UE negotiators on Thursday, June 11 wrapped up the first phase of national contract bargaining with GE, in which two unions, UE and IUE-CWA, have separate bargaining and are joined by other CBC unions. In the second stage of bargaining, which begins on Monday, June 15, the unions negotiate jointly with GE at a “small table” where the parties seek to hammer out an overall tentative agreement, and two “issues” subcommittee tables that deal respectively with contract language and benefits issues. Both the UE and IUE-CWA contracts expire on Sunday, June 21.
On the final day of the UE table, the company made a presentation on existing disability benefits; UE presented proposals on disability, apparatus service shops, and some administrative. Additionally, UE brought in Neil Gladstein, Director of Strategic Resources for the International Association of Machinists (IAM) who presented his analysis which shows that the GE Pension Plan (GEPP) is far superior to the Retirement Savings Plan (RSP), the 401(k) plan that is the only retirement income plan GE offers to new hires. According to Gladstein, GE’s new hire “retirement plan” provides a much lower income for a retiree when compared to the regular pension. Finally, the company and each member of the UE bargaining committee made “wrap-up” statements summarizing the talks so far and what lies ahead in seeking an agreement.
Kathy Sanchez gave GE’s presentation on disability programs including Short Term Disability (STD), Long Term Disability Insurance (LTDI), disability pensions and workers’ compensation. Members of the UE committee asked a few questions, and both Local 506 President Scott Slawson and Business Agent Frank Fusco raised specific cases of union members having problems with the administration of these benefits.
Following a break, UE’s chief negotiator Gene Elk presented UE’s proposals on these issues. The union called for increases in STD benefits and the Long Term Disability Income (LTDI) minimums, for maintaining employee’s health insurance for the duration of LTDI leave or until the worker qualifies for Medicare, and for a company contribution to LTDI. GE currently makes no contributions to LTDI. UE also proposed establishing an annual open enrollment period for LTDI benefits, as our member’s needs change over time.
Elk then presented UE proposals on administrative issues, including providing an on-site benefit counselor at major GE locations, such as Erie. Elk suggested that such benefits counselor should act as an advocate for our members and not just as source of information. Other union proposals presented were for the Individual Development Program to cover all career-related courses even if unrelated to GE employment, and to extend GE’s emergency aid plan to retirees in addition to assisting employees when they are hit by large medical bills.
Elk presented proposals specific to UE members who work in apparatus service, Locals 1009 and 1412. These are highly-skilled workers, who maintain and repair GE heavy equipment for customers all over the country. When workers from different apparatus shops work together on a job, UE proposes that lead workers be paid two steps above the highest rate regardless of which shop they are from. UE called for substantial increases in safety shoe and tool allowances, and full company payment for eye exams and safety glasses. Elk also detailed UE’s proposal to attach 15 percent premium pay for work in nuclear plants due to safety hazards, and also to protect UE members’ job security in the Alstom acquisition. Alstom currently employs some apparatus service workers and UE members want assurances that GE’s acquisition will not jeopardize their jobs.
After a short break, Neil Gladstein of the IAM presented his analysis of the relative value of GE Pension and the 401(k) RSP plan GE imposed on new hires in 2012. Newly hired who are not covered under the regular pension are getting hit with a “double whammy,” he said, because not only will their retirement benefits be far lower, but RSP also lacks regular pension protections, such as unreduced early retirement, disability pensions, SERO, surviving spouse benefits, pension supplements, and federal pension insurance through the Pension Benefit Guaranty Corporation (PBGC). Instead, workers in RSP are stuck with all the risks and the “volatility” of the stock market.
Using an example of a worker averaging $60,000 retiring at age 60, and generously assuming 7 percent annual growth in the worker’s RSP account, no layoffs or stock market crashes, and based only on company contributions, this worker could expect a monthly retirement income of $536 at 20 years service, $1,234 at 30 years, compared to a guaranteed monthly benefit under the regular GE pension of $1,563 at 20 years, or of $2,344 at 30 years. Those are losses of 66 percent and 47 percent, respectively. At lower service levels, RSP is an even worse deal for workers, with a loss of retirement income as high as 81 percent at five years.
Company representatives tried to pick apart the assumptions of Gladstein’s analysis, but they were unable to discredit it. And as expected, they repeated GE’s well-worn talking points about “competitiveness” and inferior retirement plans being “the new reality.” In response to GE pension administrator Mike Gorman’s recitation of this company line, Elk shot back, “Who’s your competition? GE gets out of any business where you have serious competition. That’s been GE policy at least since Jack Welch declared it so back in the 1980s.”
Elk then pointedly asked the six company representatives at the table, “You tell us how good a deal RSP is for our members. How many of you are ready to trade in your GEPP for having RSP as your only retirement plan?” When none of them volunteered, Elk told them, “You talk the talk but you don’t walk the walk.”
GE’s Gorman also asserted that workers with only RSP can reach the replacement income targets to retire, but Gladstein told him, “Your targets don’t factor in inflation,” and said that RSP represents “a big cut in these benefits.” Gorman’s response was, “It’s not a cut since they never had it.” In other words, GE is telling new hires that they never had a decent pension to look forward to, so they’re not losing anything!
When GE’s Denise Fagella again stated her view that if workers in RSP don’t end up with a livable retirement it’s their own fault for not saving enough, Gladstein responded, “If they saved 100 percent of their pay, they’d have a great retirement.” And when Gorman once again said GE’s retirement policy needs to be “competitive,” Elk asked why GE continues to buy up other companies that have substantially underfunded pensions which then become GE’s liabilities.
And on the competitiveness argument, Gladstein informed GE that its two competitors in aircraft engines, Pratt & Whitney and Rolls Royce, both continue to provide defined benefit pension plans to their employees, including new hires. When Frank Fusco asked how much training GE provides new hires on how to invest their RSP accounts, Gorman said there are lots of tools available on a company website and by phone.
UE General President Bruce Klipple responded angrily, “They don’t have time to become investment experts! They work hard all day, and then they have to spend their spare time trying to take care of the damned health insurance!” Elk added, “It’s a fact, proven by studies, that professional money managers do a much better job at managing investments than even professional white collar employees can do on their own.”
“You say people in the plan have the opportunity to learn,” said Fusco. “Giving people a website or a phone number is not the same as helping them.” Gorman said he learned a lot about managing an RSP account in a 45-minute session. Klipple responded, “You can try to paint it any way you want. You say a worker can become a money management expert and retire with a lot of money. We don’t agree. You have dumped all the risk on us, as you’ve done with healthcare.”
“You are now a leader in the race to the bottom. This is the same as what the Republicans are trying to do with Social Security. We’re going to fight for a defined benefit pension. This is a savings plan, not a pension, and 401(k)s were never set up to be pensions.”
Elk reiterated something Rudy Gomez from the UAW said earlier. “We as union people believe that we do better when we do it together. You tell workers if they don’t end up with a livable retirement income, ‘It’s your fault. You should have made different choices.’ You tried to deceive us about healthcare, telling us the workers are only contributing 24 percent when your own figures show it’s much higher. You’re not fooling us. Now,” Elk continued, “you’re trying the same thing on RSP. You can got out and try to bullshit the people. You’re not bullshitting us.”
Mike Luvisi took “exception” to Klipple’s comment about the race to the bottom. “Our wages and benefits are the best.” Elk angrily called out the company on that claim: “We’ve found GE workers in Totowa, New Jersey who the company was paying $8.50 an hour. In Clearwater, where you’re stealing our members’ jobs from Ft. Edward, you plan to pay $11, $12 and $13. That’s not a race to the bottom?” Elk asked. “As taxpayers we’ll be paying for food stamps, Medicaid and other programs these low-wage workers need to survive, “because GE is dumping the social costs onto us the taxpayers. What you did to Ft. Edward is a race to the bottom, and you’re turning decent jobs into dead-end jobs.”
SUMMING UP
The parties broke and returned after lunch for a wrap-up. Luvisi thanked both sides for their presentations and professionalism. He said GE is in a leading position but has competition in several areas, and said GE’s job package is “better than our competitors’.” He expressed sympathy for what Ft. Edward workers are going through. Mike Barrell, president of a Steelworkers local at a GE plant in Logan, Ohio, said he’s had a hard time guiding his members in dealing with the complexities of GEHB and “I fear people asking me about what to do with their investments” in RSP.
Robby Evans from an IBEW local representing apparatus workers in Atlanta said healthcare is a top issue for his members. “I work all day on turbines. GEHB is hard and cumbersome to deal with.” Rudy Gomez of the UAW told the GE side, “You’re poisoning the company for the future.” Despite promises of growth in the Evendale, Ohio GE aviation plant, he said that the company has lowered employment levels, even while the UAW has shown its willingness to help GE compete. Don Taylor, also of the UAW, said he appreciated being at the table “with my union brothers and sisters,” and he appreciated that GE is a “good middle-class job”, and said he wants to keep it that way.
UE Local 618 Business Agent Karleen Torrance said that GEHB costs too much and WageWorks “is cumbersome and doesn’t work.” She reiterated the importance to her members of providing automatic progression to labor grade 12, and improving the cost-of-living allowance.
Chief Plant Steward Leo Grzegorzewski of Local 506 thanked the company negotiators, but told them, “what you’ve done to our healthcare hurts us at home and in the pocketbook.” Families are experiencing a lot of stress “trying to navigate this frustrating insurance.” He also said “We are very serious about post-65 health insurance,” and that the pensioners need an increase because “a gallon of milk costs a lot more than it did 25 years ago.”
“I thought we had some good discussions,” said Frank Fusco. He stressed that “Article 23 improvements are very important to us,” as is SERO, as the union seeks to save jobs. Fusco also emphasized the need for pension improvements for current workers and current retirees.
Scott Slawson said GE had succeeded with its 2011 agenda and, “Since that time we’ve dealt with an absolute healthcare nightmare of epic proportions… and our new hires will no longer have the same security for retirement that those of us in this room enjoy.”
Slawson also talked about job security issues, and told the company, “Your profit margins have skyrocketed over the last four years largely due to the men and women who come to work every day and produce the products that make those profits.” He told the company that it had overreached in 2011, and “this is your opportunity to do the right thing and right the wrongs of the past.”
Ron Flowers, president of the retiree group RAGE, said he has a half century of dealing with GE, and told the company, “Your retirees are in dire trouble.” He recalled how in the 1980s, Erie GE workers, including many of today’s retirees, helped GE overcome EMD as the leading locomotive manufacturer in North America, going from 20 percent to 80 percent market share. He showed a thick collection of paperwork, one retiree’s appeal of a wrongful charge of $100 from a healthcare bill. “What recourse do retirees have?” he asked. He appealed for a structural pension increase for current retirees.
Al Hart, UE News managing editor who’s been writing these reports, said he was hired as a GE worker almost 42 years ago, and as a third-generation GE worker he, like Flowers, has a long-term view. “Working at GE is a generational job. The sons and daughters of friends I used to work with are in the Erie plant now.” But, he said, the company’s current program of cutting labor costs regardless of the consequences means that each new generation of GE workers will be poorer than those before them. Hart urged the company to return to the best of its legacy, when it competed successfully by leading the industry in good pay and benefits rather than leading the race to the bottom.
Gene Elk cited the testimonials from GE workers included in UE’s presentation on GEHB to reiterate the profound hardships being imposed by that program. He noted that 91 percent of surveyed UE members said they hate GEHB. He echoed Fusco’s comments on job security, and recalled the “72 frustrating days” spent in decision bargaining in Erie. “We didn’t spend much time talking about saving jobs” because of the time GE wasted on subjects like confidentiality agreements.
Elk called the takeaway of post-65 GE health insurance in favor of OneExchange, “one of the most despicable proposals I’ve seen.” He told GE that there will be a gathering of thousands of GE workers on Saturday, “and at this point I don’t have anything good to tell them.” Elk warned the company that if it thinks it’s going to get away with doing to UE members what it did to salaried people, “You’re crazy. We’re going to put up a fight and we’re going to try to convince our brother and sister unionists to fight alongside us.”
UE General President Bruce Klipple gave UE’s last word. He told GE that GEHB “has failed and needs to be fixed.” Job security language also “needs to be fixed” and what happened to Ft. Edward and Erie in 2013 “should not have happened.”
“I remain optimistic that we can reach an equitable settlement,” said Klipple, but he added that a number of statements by company officials in recent days have eroded his optimism. He said GE so far “didn’t learn from 2011,” and if the company is looking for a fight, “you’ll get a fight.”
Klipple thanked the company representatives and the other union representatives, and said UE is ready to work hard in the days ahead to reach an agreement that is fair for everyone.
Negotiations will continue on Monday June 15 at the “small table” where representatives of the UE, IUE-CWA, IAM, UAW, and IBEW will meet jointly with GE to try to hammer out the details of a new national agreement.
UE was represented in Thursday’s session by President Bruce Klipple, International Rep. Gene Elk, Local 506 Business Agent Frank Fusco, President Scott Slawson, and Chief Plant Steward Leo Grzegorzewski; Local 332 President Melvin O’Dell and Business Agent Sherice Stark; Local 618 Business Agent Karleen Torrance; Northeast Region President Peter Knowlton; Retirees Association of General Electric (RAGE) President Ron Flowers; and UE News Managing Editor Al Hart. Field Organizer Omar el-Malah represented UE at the IUE-CWA bargaining table. Other CBC unions joining UE at the bargaining table were the UAW, IAM, IBEW and USW.