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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.

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Wednesday, May 31st

Paid Time Off;
Wages Discussed

On this page:

Wednesday Morning

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 extent."

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 said.

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 attracting employees.

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 competitive, either.

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 argued.

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 relatives.

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Wednesday Afternoon

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 317 years.

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 explained.

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 each year.

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 said.

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 marketplace."

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.

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