The UE negotiating committee put a number of proposals on paid
time off to the company as negotiations got underway Wednesday
morning. GE workers have seen few tangible improvements in paid time
off, in areas ranging from Sick and Personal Days to military leave
to vacations, the UE committee said.
In the final hours of the 1997 negotiations the company
reluctantly agreed to Martin Luther King Day, pointed out Stephen
Tormey, secretary of the UE-GE Conference Board. This was the first
paid holiday negotiated in 25 years. "We don’t intend to wait
another 25 years for another advance," he said.
Improvements in paid S&P days would be an obvious place to
expand time off, the UE committee suggested. There have been no changes
made to the S&P program since the 1973 negotiations; in those 27
years work pressures have intensified. Although the company calls
itself "boundaryless" there is a rigid boundary in place
between hourly and salaried employees with regard to the S&P
plan, UE negotiators observed. "It no longer makes sense to
have two different plans," Tormey said. He pointed to a Bureau
of Labor Statistics survey published in 1999 that reveals that 89%
of medium and large private establishments offer more sick leave
than GE in the first 10 years of employment. GE grants only two
days; 80% of the firms surveyed allow more than five days.
In response, GE spokesperson John Curtin described the S&P
benefit as "as a good plan" that is used to fullest
More than two thirds of the Niles GE workforce is on continuous
schedule, said Bill Callahan, Local 751. On their grueling schedule,
workers find even "simple things," like going to church,
hard to do. They need relief, he said. GE’s Curtin noted that
there are provisions in agreement that allow workers to use vacation
time. Callahan countered by pointing out how mandatory vacation
shutdowns limit the use of vacation time. Tormey observed that it
defeats the point of having vacations "to parcel out what days
there are for important family business." The solution, he
said, is GE to give hourly workers the same S&P plan now enjoyed
by salaried workers.
Tormey suggested that the company’s opposition to any
improvement in paid time off is due to the dramatic intensification
of work. Expansion of the S&P plan would be a cost factor,
objected Curtin. Tormey pointed out that according to the company’s
data, sick leave costs associated with hourly employees declined
from $28.7 million in 1989 to $20.1 million in 1999, when it
represented only 0.7% of straight-time wages. The shrinking of the
GE workforce and greater intensification of labor has taken place
without any improvement in S&P days.
The UE committee proposed that the S&P plan not be linked to
seniority. Pat Rafferty, Local 506, Nita Gonzalez, Local 1010, and
Ted Bradley, Local 1010, gave examples of how lower-service workers
have need for sick and personal days, too. "Most of the younger
workers have young children," Bradley pointed out. Bradley,
Callahan and Bob Brown, Local 332, rejected insinuations that the
S&P plan is abused. UE President John Hovis argued that the
company fails to recognize the human costs associated with the
tremendous gains in productivity and profits GE has realized between
1970, when S&P was first negotiated, and today. "The stress
in the shops is almost like a boiler ready to explode," he
Joyce Sumner, Local 332, pointed out that bigger medical expenses
later would not be incurred if workers could stay home to treat
their illnesses. Further, she said, it creates unsafe conditions to
have workers on the job while sick.
As a representative of non-exempt salaried workers, Betsy Potter,
Local 618, endorsed the extension of the salaried S&P plan to
hourly workers. Having 25 S&P days, as opposed to three-to-five,
doesn’t give salaried workers any less incentive to come to work.
"There has not been one disciplinary problem for attendance
(among the Erie salaried workers)," Potter said. "Our work
ethic is no different than that of hourly workers."
The UE committee also called on the company to pay out any
accumulated S&P days at the employee’s option upon layoff.
While GE’s record on vacations is not as bad as that on
sickness and personal days, it also needs improvement, commented
Tormey in introducing the union’s vacation demands. The last
improvement occurred in 1982. A BLS survey of large and medium
private employers reveals that a majority provide more time off than
GE to those with one and five years’ service.
UE is calling for an improved vacation schedule to provide 2
weeks for 1 year; 3 weeks for 5 years; 4 weeks for 10 years; 5 weeks
for 15 years; 6 weeks for 25 years; 7 weeks for 30 years.
Tormey commented that the cost of vacations to the company has
risen only slightly over 10 years, from $245 million in 1989 to $248
million in 1999. That kind of money is insignificant to a company
the size of GE, he said.
"This is a rich proposal," said GE’s Curtin. "It’s
a rich company," retorted Tormey. The company spokesperson said
that the present vacation plan is "a good plan and it’s
served us well." He added that the company has no problem in
The union proposed that employees who break service be paid a
prorated vacation applicable to the next calendar year. Ted Bradley,
Local 1010, pointed out that the contract acts as a bar on a
California state law mandating prorated vacation pay. During massive
layoffs at the Ontario plant, salaried workers received prorated
vacation pay but not union members.
The company spokesperson said GE is not interested in prorating
vacations. "It’s ironic," countered President Hovis.
Under Welch’s leadership, GE talks about "stretching"
and "finding new and better ways" — except when it comes
to employees and employee benefits. John Curtin promised the company
"will stretch and change in these negotiations."
The UE committee proposed other changes to the language in
Article VIII, which covers vacations. If compensable time off should
occur during an employee’s vacation, the vacation should be
extended. The union said the vacation shutdown should be limited to
a maximum of two weeks and that the split shutdown be eliminated. UE
members expressed their anger at the way GE abuses the vacation
shutdown. A two-week shutdown around Christmas and a one-week
shutdown in the summer does not give Ft. Edward workers much
flexibility in planning summer vacations, protested Bob Brown, Local
332. John Hovis observed that the union "didn’t like this in
'94 and we still don’t like it."
The split shutdown provides some businesses with relief, averred
John Curtin. But, Tormey said, the shutdown contradicts the company’s
argument that it needs flexibility in responding to customer needs.
Joyce Sumner and Bill Callahan were adamant that workers have earned
their vacations and should be given some flexibility in planning
their use of vacation time.
As another change to Article VIII, the union called for
elimination of the antiquated one-month-return-to-work requirement
in Section 2. Callahan and Rafferty described how this provision is
unfair and unnecessary. The UE committee also asked that credit
hours lost on temporary layoffs as time worked for the purpose of
determining the hourly multiplier. This is a particular problem for
incentive workers, noted Rafterty.
GE is not globally "competitive" with regard to paid
time off, Tormey said. UE’s proposals are modest compared to what’s
on the law books abroad. He cited the numerous countries where, by
law, workers receive more vacation and holidays than GE offers in
the U.S. GE has no trouble in adapting to the practices of these
countries, he said. Americans, who have been working longer hours,
on average work longer than workers anywhere else in the world. GE
contributes to this trend, preferring to work its employees longer
hours rather than hire, Tormey argued.
The UE committee proposed an additional paid holiday. The
achievement of Martin Luther King Day in the 1997 negotiations was
long overdue, payment of interest on a debt, union members said.
Tormey noted that GE and UE were pioneers in paid holidays, with the
negotiation of the first six paid holidays in 1946. Between 1946 and
1973 GE agreed to four more. The company is no longer a leader in
this area, and is not globally competitive, or very domestically
The union called amendment of Article IX, changing the two weeks
to four weeks to provide workers with more of a cushion should they
be absent. There are few enough holidays as it is without workers
being denied a paid holiday because of technicalities, UE members
Turning to military pay differential, the UE committee said the
differential should be paid for up to 20 days per year and for up to
two weekend training periods. Also, the appropriate differential
should be paid at the time of military leave. Rafferty of Local 506
explained how there have been problems with how the company has
handled this issue.
Looking at Article XXIV, the union said the company should
provide a guarantee of 8 hours’ payment of jury duty differential
regardless of shift and include all governmental administrative
proceedings such as NLRB hearings on the same basis. On the first
point, David Adams, Local 506, pointed out the arbitrariness and
unreasonableness of supervisors on this issue. Pat Rafferty insisted
there be greater recognition of the demands on workers.
"This contract should reflect improvements in areas that
have not been addressed," commented President Hovis.
"There are numerous issues like this that are of little
consequence to the company but are of significance to the members,
who want to see longstanding problems resolved."
In the final proposal on paid time off, the union proposed that
employees be given five days’ leave for the death of all covered
In the afternoon session, UE Research Director Lisa Frank
reviewed GE’s contributions to the industrial and market
revolutions, and the corporation’s continuing labor-fueled
success. "The case seems to be very clear," she said, that
GE has the capacity for a settlement that could improve workers’
living standards. In 1964, GE Chairman F. J. Borch said: "Our
work is to create the fuller life for all people by raising their
standard of living." That work remains unmet.
Frank examined the company as seen by Wall Street, corporate
headquarters and Main Street.
The "View from Wall Street" revealed a company on the
receiving end of accolades from the business press, leading the nation’s
business in a number of categories — revenues, cash flow from
operating activities, growth in net worth and net earnings. In
newspaper ads placed in 1972, GE proclaimed that the days of the
robber barons were over, when companies would expect a 20%
return on investment. GE has since crossed over into "robber
baron" territory, said Frank, drawing the parties’ attention
to slides showing the company’s operating margin, return on equity
and return on investment.
The company and pundits claim that GE profits are the result of
GE Capital and other service businesses. But Frank noted that
manufactured goods produced by union members in the "Good Old
Old Economy" continue to enjoy a brisk rate of growth with
double-digit earnings in a number of businesses. In fact, the
manufacturing profit rate shows a definite improvement on the
"robber baron" rate, Frank pointed out. GE
profits-per-worker, when GE Capital is taken out of the equation are
"spectacularly impressive" at $53,000 in 1999, she said.
As a company that has paid a dividend every quarter since 1899,
GE continues to be the "bluest of the blue chips," Frank
said. And GE performs better than most. GE surpassed $500 billion
market capitalization this year; holding its own against tech stocks
at a time when many stocks decreased in value.
Whether measured by stock prices, dividends, operating margin,
net income or revenues, GE is the most powerful corporation in the
world, Frank said.
And the company looks good to its management. While J.P. Morgan,
a GE founder, said in 1892 that "No manager should be
compensated at a rate higher than 25 times higher the worker,"
current GE leaders have a different philosophy. Today there is a
fast-growing gap between the average workers’ wage and top
management’s salary that’s already far beyond Morgan’s
formula. Where it would have taken a GE worker 174 years to earn
just Welch’s salary and bonus in 1996, it would now take more than
The "View from Main Street" is different. The company
used to claim that a business that makes a profit prospers and grows
and creates more secure jobs. The reality is much different. There
is a growing gap between revenue produced by workers and the
compensation they receive. The rate of profit is rising faster than
wages. The "Sweat Index" — after-tax earnings divided by
compensation has doubled, with GE getting 46 cents back for every
dollar it spends on wages and benefits. Are jobs secure? Frank’s
graphs revealed an inverse relationship between jobs and revenue —
which translates to constant pressure, speedup, and fear of
contracting out and plant closings.
GE workers’ wages have stagnated, coming close but not reaching
a real-wage ceiling of $12 throughout the 1990s. This is due to a
flawed COLA and the meagerness of wage hikes in first place —
without taking into consideration insurance cost sharing, Frank
said. The average GE wage continues to be below what the BLS says is
necessary for a moderate standard of living. Labor’s share of each
revenue dollar is falling, even though GE is adding jobs since 1996; in
1990 it was 18%, in 1999 only 8%.
Where did the the money go? Acquisitions, interest, dividends,
total compensation., stock repurchases and restructuring, Frank
Company officials repeatedly claim that GE cannot
offer more generous contracts because of the competition. But there
is not a competitor worthy of the name, the UE research director
said, suggesting that GE has constantly reiterated the
"competition" line to disarm workers. She showed a series
of charts that repeatedly demonstrated GE’s dominance, and the
growing gap between GE and its closest possible competitors in a
number of crucial categories.
"Competitors" like Whirlpool and Emerson
enjoy only a fraction of GE’s net earnings. GE leads various
possible competitors (like Motorola and Raytheon) in
revenue-per-worker. GE far outstrips the pack in productivity, as
measured by net earnings per worker. GE outdistances foreign and
domestic "competition" in revenues. GE leaves foreign
competitors behind in net earnings as percent of sales and net
income per worker, a category in which none of the
"competition" (Rolls-Royce, Philips, Alcatel, Electrolux,
Siemens and others) even come close.
In response, the company spokesperson agreed that "GE is one of
the best if not the best run companies." He said the company
doesn’t claim it is poor, makes improvements in employee
compensation. The problem, said UE’s Hovis, is that GE has set
unreasonable limits on those improvements. "We want to see the
company do better for our members," Hovis stated.
The UE Committee called for a substantial general wage increase
Tormey disputed the company’s contention that there were
"significant improvements" in wages in recent contracts.
"The only reason we realized any wage gain at all (in the
1997-2000 agreement) was relatively low inflation." A slightly
higher rate of inflation would have wiped out the wage gains in the 1994
agreement while, in real terms, GE workers suffered a wage cut under
the 1988-91 contract. Following the most productive decade in the
company’s history, GE workers have seen their wages stagnate,
Tormey said. Employed by the most successful and profitable company
on the planet, GE workers should be able to provide their families
with a reasonable standard of living on a 40-hour work week.
"The reality is that, by and large, they can’t," Tormey
Predictably, GE’s Curtin defended the company’s wage and
benefit package as "a very good one" and warned of
"competitors." But UE negotiating committee members had a
message for him.
"My membership made it clear to me, they don’t want it
all. They want a fair and reasonable [wage], they want their share, to
improve their living standards," declared Bill Callahan.
"There’s money there, they know it’s there, they’re
looking for it in this contract."
"Our members are tired of hearing about domestic
competitors, foreign competitors, the people down the road willing
to take our jobs," said Pat Rafferty. "They’re tired of
management by stress. They want the fair share they deserve."
Many Local 506 members are stockholders, he said; they read the
financial reports and know how big GE’s profits are.
UE members disputed the company’s assertion that their wages
and Chairman Welch’s salary are equally determined by "the
Betsy Potter took aim at the huge disparity between the rate
structure of the largely female non-exempt salaried workforce and
hourly wage rates. The UE committee joined in, arguing that there
should not be any rates below common labor anywhere in the chain.
Tormey and Hovis recalled GE’s shameful history of gender
discrimination in wages. Joyce Sumner commented on the
responsibility and skills of salaried workers who perform billing,
shipping and other crucial operations.
The UE committee called for an improved cost-of-living formula to
provide penny-for-penny protection against price increases and COLA
coverage for the entire term of the contract.
Tormey reviewed the history of bargaining on the COLA clause,
demonstrating that from a high of 74% replacement value in 1979, the
recovery rate has steadily declined since. As of April 2000 the COLA
replaced only 42% of pay lost to inflation. Tormey emphasized that
"this is a very important issue" in these negotiations.
The union called on GE to eliminate extended progression and
substandard shift premium imposed on new hires. Callahan described
to the company the dissatisfaction felt by new hires once on the job
and they realize how they are working for lower wages than
co-workers. Brown dismissed the notion that GE wouldn’t hire new
employees if they had to be paid the full rates.
Betsy Potter articulated the UE demand for automatic progression
to all salaried grades. Pat Rafferty gave detailed explanations of
UE demands on behalf of incentive workers. The union proposes that
raises and a substantial portion of the existing adder be applied to
piecework base rates; "AER" be eliminated and replaced
with "average earnings;" which should be paid whenever an
employee is taken off his or her regular assignment; there should be
a month’s notice of any decrease in standard prices.
Negotiations recessed until Thursday morning, when a company
presentation on insurance is expected to take place.