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GE Contract Ratified


2003 UE-GE National Negotiations

Opening day of negotiations

Above: Opening day of negotiations. From left, Bob Roberts (IBEW), Wayne Reynolds (UAW), Steve Tormey, Dave Dennison, Pat Rafferty (behind Deannison), Pres. John Hovis, Frank Fusco, Lisa Frank, Lynda Leech, Chris Townsend, Ed Baran, Mike Barrow (American Flint Glass Workers), and Bob Brown.

Local 332 members outside their plant gate in Ft. Edward, NY ...

At the table on opening day ...
Above, right, at the table on opening day ( (from right) Bob Brown, Local 332; Frank Fusco and Pat Rafferty, Local 506; Steve Tormey; Pres. John Hovis; Lynda Leech, (Local 618; behind Hovis); Ed Baran, Local 751; and Mike Barrow, AFGW. The UE-GE negotiators were backed by coast-to coast support. At right, Local 1010 members picket in Ontario, Calif.; Local 332 members outside their plant gate in Ft. Edward, NY (above, left). Local 1010 members picket in Ontario, Calif.

By a substantial majority, UE members employed by General Electric ratified a new national agreement in coast-to-coast, local-by-local voting during the last week in June.

Both the UE negotiating committee and UE-GE Conference Board had unanimously recommended acceptance of the four-year agreement, which includes substantial gains in GE workers’ wages, pensions, medical coverage, and job and income security provisions, among other improvements.

Negotiations began May 20 under difficult circumstances. Less than six months earlier, UE and other union members struck GE for two days to protest the company’s mid-term medical insurance cost-shifting. The company gave every indication of demanding more cost-shifting in bargaining for a new agreement.

Changes in the coordinated bargaining process also complicated the 2003 negotiations.

UE is one of two unions holding a national agreement with GE. Since 1973, top UE and other union negotiators (affiliated with the Coordinated Bargaining Committee of GE Unions) have jointly sat down with the company in the final week of talks. Not so this year. The two unions with national contracts continued separate bargaining with GE to the end. No one seemed certain how the altered process would work.

This change added to the difficulties faced by UE bargainers, who were joined throughout the four weeks of talks by representatives of the UAW, IBEW and American Flint Glass Workers.

Economic conditions, especially climbing unemployment rates, further added to the problems faced by the UE negotiating committee as bargaining got underway.

"All the odds were against us," commented UE Local 506 Bus. Agent Patrick Rafferty, a veteran bargainer.


Nevertheless, the UE committee resolutely insisted that GE workers deserved substantial contract improvements from a company wealthy enough to readily provide them. Rank-and-file action from California to New York backed the union bargainers.

In his opening statement, UE Genl. Pres. John Hovis pointed out that the experience of the last three years proved again what the union had asserted in the past — GE is recession-proof. "Despite a protracted worldwide recession, accompanied and exacerbated by corporate scandals, terrorism and war, a plunging stock market, and falling consumer confidence and purchasing power, GE has emerged with its long spree of record-setting sales and profits intact," Hovis said.

GE, not surprisingly, concentrated on holding on to as much of its profits as possible.

The company’s opening statement, delivered by spokesperson John Curtin, said a tougher new bargaining climate did not incline GE to a generous package. He emphasized how well GE workers are doing compared to the employees of competitors. (The union repeatedly demonstrated that GE has no "competitors" worthy of the name.)

Curtin made it clear that the company would expect further cost-shifting, and signaled GE’s intention to add to retirees’ insurance burden.

Over the first three weeks of negotiations, the two sides exchanged volleys of facts and figures aimed at supporting their arguments. UE Research Dir. Lisa Frank gave presentations on GE finances and medical insurance, while Intl. Rep. Steve Tormey critiqued the pension plan.

The UE committee delivered, explained and argued for a broad set of contract demands during the first three weeks. Again and again, committee members conveyed the members’ expectations for a fair contract, with improvements in wages, pensions, job security, insurance and other areas. "You’ve got it, we deserve better," Local 332 Bus. Agent Bob Brown told the company. "Our members definitely don’t want to go backwards this year," declared Local 1010 Chief Steward Bill Wossum.

In response to one union proposal, GE’s Curtin objected, "This is not the time for unreasonable demands or expectations on either party’s part." Brown of Local 332 shot right back, "I don’t remember a time when we had unreasonable demands."


The UE committee proposed substantial general wage increases in each year of the agreement, and let the company know that an improved cost-of-living formula was a priority. "We know how much it costs to live," said Local 618 Bus. Agent Lynda Leech. "Our people feel strongly about this."

Hourly workers saw little more than 2 percent in real wage increases in each year of the 2000-2003 contract, Research Dir. Frank reminded GE management. And as GE enjoyed record-breaking profits, workers received a diminishing share. Employee compensation as a proportion of company revenues fell by 6 percent over the last three years, she said.

Frank said GE bests a long list of potential domestic and foreign competitors in numerous ways. Many of these would-be rivals have seen revenues and earnings take a beating during the recession. Using GE’s new advertising slogan, Frank said the fear of being beaten by competitors is a good example of "imagination at work."


Union members had plenty to say about health insurance, and reacted sharply to the GE spokesperson’s comment that the company’s goal is a 70/30 employer-employee cost split. "That’s outlandish and repugnant, and totally unjustified," declared UE’s Tormey.

Local 751 Pres. Ed Baran warned that the company’s goals of "modest" wage increases and additional insurance cost-shifting represented "a dangerous mix." Responding to a company presentation, Bob Brown countered that GE is part of the health-cost inflation problem as a major manufacturer of high-priced medical technology.

"Both sides know, this is the issue," Pres. Hovis said. He cautioned management about over-reaching. "This is the issue that will wreck the train," he said.

In a detailed presentation, Research Dir. Frank demonstrated that the company’s remedies for the health-care crisis — cost-containment and cost-shifting — are no solutions. Frank pointed out that while employee contributions rose steadily, GE’s aggregate insurance costs declined in the 1990s and have only recently reached the level of 1992.

UE’s solution is the publicly financed, single-payer plan promoted by the Labor Party as its "Just Healthcare" program. GE’s never joined with us in saying the system’s broken, said Pres. Hovis. In Canada, GM, Ford and Daimler-Chrysler joined with union leaders in defending that country’s not-for-profit health-care system because of its cost savings and competitive advantage, he said.

The union had a number of proposals for improvements in health insurance. One of them was a demand that there be no mid-contract reopener, like the one that led to January’s national strike. "You have our attention on that one," Curtin responded.


The UE committee worked hard to also get the company’s attention on pensions. In a detailed, two-hour presentation, UE-GE Conference Board Sec. Tormey examined the pension plan’s funding, problems with the plan, and union-recommended solutions. The plan’s assets of approximately $37 billion compare favorably to the total assets of entire corporations. Stock market reverses have reduced assets, but at the end of 2002 the plan was still overfunded by $4.5 billion — an amount larger than the net worth of so-called competitors such as Rockwell and Whirlpool.

Unlike the vast majority of manufacturing employees covered by defined benefit plans, GE workers continue to make contributions to the pension fund, Tormey pointed out. GE hasn’t made a contribution since 1987, but enjoys a considerable advantage over competitors with respect to funding levels and reported pension "profits."

Union members had a number of pension-related proposals, including a substantial increase in benefits, earlier voluntary retirement, and automatic cost-of-living increases for present and future retirees.

In addition to arguing on behalf of co-workers, the UE bargainers also made a strong case for retirees. Local 506 Pres. Frank Fusco recalled how former GE CEO Jack Welch objected to early retirement on the grounds that people shouldn’t leave GE to start new careers. "We agree," Fusco said. "Seventy-year-old retirees shouldn’t have to go out and find jobs in order to make ends meet." Marco Coeur, Local 1010, told management that retirees have seen the value of their pensions dwindle due to the high cost of medical care, and have been forced into jobs like Wal-Mart. "Their long-time dream has turned into a nightmare," he said. Lynda Leech, Local 618, suggested that "the people who determine the benefits ought to try living on what the retirees get."


Pres. John Hovis Local 506 Pres. Frank Fusco Local 618 Bus. Agent Lynda Leech

The May 15th rally was attended by some 2,000 people ...

... including RAGE (Retirees Association) members ...

... determined to get a good contract ...

At the Erie rally (top, from left) Pres. John Hovis, Local 506 Pres. Frank Fusco, Local 618 Bus. Agent Lynda Leech. The May 15th rally was attended by some 2,000 workers, relatives and supporters, including RAGE (Retirees Association of GE) members.

Given the steady erosion of GE jobs, UE members had a great deal to say about strengthening the contract’s job and income-security provisions.

David Kitchen, Local 506 Chief Plant Steward, reviewed the loss of jobs at the Erie locomotive works and the operation of the Job Preservation Steering Committee to make the case for contract improvements. The continuing loss of jobs has been a result of outsourcing, farmout, subcontracting, transfers of work and productivity changes, he said.  that no direct relationship exists between locomotive orders and employment. "When locomotive production hit its peak there was no corresponding new hiring," Kitchen said. The increase in production only meant an increase in the hours worked by the workforce during those periods.

Local 506 Bus. Agent Rafferty asserted that the company is taking advantage of a market downturn to attack "indirect" workers. And he said that lower-service workers who lose their jobs are of particular concern because they don’t have the cushion that longer-service people have.

The UE committee linked the company’s insistence on keeping employment levels low to the use of subcontractors. Local 332 Bus. Agent Brown pointed out that production is up at the Fort Edward, N.Y. plant, but the level of trades workers has not kept pace.

In more than 22 years of employment at the Ontario, Calif. jet engine repair shop, Marco Coeur said, he has seen the workforce shrink. And he has seen the pain in the eyes of co-workers forced out of the plant. "The head-counters made these decisions knowing full well they won’t have to face these employees. We officers and executive board of Local 1010 do," Coeur said.


UE members demonstrated their insistence on a fair contract loudly and consistently.

Locals 506 and 618 hosted a major rally in Erie, Pa. on May 15, just before the start of national negotiations. The rally, attended by some 2,000, heard remarks from union leaders and featured labor singer-songwriter Anne Feeney. Local 506 members also traveled to Lynn, Mass. for a major rally hosted by IUE/CWA Local 201. Local 1010 members rallied and picketed during lunch breaks. Local 332 members conducted informational picketing between shifts. Local 506 timed a grievance strike for the final days of bargaining.

All across the GE chain, UE members wore union buttons, T-shirts and assorted other paraphernalia, and in various other ways demonstrated their support for the UE bargaining goals and negotiating team, including filling up picket rosters.

The final week began with the company’s medical cost-shifting proposals, which were even worse than anticipated by the union bargaining committee. A difficult week of hard bargaining ended with a tentative agreement on the afternoon of Sunday, June 15, some seven hours prior to the expiration of the 2000-2003 contract. The committee voted unanimously to recommend ratification on June 15 the UE-GE Conference Board acted likewise June 17.


At the Conference Board meeting, Sec. Tormey described the pension area as containing the biggest gains.

The medical insurance cost-shifting GE imposed, primarily in the form of higher contributions, was described as the agreement’s most unsatisfactory feature. "This is a pretty big hit — but they wanted much, much more," Tormey said of the cost-shifting. "There was some horrendous stuff in their first proposal."

The union was successful in beating back almost all of GE’s proposed cost-shifting to retirees, however. "We really fought them hard on these things," Rafferty added.

"There are warts on this agreement," Tormey admitted. "It is what it is. We did our best, we fought as hard and as well as we could. We dragged as much out of the company as we could, short of confrontation."

Pres. Hovis and Tormey praised the committee, as did another veteran bargainer. Rafferty told the Conference Board, "This negotiating committee was something to be proud of." And he praised the work of rank-and-file leaders back home in the locals whom he said did "an extraordinary job" in communications and organizing.

"The company got the message, loud and clear," commented Pres. Hovis.

The new national contract breaks with the pattern of three-year agreements established in 1960. Adjustments for the longer contract term appear in a number of areas.


The contract calls for an immediate 3 percent wage increase, with increases of 2.5 percent in June 2004 and June 2005, and 3 percent in June 2006.

The cost-of-living adjustment continues uncapped with an improved formula of one cent for each .09 percent rise in the CPI-W with eight adjustments covering a 44-month period. The new COLA formula represents about an 11 percent improvement over the preceding formula in inflation protection.

A wage structure adjustment, effective June 16, 2003, adds one cent per hour to all rates above $21.03 per hour, with an additional one cent for each 15-cent wage bracket above that amount.


The range of the Guaranteed Minimum pension tables, based on an employee’s "high 3" years of earnings, is increased from the previous $28 to $40 times years of service, to a new range of $33 to $60. This represents the largest guaranteed pension increase ever won in bargaining. All levels in the middle of the tables also increase.

Effective June 2004, the Regular Career Formula is improved by freezing the "break point" between 1.45 and 1.9 percent at $35,000. The break point had been scheduled to float upward well above that amount. A Career Pension Update will enrich pensions of those retiring under the regular formula. This provision applies to employees with 25 or more years of service or those age 55 with 20 years’ service as of Dec. 31, 2002. This provision takes effect Dec. 1 for pensions beginning June 1, 2002 or later.

The Regular Supplement increases from $14 to $15 times years of service, and will rise to $16 July 1, 2005 for employees retiring between age 60 and the age to qualify for 80 percent Social Security. The Special Supplement of $350 a month is renewed for employees with 25 or more years’ service. The restrictive "three month" rule is eliminated, meaning GE workers retiring at any time prior to the age at which 80 percent Social Security is paid will now receive this benefit.


The contract significantly raises the threshold for mandatory pension contribution of 3 percent of pay, from $37,500 to $50,000 of annual earnings. The earnings threshold will rise again to $60,000, effective 2006. As a result, for the first time ever, most hourly GE workers will no longer have to contribute to the pension. This will result in savings of up to $675 per year in after-tax money.

Retirees will receive a one-time lump-sum pension increase, or a "13th check," in late 2003 or early 2004. The lump sum will be equal to one month’s basic pension (excluding supplements and Personal Pension Accounts). Eligible recipients are those who retired on or before Jan. 1, 2002; terminated vested retirees with 25 years or more service who began receiving pensions on or before Jan. 1, 2002; surviving spouses of the above; and surviving spouses of employees who died in active service, and whose survivor annuity began on or before Jan. 1, 2002.


The Special Early Retirement Option (SERO), scheduled to expire with the old contract, is renewed for employees ages 55-59 with 25 years of service affected by a "job loss event." SERO 30 is also renewed. These benefits enable eligible workers to retire with full pensions during periods of layoffs.

The SERO "Window," which provides for full voluntary retirement for eligible GE workers below the standard early retirement age of 60, is reopened in 2003 and again in 2005. All "Window" retirees produce an equal number of recalls from the layoff list or new hires. Eligibility for the first window is limited to the 850 applicants nationally who have the most Pension Benefit Service (PBS). The second window is limited to the 600 applicants with the most PBS. Union members in GE are guaranteed to receive 1,020 of the 1,450 total "Window" slots.

The Preferential Placement relocation allowances for laid-off workers placed at other GE plants, increases from $2,500 to $3,000 for individual employees and from $5,000 to $6,000 for employees with live-in dependents. Potential hiring locations are expanded to include many GE affiliate companies.

Voluntary Layoff and Special Retirement Bonuses for employees age 60 or older with 15 or more years’ service increases from $12,500 to $14,000. This applies to those who retire voluntarily and prevent the layoff of younger workers.


The guarantee of jobs preserved through job preservation negotiations is extended to three years (up from two years), with a 12-month minimum if the contract expires. The decision bargaining period increases from 45 to 60 days for plant closings and most work transfers. The contract requires an expansion of information that the company must supply on cost comparisons after work-transfer announcements.

The contract eliminates the offset of Income Extension Aid (which supplements unemployment compensation) against severance pay in the event of a plant closing for employees laid off prior to the plant-closing date.

The Individual Development Program (IDP) maximum allowance increases by $1,000 to $5,000 a year, with the maximum for non-GE-job-related courses upped by $500 to $2,000, and textbook allowance by $50 to $200 per course. IDP pays for courses related to occupational training.


The costs and benefits of Health Care Preferred (HCP), GE’s managed-care insurance option, are "locked in" for entire contract term, and may not be reopened. Such a "reopener" provoked the two-day national strike in January. Effective Jan. 1, 2004, weekly Short-Term Disability benefits will increase to $550, and to $600 effective 2006.

Lifetime maximum benefits under the medical plans will increase to $2.5 million per person, a $500,000 improvement.

The preventive care schedule allowances under Comprehensive Medical Benefits (CMB), GE’s traditional indemnity insurance plan, are increased. Coverage is added for bone density and chlamydia screenings and for Hepatitis B series and Meningitis vaccine.

The dental schedule is increased effective Jan. 1, 2005.

CMB co-pays for hospital, emergency room, and drugs increase Jan. 1, 2004, parallel to increases to HCP of last January.

Long-Term Disability Insurance (LTDI) minimums increase by $50 for all three benefit options.

Same-sex domestic partners will also be eligible to receive medical coverage for the first time.

Contributions from pay will increase in 2004 and 2006 for medical coverage, and will now be based on a three-tiered system of one, two, or three or more individuals. (The company had sought a five-tier system.) Contributions will continue to be made on a pre-tax basis.


Lifetime maximums increase in pensioner medical plans MCPP and PHIP, which supplement Medicare, to $125,000 per couple and $75,000 per individual, respectively. The MCPP and PHIP first-day hospital benefit is increased to $650 and $150 respectively.

Pre-65 retirees’ medical contributions rise by $1.00 per week for retiree and $1.00 for dependents. The Pensioners Prescription Drug Plan (PPDP) co-pay for mail order drugs increases from $20 to $25 for a 90-day supply. Otherwise PPDP co-pays remain same for current post-65 retirees and those enrolled prior to Jan. 1, 2004. The PPDP structure changes for future retirees (those retiring on Jan. 1, 2004 and after). Retail co-pays will be $12 generic and $16 retail for brand drugs (currently $15 uniformly). Mail co-pays will be $20 generic and $36 brand for 90-day supply (now $20 uniformly).

For the first time, a PPDP out-of-pocket maximum is established, with 100 percent of drug costs covered after the maximum is reached. The out-of-pocket maximum is $1,500 per participant for post-65 retirees and those enrolling before Jan. 1, 2004, and $2,000 per participant enrolled on Jan.1, 2004 and thereafter.

Similarly, a prescription co-pay out-of-pocket maximum for active employees is established with a maximum of $2,000 per participant per year and $4,000 for a family.


Union representatives’ lost-time at Step 3 meetings will be company-paid for the first time, and the number of union representatives eligible for Step 2 payment increases from eight to 10 at large locations.

The apparatus service shop tool and safety shoe allowances increases to $275 and $150 respectively, up from $225 and $125. The meal allowance will increase to $28 a day now and to $30 in 2006.

A death in the family which occurs during an employee’s vacation now will result in two additional days off with pay at vacation’s end or later.

Sick and personal time of four hours or more will now count as hours worked in calculation of overtime pay.

The dependent life insurance plan will be restructured, and a new option will allow $5,000 increased spouse and $1,000 child coverage with no evidence of good health if one enrolls in fall 2003. A new option allows up to $100,000 spouse and $10,000 per child coverage. Rates will be age-based.


Over the four weeks of negotiations, the UE negotiating committee consisted of Genl. Pres. John Hovis; UE-GE Conference Board Sec. Steve Tormey; Bob Brown and David Dennison, Local 332; Frank Fusco, David Kitchen and Pat Rafferty, Local 506; Lynda Leech and Bill DeSantis, Local 618; Pat Wojtowicz, Local 731; Ed Baran, Local 751; Marco Coeur and Bill Wossum, Local 1010. Genl. Sec.-Treas. Bruce Klipple and Dir. of Org. Bob Kingsley each attended a day of the talks. Research Dir. Lisa Frank’s assistance to bargaining extended beyond her formal presentations on health care and company finances. Intl. Rep. Chris Townsend represented UE at the IUE/CWA table. Special Projects Dir. Rick Peduzzi developed and maintained the UE-GE bargaining website. UE NEWS Managing Editor Peter Gilmore prepared daily summaries during the first three weeks.


See Also: UE-GE 2003 Contract Negotiations

UE News - 7/03

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