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GE:
'Employees Are
Already Well-Paid'
Most of the day was devoted to company presentations
on compensation and insurance.
GE compensation specialist Dan Gilbert presented a
number of charts designed to convey the impression that GE workers
are well paid, if not over-paid, in comparison to the
"competition." He began by pointing out that GE operates
117 domestic manufacturing facilities in 32 states and competes in
many product areas, ranging from plastic materials to electromedical
devices.
The straight-time average UE-GE hourly wage is
$19.968 (the union said it’s probably closer to $19.67), a 4.9%
improvement over the 1997 average of $17.655. "Roll-up"
— the impact of wage increases on other benefits — drives
increases in compensation costs, Gilbert said. Roll-up today adds 66
cents for every dollar in wage increases. He listed a range of
roll-up impacted benefits, calculating that the total UE-GE
compensation package is $37.493 an hour
The UE committee took sharp exception to Gilbert’s
inclusion of statutory benefits — workers’ compensation,
unemployment compensation and Social Security — which are not
subject to bargaining. The union also objected to Gilbert’s
inclusion of pension benefits, for which GE has had a zero cash flow
expense since 1987. Although the company makes no contribution to
the pension fund workers do. "At what point do we get credit
for the overfunded pension plan?" asked General President John
Hovis.
UE members also had problems with the company’s
inclusion of overtime costs. The company, not the union, encourages
the use of over time. The company saves money by paying workers
overtime instead of hiring additional workers, the union said.
The union committee wanted to know how the company’s
figures for UE-GE compensation compared with management
compensation. That’s not relevant, the company responded, refusing
to divulge the figures. What about the fact that GE workers produce
$16 profits per hour? We don’t base our wage proposals on profits,
the GE spokesperson said. "The world’s most productive
workers should be the world’s best paid," declared President
Hovis.
Gilbert presented charts comparing GE wage increases
in the present contract with all settlements and with total
manufacturing settlements. The company analyst asserted that the
UE-GE wage differential is the highest it’s been over the Bureau
of Labor Statistics figures for manufacturing in 21 years, and that
GE wages are now 47% higher than the BLS average. The figures showed
a first-year increase higher than most, and second and third-year
results that were not. According to the company’s figures, 45% of
settlements were three years in duration, 39% more than three years.
John Curtin, GE’s spokesperson, said the trends
were worrisome from a competitive standpoint.
Stephen Tormey, secretary of the UE-GE Conference
Board, said that GE, the world’s most successful company, ought to
be embarrassed by comparing itself to other firms in this way.
President Hovis said he was not impressed by the figures, and
reiterated that GE workers deserve higher wages.
Tormey reminded the company that there is another
way of looking at the compensation picture. GE’s total
compensation was $7.835 billion in 1990 and $7.993 billion in 1999.
That’s almost flat, he said — a 0.6% increase in nine years.
Wage increases have been flat for the decade. If Gilbert had used
unit labor costs, GE would have been at the top of that chart. GE
may be willing to pay a little more money, but squeezes more
productivity out of its remaining employees, Tormey said.
"Let’s talk about what a real GE worker
faces," the UE-GE Conference Board secretary proposed. The
average GE worker earns $41,000, based on $19.76 an hour and a full
2,080 hours per year. Assuming a combined 25% rate, federal, state
and local taxes reduce take-home to $31,000. Medical insurance
contributions reduce that to about $30,500. Assuming another slice for
medical out-of-pocket expenses, pension contributions, Long-Term
Disability Insurance, what’s left is a net average wage of
$28,000. That’s just $12,000 from the official poverty line for a
family of four, Tormey observed.
"Unless we have overtime consistently, or
income from second earners, workers supporting families for the most
profitable, the most successful company on the planet have a hell of
a time trying to make it," Tormey said. GE workers may be doing
better than some, as the company says, but GE is doing better than
everyone.
The cost of the stock-option bonus program enjoyed
by 30,000 in management undoubtedly costs several times more than
the cost of all improvements incurred by GE in national bargaining,
the union pointed out. UE members have access to financial data and
know how well managers are doing, commented Betsy Potter, Local 618.
These managers have proven their worth in the marketplace, said GE’s
Curtin. Our members are worth it, too, Potter replied.
Larry Cook, GE benefits manager, returned to make a
presentation on disability and life insurance and other benefits.
Disability benefits are designed to provide an
adequate level of replacement income and assist employees in
recovery, Cook said. The company regards Short Term Disability (STD)
benefit improvements as consistent with employee needs and business
productivity objectives. The UE committee said that while STD
benefits have improved, levels remain inadequate. Workers out on
short-term medical leave "can’t pay bills, can’t eat, can’t
wait to get back to work," said Pat Wotjwicz, Local 731.
Several committee members related incidents of arbitrary company
conduct. Cook admitted that he has not been satisfied with the
performance of the GE benefits department over the past year, and
said that additional staff and more timely payment of benefits have
been implemented.
The Local 506 and 618 representatives had specific
complaints directed against the GE benefits operation in GE’s
transportation division.
Cook detailed the GE life insurance plan, personal
accident insurance, the GE survivor support program, life and
accidental death insurance, long-term care insurance and personal
excess liability insurance. Tormey noted that only 960 GE employees,
the vast majority exempt employees, were taking advantage of the
long-term care insurance as of February 2000. "We’re mostly
not participating because we can’t afford it," he said.
The union committee returned to the issue of
disability insurance, detailing concerns with workers being forced
prematurely to return to work and problems of administration. David
Adams, Local 506, gave the company a real-life example of the
difficulties with the current disability benefit levels.
Representing the union during the second week of
negotiations were General President John Hovis, Conference Board
Secretary Stephen Tormey, Bob Brown and Joyce Sumner, Local 332,
David Adams, David Kitchen and Patrick Rafferty, Local 506, Betsy
Potter, Local 618, Patrick Wotjwicz, Local 731, William Callahan,
Local 751, and Ted Bradley and Nita Gonzalez, Local 1010.
International Representative Chris Townsend represented UE at the
IUE table.
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