Opening Statement of Bruce J. Klipple, General President
United Electrical, Radio and Machine Workers of America (UE)
2015 National Negotiation with General Electric Company
June 2, 2015
In his closing remarks on the opening of national bargaining in May, 2011, UE’s General President John Hovis stated; “Frankly, this is the most apprehension I felt since I first became personally involved in these negotiations back in the 1980’s.” He continued; “I worry about GE “overreaching” at a critical time in GE’s rebound from the depressed economy. The number of issues GE is raising is the broadest and most profound I can recall.”
Mr. Hovis’s “apprehension”, unfortunately for us ‐ came true. The General Electric negotiators, backed by corporate, did in fact “overreach” in the 2011 national negotiations. What GE has imposed on new hires, on salaried workers, on non‐ union workers, as well as union workers, was then and continues to be, a hardship for so many.
Eliminating secure pensions for new hires; the lack of family sustaining wages and affordable health insurance for thousands of GE workers is not a real investment in returning to GE’s industrial roots. Instead, this overreaching has made GE a leader in the “devaluing of American industrial jobs” that far too many corporations feel is what American workers will tolerate today. GE has become a new leader in this “race to the bottom” without regard to the cost to employees or their communities in which they live.
GE’s industrial profits increased from 2010 to 2014, from $14.1 billion to $17.8 billion, an increase of 24.5%. During the same time period, the profit margin of GE Transportation, more than doubled, climbing from 9.3% to 20%. Don’t take me wrong, this is good! But it should be equally good for the company and those industrial workers who reinforce the foundations upon which General Electric was built.
It’s those remaining core industries that shore up GE’s financial expectations and a few of Mr. Immelt’s excerpts in his “Letter to Shareholders” dated February 2014, we believe speak volumes to this; ...”By 2016, we expect to have 70% of GE’s earnings from our industrial businesses. We expect... industrial margins and returns exceeding 17%, at the top of our peers. We made progress in 2013. We earned $24.5 billion of segment profit, up 7%. We... returned $18 billion to you through dividends and share repurchase. In 2014, we have planned for our industrial earnings to grow by more than 10%. We are planning for another year of sustainable margin enhancement, beyond the 15.7% we achieved in 2013. Our total shareholder return expended by 38% in 2013, ahead of the market. We added $64 billion of market cap and, at $282 billion, are the sixth most valuable company in the world.” Although GE paints a very optimistic picture of its financial strength for Wall Street and shareholders, we fully expect to hear from you how those profit margins are good, but just aren’t good enough.
I tell you, our members will not stand for another round of one‐sided negotiations! UE members are an equal partner to these negotiations. Today, we come to the bargaining table with proposals that push back against the company overreach in 2011. We do so with the confidence that GE workers remain among the best and most productive in the world, and should be rewarded as such.
Mr. Immelt and other GE officers have been handsomely rewarded for their hard work over the same four year period, with Mr. Immelt’s total SEC‐reported compensation climbing by more than 70%. In contrast, over the same four year period, UE members realized real wage increases slightly above 2% ‐ in total – after increased family health insurance out of pocket expenses and inflation are factored in. UE will propose and expect substantial structural wage increases each year of the contract. And it’s now time to do away with the extended progression schedules and inferior night shift premiums that new hires suffer.
With respect to medical insurance; the cost shifting to employees we predicted in 2011 has come true. We have paid significantly much more out of pocket than you led us to believe. GE’s projections concerning the cost to our members were not true. In its final 2011 proposal, GE negotiators promised to pay 76% of all health care costs. You have not lived up to that promise! In fact, in 2012 when GE installed this health care program, our members’ cost rose by 18% while GE’s cost declined by the same percentage. This is not making us smarter consumers of health care; it’s just shifting the cost onto our backs. As you will see from our proposals, we are seeking substantial health care improvements for our members that roll back the massive cost shift your overreach imposed in 2011.
But that alone will not settle our health insurance problems. The current health care plan is broken. It not only costs us too much to get care, it’s confusing, and takes way too much time to get bills paid, and too much time to complete all of the required paperwork. It’s so broken that the logical solution to us is returning to the old plans, HCP and GEMB, unless you convince us that you can make drastic improvements to the current plan that lowers our cost, substantially reduces our paperwork, and establishes a fair cost‐share between GE and its employees. We have had a couple of meetings with you to address the cumbersome and difficult administrative process that frustrate so many of our members. Those meetings were truly appreciated, but we remain skeptical that you really hear our members’ frustrations. In the end, we must establish a fair cost share arrangement, lower out of pocket costs, and get the paperwork nightmare
In addition, GE’s attack on post‐65 health care benefits is simply unacceptable and unjustified. We know that you eliminated post‐65 benefits for exempt salaried workers on January 1, and will likely propose the same for union members. GE should be ashamed of its attack on this benefit. Since 2011, GE’s cost to maintain these programs for post‐65 retirees has actually declined! For years, GE promised our members who have given a lifetime of work and dedication to you that they would have health care security in retirement, with the company paying a significant part of health care costs. Now, as if it was nothing at all, GE wants to renege on this commitment. We say a promise made should be a promise kept – and we expect post‐65 health care to remain part of our National Agreement with GE. We intend to protect these benefits because GE workers, past and present, have made this company very profitable and deserve a decent retirement which includes health security.
GE’s pension is overfunded again, with 104% funding ratio as of January 1. No company contributions are expected for the next few years, and very likely for a number of years thereafter. Over the last decade, GE workers have contributed $1.64 billion of their earnings to the GE Pension Plan, while GE made just one contribution during this time of $433 million in 2012. Part of the 2011 company “overreach” was walling off all new hires from participating in the regular GE pension plan. As a result post‐2011 hires will have a great deal of difficultly in establishing a secure retirement, especially when high health insurance deductibles, co‐pays and cost shifting has eaten away earnings that could have gone toward investing for retirement. And those GE workers who were hired on low tiers, work for so‐called competitive wages or community based wages in their workplaces will have almost no disposable income left to put away toward retirement
GE and the GE Pension Plan can certainly afford the modest proposals we are making to provide that all employees hired after January I, 2012 receive DB pension benefits back to their date of hire. Similarly, the pension plan is healthy enough to pay out decent increases to the guaranteed minimum formulas and provide for a career earnings “update” of past service, and long overdue improvements to disability pensions.
With respect to current pensioners,’ the lump sum “13th check” in December 2011 was a welcome addition for so many who struggle daily to make ends meet. If GE is really serious about shifting hourly, post – 65 retirees to private exchanges, then the company should grant a substantial increase to all retirees and move to a pension COLA so retirees may have a chance at health security in future years.
The CBC’s recent survey of GE union members showed that 77% feel their jobs are threatened by outsourcing, off‐shoring, and relocation of work to new low‐wage GE shops. What our members experienced in Erie and Ft. Edward over the last several years was not deserved. UE members in both locations interpret the layoffs and plant closing as nothing less than an attack by GE because they wouldn’t cave in and give the company huge wage and benefit concessions. And as we negotiate towards a new agreement here in New York, thousands more GE workers, including UE members, once again face job security uncertainty with the sale of GE Appliances.
Given the continued insecurity that our members and members of CBC unions are subjected to, we will propose structural improvements in this area hoping to gain some guarantees and protections for our members, as well as income security improvements. These will include enhanced Income Extension Aid (IEA), a renewed Special Early Retirement Option (SERO), and reopening of the SERO "window" provision.
Over the past 78 years of bargaining history between UE and GE, we have entered every negotiation with a sincere desire to reach an equitable agreement. We had our differences, but in every negotiations we have been able to come to a mutually acceptable agreement with the exception of 1946 and 1969. I remain concerned about the continuing “overreach” by GE. What GE imposed on salaried workers and new hires was wrong. UE will put forth our best efforts over the next few weeks to achieve a new agreement that respects our members’ dedication and commitment to making the best product available for GE customers. We sincerely hope the Company will share the same respect and commitment to our members, your employees.
In closing, I want to remind you that our members and the generations that came before them built this Company. We’re not asking for a share in your profits, but we are asking for fair wages and benefits, which the world’s sixth largest corporation can certainly afford. Our members – active, retired, and soon to be retired need health care security, livable pensions, and the job security of knowing that they can retain their jobs with decent wages and benefits with dignity and respect for the foreseeable future.