Summary #12
GE Lowers the
Boom on New Hires

New York – Wednesday, June 15

Small Table Report

Right on schedule and as expected, Wednesday morning saw GE propose to stick hourly new hires with the same infected needle they used on salaried new hires last January. That is, as of next year, GE wants to slam the door in the face of any newly hired hourly worker wanting to join the defined benefit Pension Plan. This is unprecedented in the Plan’s long history – a history that GE apparently is prepared to bring to a sad end.

Once again, company negotiators repeated the canard that this exclusion of new hires “won’t affect anybody presently employed.” And it won’t – for now. But that is like the Captain of the Titanic saying that a little brush with an iceberg is nothing to worry about – for an hour or so.

In their drive to eliminate all so-called “legacy” costs, it is clear GE has taken dead aim at all retiree benefits they must account for on their books. That includes both pre- and post-65 retirees’ medical coverage, retirees’ life insurance, SERO, and ultimately the Pension Plan itself.

As the GE Conference Board stated in its resolution on this subject last December, “when you’re done at GE, the Company wants to be done with you.”

Naturally all of the union negotiators, unfortunate enough to have to listen to this, firmly rejected this outrageous proposal. But GE shows no signs of changing its mind on the issue. So if there wasn’t already enough to worry about, big trouble is brewing here as well.

Who Wants to Be A Millionaire

Like any other snake oil salesman however, GE is adept at sugarcoating large doses of bad medicine. So alongside closing the pension door, GE proposed increasing the match in the Savings Plan (S&SP) from its current 3.5% to 4%, while adding another 3% of pay to something called a Company Retirement Contribution (CRC) for new hires. This, we are told, will make up for the loss of the Pension Plan.

Of course, considering the substandard two-tier wage arrangements they have imposed in many locations around the country, GE is clearly hoping that many members of the next generation of GE workers will not be catching-up to current GE hourly average wages any time soon. Accordingly, the S&SP “match” and the new CRC will, in many cases, be figured on wages well under $20.00 per hour.

Nonetheless GE showed futuristic projections that: IF someone works 35 straight years without a break, layoff, disability etc; and IF they uninterruptedly save 15% of their pay each and every year (8% of their own money and 7% from GE); and IF they average a 6% investment return on their money for 35 years; and IF they get 3% wage increases every year from their wonderful employer; THEN they will accumulate nest eggs of hundreds of thousands of dollars, and in some cases over a million dollars. Whoopee!

Such Alice-in-Wonderland projections conveniently ignore the facts: that company-wide the average GE worker is retiring with only about 26 years of service; that 35 years from now in the year 2046, dollars are going to be worth much less than they are now; and that we already have both the pension and S&SP, so who in their right mind would give up the security of a guaranteed pension for life for a measly extra 3.5% of pay to be within the “Wall St. Casino?”

No doubt Enron workers, among others with shattered dreams, thought they were going to be millionaires too. GE was candid enough to put in small print at the bottom of their graph the words “actual results may vary.” As thousands of GE workers in S&SP know only too well following the debacle of 2008 – will they ever!

In Sickness and Health

The rest of the morning’s proposals by GE, lacking even the veneer of sugarcoating, were plainly unpalatable. Once again, GE is attempting to force feed to future hourly new hires what they have already rammed down the throats of the non-union salaried workforce. GE generously offered to keep medical coverage for pre-65 retirees, provided the employees pay 100% of the cost! When asked what this would come to in dollars and cents, GE provided no data. The Union reminded the Company that four years ago, a difficult compromise was reached for workers hired after January 1, 2008 to pay 25% of costs for this coverage. Four short years later, GE wants to pay nothing.

And not content with cutting retirees’ life insurance from $50,000 to $15,000 four years ago, GE now wants to eliminate it altogether. Presumably one needs to hope his or her defined contribution “nest egg” is not cracked or scrambled, so that enough will be left to cover the funeral.

Left unresolved was whether GE would send the aggrieved family a note of condolence upon reading the obituary.

All kidding aside, the dismal morning session should cause us all to reflect about the shape we’d be in if previous generations of GE members had not made sure to protect those who followed.

Afternoon: 'Somewhat Brighter'

Following the morning’s gloom, things brightened somewhat in the afternoon. GE’s proposed enhancements to a number of minor benefits such as the emergency aid plan and adoption assistance, as well as improvements to educational programs such as the Individual Development Plan (IDP), educational loans, and the scholarship program for children of deceased employees.

On the disability front, the company offered modest increases in both Short Term (STD) and Long Term (LTDI) benefits.

Tomorrow will bring the conclusion to GE’s opening “roll out” of proposals with their opening gambits on wages and job and income security. All indications are that GE will take dead aim at SERO, even as they continue to brook no interference to their well documented job slashing tendencies.

We can’t say the news has thus far been any good, but you want to be sure and keep up with us anyway.

UE was represented at the small table by General President John Hovis and UE-GE Conference Board Secretary Steve Tormey.

Large Table Reports

Pension and Insurance Subcommittee
Appalled by GE Executives’ Golden
Parachute Pension

While GE was dishing out their thin gruel to UE and CBC union bargainers at the small table, the unions at the large table unleashed a series of blistering attacks on the company for maintaining a “special supplemental pension” for highly-paid executives. At the conclusion of the morning session, a CBC representative asked the company to provide details on the plan.

In the afternoon, the company failed to produce the requested information. However, UE members participating on the subcommittee released a slide from the pension presentation they had given the company last week, detailing the outrageous benefits available to highly paid GE executives.

$1.38 Million Per Boss, plus ...

UE’s slide, based upon data which is readily available in GE’s Annual Report, disclosed that its “golden parachute plan” contains a projected benefit obligation of approximately $4.4 billion for a plan which covers only 3,200 eligible GE executives – an average obligation of $1.38 million for each of the highly paid bosses. This special pension plan is a supplemental plan and is paid to the executives in addition to benefits available to them under the normal GE pension plan.

Speaker after speaker from each and every union – UE, IUE-CWA, UAW, Machinists, Steelworkers, IFPTE draftsmen, IBEW – denounced the company for providing the shameful benefit for its highest-paid employees, while it resists making needed improvements to the Pension Plan for the rest of its workers and pension increases for current retirees. One IUE-CWA leader called it a “sin.”

It is common knowledge that GE has made no contribution – zero dollars – to the Pension Plan in twenty-four years, for a plan that covers more than 500,000 retirees, current employees, and vested participants. However, the UE’s slide revealed that since 1997, GE had generously bestowed substantially more than $1 billion for those fortunate few executives.

Ron Flowers, former UE Local 618 leader now representing the Retirees Association of General Electric (RAGE), told the company that: “I can attest to what is happening to retirees – they have experienced the worst recession on their fixed incomes since the Great Depression. Between the drop in GE’s stock market price and declining dividends,” Flowers sadly announced, “retirees have nowhere to go to make up for the sharp loss in their income. Now we learn that the company is shamefully dumping billions into a special fund for its highest paid executives, while it claims to have no money to increase pensions for the thousands of retirees who built this company and who are now hurting.”

While referring to the company’s proposal to carve new hires out of the pension plan, UE Local 506 Business Agent Wayne Burnett scolded GE: “You know it’s well-funded [the pension plan], and we know it. Let’s be real about this. Our members won’t agree to sacrifice those that have worked, those that are currently working, and those that will be working. This would be a very hard sell in Erie and we’re not about to go backwards on our pension,” Burnett exclaimed. “We contributed to it, you didn’t and we’re not about to stand for the changes you propose.”

UE and CBC representatives will continue discussions in the Pension and Insurance Committee on Thursday morning.

UE was represented at the Pension and Insurance Subcommittee by Co-Chair Wayne Burnett, Local 506, General Secretary-Treasurer Bruce Klipple, Angel Sardina, Local 332, and International Rep. Gene Elk.

Contract Language Subcommittee

The Contract Language subcommittee met through the day on Wednesday. The morning session dealt with a list of issues ranging from hours and overtime, the need to accelerate the new hire wage progression, increase night shift differential pay, hourly and salaried progression issues, and vacation issues, among others.

Union negotiators pushed GE to fix the many problems stemming from company supervisors who refuse to follow the contract terms regarding overtime equalization. In response, a GE representative claimed that they work to “fix” these problems when brought to their attention. This assertion stimulated a flurry of examples offered by union negotiators where plant management had repeatedly ignored the contract and suffered no apparent corrective consequences from their superiors. Local 506 President Roger Zaczyk told the company that “506’s position (on overtime) is for the Company to hire more people.”

Union bargainers then moved into vacation related subjects and demanded the ability to use vacation time in hourly increments as opposed to the current minimum of 4 hours. Local 618 President Mary Stewart-Flowers told the company that, “You would save money on overtime by allowing us to use vacations in hourly increments.”

The afternoon session of the subcommittee began with a discussion of a variety of issues needing improvement, including the safety shoe and eyeglass allowance among others.

Union negotiators also blasted GE for their fanatical anti-union response to CBC unions’ efforts to organize nonunion locations. Examples of objectionable - even outrageous - company conduct were offered as evidence that this issue needs to be seriously addressed by GE. UE Subcommittee Co-Chair Chris Townsend told GE representatives point-blank that “This Company needs to do a lot better” to clean up its conduct when unions try to assist workers’ efforts to join unions.

In attempting to defend the company’s actions, GE negotiators tried to claim that somehow “both sides” were guilty of infractions and excesses during organizing battles.

“Where have the unions ever done such things?” Townsend demanded. The Company offered no such examples and adroitly maneuvered to change the subject.

Subcommittee members ended the afternoon session by pushing GE to change its practice of applying sick and personal days to workers’ absences without their consent, along with demands for more paid union time for stewards. Zaczyk told GE that, “There’s not enough time... we need more time.”

UE was represented at the Contract Language subcommittee by Co-Chair Chris Townsend, Political Action Director, Roger Zaczyk, Local 506, Scott Gates, Local 332, Mary Stewart-Flowers, Local 618, and Ron Flowers, Retirees Association of General Electric (RAGE).