposition that job security is "earned" in the marketplace, GE workers know from bitter experience that the marketplace is only one part of the equation.

GE continues to shut down profitable plants, divest itself of profitable businesses, and move profitable product lines if they don’t measure up to the Company’s ever higher profit hurdles. Even being number one in your business is no guarantee that GE will not contract out your job or move it to Mexico, China, Malaysia or elsewhere. The examples are legion and we will not bother to list them. GE’s sorry record over the past two decades speaks for itself.

UE will thus propose a number of measures to improve the Contract’s job and income security provisions. We will continue to place a high priority on restricting GE’s ability to move our work, as well as to put real meaning into the decision bargaining process, a process which all too often amounts to little more than a bargaining charade.

We are not however interested in any local concessions to the terms of our National Agreement, if in fact that is what the Company’s chief negotiator, Mr. Rocheleau, meant when he referred to "another way of viewing job security" in his recent interview.

On the income security front, the UE will seek to substantially improve benefits for employees affected by job loss. That must include SERO and the SERO 30 provisions negotiated in 1997, at least until such time as the Company changes its position on voluntary early retirement before age 60.

We will also renew our demands for more paid time off, in particular in the forms of an additional holiday, an improved vacation schedule, and more Sick and Personal leave days, an area which has remained unimproved for over a quarter of a century.

Health insurance continues to be an area of contentious debate between the Union and the Company, and a great concern of our members. Despite a 20% aggregate decline in basic medical costs since 1992, GE is apparently gearing up for another round of medical cost shifting to employees. This despite the fact that the average GE worker with dependents is now paying about $700 annually in contributions alone for Health Care Preferred (HCP) and about $900 for Comprehensive Medical Benefits (CMB), including past COLA diversions. Numerous co-pays add substantially to the bill.

Our position is that GE’s cost shifting not only has to be arrested, it must be reversed. In addition, we will propose a number of improvements in our medical, dental, and disability coverages, as well as improvements to the Medical Care Plan for Pensioners.

With about 80% of GE employees enrolled in HCP, it is imperative that it be made fully negotiable on the same basis as any other benefit plan. The Company’s recent proposal that HCP contributions be "determined annually by the company" is totally unacceptable.

Indeed it would seem that some within the Company would like to see us return to the level of cost sharing that existed in the insurance plan during the heyday of Boulwarism in 1955. Rest assured that the UE has no desire to return to 1955 either in terms of our insurance plans, or in terms of the length of the Contract that GE imposed at that time.

In addition to the issues noted above, UE will propose a number of changes in our existing contract language.

As I noted previously, UE and GE have a negotiating history dating back 62 years. Our Union has entered into every set of negotiations since 1938 with a sincere desire to reach an equitable agreement. The new century notwithstanding, our approach is unchanged. 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.

I have every confidence an agreement can be reached if we negotiate a contract by June 25 which fairly and generously goes a substantial way in meeting our members’ desires and expectations. If we can accomplish that task, they too will have reason to celebrate in the year 2000.

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