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Differences are Clear
As National Bargaining
Begins May 20
NEW YORK, May 20 — Markedly different goals were revealed in the exchange of opening statements that signaled the
beginning of national bargaining between UE and General Electric. The opening session took place at 3 o’clock on the
afternoon of Tuesday, May 20, 2003.
General President John Hovis, in his remarks, observed how 12 years ago,
during another economic downturn, the union noted that GE had become "essentially recession-proof." GE’s
recent performance has confirmed this fact. "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."
Not only have GE’s profits increased by some 32% over the past three years, Hovis said, but on average each GE
employee now produces more than $44,000 a year in profits for the company." GE has taken advantage of the economic
slump to undertake another $35 billion in acquisitions. Given the company’s outstanding record, "we believe our
members are entirely justified in their expectations that these negotiations will produce substantial improvements in
the areas that concern them the most," President Hovis said.
The union president said GE workers deserve substantial structural wage increases, improved cost-of-living
protection, improvements in health-care benefits, substantial pension increases, early voluntary retirement, an end to
mandatory pension contributions, improvements to paid time off, and strengthened job security provisions.
HEALTH INSURANCE
Characterizing medical insurance as "perhaps the most difficult and contentious" issue the parties face in
these negotiations, Hovis reminded the company representatives that "GE workers are increasingly fed up with the
idea that those least able to pay should shoulder ever more of the burden. Thousands of them demonstrated that fact
during the two-day national strike in January," the union president said. The union opposes further cost-shifting
to employees and demands that Health Care Preferred be negotiated on the same basis as any other benefit plan.
The root of the nation’s health-care crisis is the private and increasingly for-profit health care delivery system,
Hovis said. As "a charter member of the health care establishment," through its medical systems division and
GE capital, GE is unlikely to drop its opposition to a national health insurance system, the UE leader said.
Nonetheless, Hovis declared, "it is high time that GE be a leader in the effort to reform the system, rather than a
leader in cost-shifting to employees, a tactic which will do nothing to rein in escalating costs for medical care."
Hovis described pensions as a "critical issue in our bargaining." He pointed out that the overfunded
pension fund gives GE a competitive advantage over the many companies that have had to make contributions to their
plans, and accounted for more than $5 billion in additional profits for the company in the past three years. The pension
exists, he said, "to provide retirement security to its participants and not as a company profit center."
GE Chairman Immelt has said that GE’s best days are ahead, Hovis observed. "We believe it to be only fair and
equitable that GE workers be given the consideration by the company that will allow a similar confidence in their
futures," he said in conclusion. With diligent efforts by both sides, the parties will be able to get the job done,
he said.
GE: ‘CLIMATE CHANGE’
GE spokesperson John Curtin, representing the company for the second consecutive set of negotiations, said that while
many of the faces around the table are the same, the bargaining climate has changed considerably over the past three
years. GE has a new chairman, unemployment levels have reached the highest levels in eight years, the investment boom
fueled by the "dot-coms" has collapsed, and the economy is still feeling the impact of the 9/11 terror attacks.
The new, tougher bargaining climate does not incline GE towards a generous package, as indicated by Curtin’s
remarks with regard to health care, retirement income and compensation.
Asserting that "GE employees pay about 19% of the cost of their health care, compared to employees at our
competitors who pay about 30% of the cost of care," Curtin made it clear that the company will expect further
cost-shifting. Also, he signaled the company’s intention of adding to retirees’ health insurance costs.
A combination of an increase in plan obligations and decrease in assets has reduced the billions of dollars in
pension overfunding — something to think about as the parties consider pension proposals, Curtin suggested.
GE workers "did very well" in terms of pay with the current contract, Curtin stated. Arguing from
government figures, he said the average straight-time pay for UE production workers is more than 50% above the average
hourly earnings for production workers. "Our position well ahead of the pack, low inflation rates, and the tough
business climate will be the key factors in our discussion of future wage increases," the GE spokesperson said.
GE will be looking for a four-year contract in these negotiations, Curtin said.
The company will look at feasibility of renewing the Special Early Retirement Option (SERO), and consider "ways
to preserve existing jobs and improve the competitiveness of our businesses," Curtin said. The company
representative noted the union’s use of existing contract language to save jobs, and particularly the successful work
of Local 506 in Erie, Pennsylvania.
Negotiations resume Wednesday morning with the union’s presentation of its paid-time off demands.
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