On Wednesday at UE-GE national contract negotiations, UE continued the presentation on pensions that it began on Tuesday afternoon. International Rep. Gene Elk, the union’s chief spokesperson, responded to the company’s earlier question about where the figure of 103 percent overfunding of the GE Pension Plan came from. “It came from your own Proxy Statement to stockholders,” he said, as well as the company’s 10(k) filing with the Internal Revenue Service, and the company’s most recent 5500 form filed with the government, in 2013, said the plan was funded at 108.36 percent.
Elk took GE to task for trying to portray “doom and gloom” about the financial health of the pension fund when it is one of the most financially sound pension plans in the country. He took issue with Mike Gorman describing the plan as having “the worst deficit I’ve ever seen.” Elk said, “In 2011 you did the same and said you’d have to contribute $1 billion to the fund, which turned out not to be true.” Frank Fusco, Local 506 business agent, commented that based on the company's projections in 2011, workers ended up with a healthcare plan with which they are very unhappy.
The company defended its claims about a pension “deficit” and said liabilities exceed assets. What they didn’t say is that the “liabilities” on paper include pension obligations to young, low-service workers who will not be eligible to collect pension benefits for many years.
Company representatives were unhappy about Elk’s statement on Tuesday that because the company has only had to make one relatively small contribution to the pension fund in the past 28 years, the actual cost to GE of providing pension benefits has been only $31 per year per plan participant. “But there are other costs,” they said, and Elk replied that all those costs are paid not by GE but by the fund itself, which has grown through investment income and employee contributions. “GE pays next to nothing for the plan. That is a fact and it is indisputable,” said Elk.
“Your projections about healthcare didn’t materialize,” said UE General President Bruce Klipple. “Your past projections about the pension didn’t materialize. I told Mr. Bornstein last week that I hope your projections now are better than the projections that GE made when it got into subprime loans.” Klipple added, “We think GE is well positioned for the future,” and noted that earlier in the week GE had accumulated another $10 billion with the sale of another part of GE Capital. “We want to share in some of that prosperity.”
Elk returned to his presentation and the topic of retiree healthcare. Ron Flowers, president of the Retirees Association of General Electric (RAGE) in Erie says the group includes union as well as exempt salary retirees. He spoke of one female exempt retiree who had so much difficulty with a representative of GE’s One-Exchange who tried to steer her into a high-deductible policy that she didn’t want to purchase. She gave up and bought an AARP policy and lost eligibility for GE healthcare reimbursements.
Flowers also provided examples of other salaried retirees and surviving spouses who are now paying much more for post-65 healthcare due to cuts imposed by GE. (Prior to January 1, 2015, GE cut the amount of healthcare subsidies it provides to salaried retirees by 40 percent per retiree, while eliminating the subsidy entirely for any salaried employee retiring after January 1.) Flowers said that during a meeting with GE pensioner representatives which he attended in Schenectady, GE Senior Vice President Susan Peters told the group, “some people make out, some don’t” in the new retiree health program. “That’s a pretty crass attitude. I hope you will think twice before you do this to more people.”
Elk presented a list of “outdated assumptions” which UE urged GE to rethink. First on the list was “Stop basing replacement rations on a 35-year career. Frank Fusco said he reviewed Local 506’s files after the Tuesday session and found that the average length of service of workers who have retired in Erie so far this year is 27.6 years, far below the company’s assumption of 35 years.
“GE has been hiring substantially older people,” said Local 506 Chief Plant Steward Leo Grzegorzewski. “Does that go into your calculation? Because they’re not going to get as much as your projections claim.”
Elk then presented UE’s proposals on pensions. The union calls for GE to renew its letter committing that it will not make proposals to freeze pension benefits in the next round of contract negotiations. UE also demanded that all employees hired since January 1, 2012, and all future new hires, be included in the GE Pension Plan with benefits retroactive to the worker’s date of hire. The union proposed increases in both the career and guaranteed minimum pension formulas and a career earnings “update” for past service.
Other UE proposals on the pension call for the end of mandatory employee contributions, reducing eligibility for a disability pension to 10 years service, and providing a full unreduced pension at 30 years service regardless of age. UE proposes a pension service credit “buy back” opportunity, and Fusco noted, “There’s probably a dozen people in Erie whose GE service is more than their pension credit service.”
Additionally, UE proposed an automatic cost-of-living adjustment for present and future retirees; substantially increasing the pensions of present retirees; and recognizing the union as their bargaining representative.
Elk also presented UE’s proposals on retiree healthcare. These include basing premium contributions on retirement income rather than pre-retirement wages; adding dental and vision; and other improvements in benefits. Under the prescription program the union proposed an end to the practice of forcing retirees to substitute “generic alternatives” for the drugs prescribed by their doctors. Ron Flowers commented, “You’ve blurred the line between generics and ‘alternatives.’ According to the FDA, there’s only one generic. It has to be identical.”
Elk said the union had presented all of its retirement proposals. Mike Luvisi, chief company negotiator, called it “an impressive list,” and said “almost all of them have cost.” He then renewed his defense of barring new hires from the pension and forcing them into RSP, a 401(k) plan. “We think we did the right thing. We think it’s excellent for those people.”
This drew a response from Local 506 President Scott Slawson, who said the results of the 2011 negotiations produced “a lot of pain.” He told the company not to assume that an agreement and ratification “are going to be as automatic this time.”
In the afternoon, the UE negotiating committee attended a company briefing, along with negotiators for all the CBC unions, on the GE Transportation business in which the members of Locals 506, 618 and 601 work. Richard Simpson, an executive in GE Transportation, described the wide array of products produced by his division, including locomotives, motorized wheels for mining, drilling motors, marine and stationary diesel engines, and services for customers of those products. He discussed the domestic and foreign markets for these products and noted that the locomotive business in particular has a superior product, no serious domestic competition at present, and backlog of orders. Simpson claimed that GE had sold all of the locomotives it had the capability to manufacture in 2015 and 50 percent of capacity was already sold for 2016.
Bargaining will resume on Thursday morning, when UE and GE discuss disability and other issues.
UE was represented in Wednesday’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.