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GE Opening
Statement
Opening Day Remarks by
GE Negotiator John Curtin
GE-UE Negotiations
Sheraton Hotel
New York City, NY
May 20, 2003
Welcome to the first day of GE-UE contract negotiations.This is my second opportunity to serve as GE’s lead
negotiator with the UE at the national level. I am honored to be here again and fully aware of the days of hard work
that lie ahead of us.
Mr. Hovis, Mr. Tormey, welcome and congratulations on again leading the UE committee. Your opening remarks made both
your commitment to your members and your grasp of the issues facing us abundantly clear.
Welcome also to the representatives from other CBC unions joining the table for this negotiations. Many of the faces
at this table are the same as in recent years. And so are many of the issues. But the environment in which we negotiate
has changed dramatically. And we also face a major change in how these meetings will proceed. After nearly thirty
years of moving from the "big table" to the "small table" in the final days of our discussions, this
year we will negotiate at this table from start to finish. The old system had served the company and your members well,
with ten consecutive contract ratifications that improved the economic and working lives of GE employees Let’s work to
make sure this new system also yields a negotiated package that is responsive to union members, good for other affected
GE employees, and also maintains the competitiveness of GE’s diverse businesses.
Earlier, I said the environment for these negotiations had changed. In the three short years since we last negotiated
a national contract:
- GE has a new chairman, who is leading the company through a prolonged national economic downturn from which we are
not immune.
- Unemployment levels have gone from the lowest in decades to the highest in the past eight years.
- The dot-com fueled boom has ended, taking with it many jobs, a lot of investor confidence, and big chunks of some
workers’ retirement portfolios.
- The economy is still feeling the repercussions of the September 11 attacks. Excess capacity in most industries
means the competition for available business is fierce.
In this environment, it’s no surprise that inflation, the traditional enemy of real wage growth, has remained low.
So while our meeting in this hotel is the same and so are many of the participants, the world outside has changed
dramatically since our last national negotiations. That fact will color our discussions in coming days.
I’d like now to briefly cover our current views on some of the issues that will be the subject of our discussions
for the next several weeks. These include healthcare… retirement income…compensation… job and income security…and
the term of the contract. As I’m sure you are aware, we want to work with you to develop a four-year contract. Among
its many levels of appeal, it will provide more stability for both parties and reduce both the cost and planning that is
inherent in the current three-year cycle.
Healthcare is a topic that will occupy a great deal of our time, as it should. It’s a matter we can all relate to
on a very personal basis. On average, GE employees pay about 19% of the cost of their health care, compared to employees
at our competitors who pay about 30% of the cost of care. While GE offers health care coverage for its eligible
retirees, many firms we compete with do not offer or are eliminating retiree coverage. Those that do offer it charge
about five times more for coverage than GE.
GE has healthcare plans that are among the best in industry. But double-digit increases in health care costs, coupled
with modest increases in employee cost sharing, have knocked the employee-company cost-sharing ratio out of whack. That
was the reason for this year’s increase in Health Care Preferred co-pays and the reason we need to look at similar
changes to GE Medical Benefits as well as changes in contribution levels for both plans. We are obviously aware of this
winter’s strike and the emotional nature of this area. We also know that equitable cost sharing is key to the
competitiveness of GE businesses that in total expect to pay $1.6 billion this year for employee and retiree healthcare
coverage.
In regard to retirement income, GE continues to provide both a defined benefit pension plan and the Savings and
Security Program with a 50% company match on employee contributions up to 7%. These two plans, combined with Social
Security and other personal savings, are providing career employees with a good level of replacement income and the
opportunity to retire as early as age 60 with unreduced pensions.
Three years ago, some of our discussions zeroed in on the $25 billion surplus in the Pension Trust. By the end of
last year the increase in Plan obligations and decrease in assets had reduced this figure to $4.5 billion. That may be a
cautionary tale, but this decline will not alter our focus on enhancing pension benefits to provide competitive levels
of retirement income to career employees. Nevertheless, it reminds us to do it responsibly to maintain secure pensions
for current and future retirees.
In terms of pay, your members did very well during the term of the contract. Three general increases and six
cost-of-living hikes increased an average member’s pay by about 13%, versus a rate of inflation estimated to be about
6% for the contract term. Today, the average straight-time pay rate for UE production workers is more than 50% above the
average hourly earnings for production workers as reported by the Bureau of Labor Statistics. The fact we are paying
significantly more than average is born out by low attrition rates and the fact we have no trouble attracting employees
when there are openings. Our position well ahead of the pack, low inflation rates, and the tough business climate will
be key factors in our discussion of future wage increases.
In the area of Job and Income Security, we will carefully consider the cost and effectiveness of SERO as we look
ahead. But we will also continue to seek ways to preserve existing jobs and improve the competitiveness of our
businesses. Your union has been in the forefront of taking advantage of existing contract provisions to save jobs. In
Erie, Local 506’s aggressive use of job preservation committees has been especially effective. Last year, when
management in Erie announced a proposed transfer of work, the Local’s job preservation committees went to work,
ultimately reducing number of jobs transferred by about 80%.We look forward to learning more about your experiences and
refining creative approaches in this important area.
That’s all from me for today. We have a big job ahead of us.I am confident of my team, as I am sure you are of
yours. Let’s work together and keep the focus on the thousands of UE members who are not in this room. If we do that,
we should reach an agreement that we can present to them with pride.
Thanks for listening.
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