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UE Opening
Statement
STATEMENT OF JOHN H. HOVIS,
GENERAL PRESIDENT
United Electrical, Radio and
Machine Workers of America (UE)
On the opening of National Negotiations
with the General Electric Company
May 20, 2003
It was a dozen years ago, in 1991, that we in UE first noted that GE so influenced, and in most cases, dominated the
markets it was in, that it had become essentially recession-proof. The performance of the Company during the past three
years has again confirmed this fact. Despite a protracted worldwide recession accompanied and exacerbated by corporate
scandals, terrorism and war, a plunging stock market, and falling consumer confidence and purchasing power, GE has
emerged with its long spree of record-setting sales and profits intact.
Indeed new CEO Jeffrey Immelt has emphasized the Company’s ability to prosper in any economic environment. As he
stated in this year’s Annual Report, "We are a Company that does what few others can do and goes where few can
follow." The figures back up his claim. Not only did GE’s net profits increase by some 32% over the last three
years, but on average each GE employee now produces more than $44,000 a year in net profits for the Company, a figure
which is not even approached by any of GE’s real or imagined competitors.
Nor has the recession in any way tempered GE’s voracious appetite for acquiring other companies. Indeed GE has
taken advantage of the economic slump to make another $35 Billion worth of acquisitions, often at bargain prices, in
just the last couple of years.
Nevertheless, based on past experience, we expect that company negotiators will once again voice their familiar
refrain that the challenges posed by GE’s perceived competition remain formidable. Nor do we expect GE to make
dramatic changes in the way that it has traditionally approached national bargaining, regardless of who may occupy the
chairman’s position.
Accordingly, we come to the bargaining table without expecting that a lot of new ground will be plowed, though we
hope to disturb, if not uproot, tradition in at least a few areas. But we also come here unreceptive to company
proposals that would plow under past gains. Moreover, in light of GE’s unmatched economic performance over the past
three years, we believe our members are entirely justified in their expectations that these negotiations will produce
substantial improvements in the areas that concern them the most.
Despite changes in the bargaining format which have produced an air of uncertainty in these talks beyond what we have
experienced in recent years, we believe that the basic issues before us have not changed very much.
Certainly the UE will not minimize what we have been able to accomplish in past negotiations. On the subject of wages
for example, we make no apologies for what GE workers earn. Why should we when it is indisputable that they are among
the most skilled and productive workers in the entire world? Yet the fact of the matter is those of our GE members lucky
enough to be continuously employed during the last three years will realize only about a 2% per year increase in real
wages over the term of this contract, due primarily to lower than expected levels of inflation.
We believe substantial structural general wage increases are needed to improve the living standards of our members
and to reward them for their role in the achievement by the Company of unparalleled levels of prosperity.
Moreover we place a high priority on improving our current cost-of-living provision which has eroded to the point
where it affords us only about 40% protection against rising prices.
It will also come as no surprise that medical insurance remains a major concern for our members. Indeed this issue
promises to be perhaps the most difficult and contentious one that we face. Despite imposing additional costs on the
membership in every negotiation since 1985, the Company has made it plain that it wants another big bite of the apple,
not only with respect to active employees, but also from retirees.
However, GE workers are increasingly fed up with the idea that those least able to pay should shoulder ever more of
the burden. Thousands of them demonstrated that fact during the two-day national strike in January. With approximately
80% of our members in the Health Care Preferred (HCP), the UE will renew its demand that HCP be negotiated on the same
basis as any other benefit plan, and that it no longer be subject to mid-contract changes. We remain opposed to further
cost-shifting to employees.
We would be at pains to deny that the country is in the midst of a health care crisis. But as the UE has been saying
for over 25 years, the root of the problem lies in our country’s private and increasingly for-profit health care
delivery system. Since GE is a charter member of the health care establishment through its medical systems division as
well as GE Capital, we are not optimistic that the Company will change its long-standing resistance to national health
insurance. Nevertheless we believe it is high time that GE be a leader in the effort to reform the system, rather than a
leader in cost-shifting to employees, a tactic which will do nothing to rein in escalating costs for medical care.
Moreover, our Union will propose a number of improvements to our existing medical coverage including enhancements to
our dental, vision, preventive care, and weekly STD allowances, as well as improvements to the Medical Care Plan for
Pensioners.
Pensions is once again a critical issue in our bargaining, and considering that both you, Mr. Curtin, and Dennis
Rocheleau have indicated that this will be your last set of national negotiations, we expect it is also a subject near
and dear to your hearts as well.
Despite a "perfect storm" of historically low interest rates and the worst stock market performance in 30
years, the GE Pension Fund remains in robust health, overfunded as it is by nearly $5 Billion. Not only has the Company
contributed nothing to the fund since 1987, but GE enjoys a considerable competitive advantage over the many companies
that have had to make sizable contributions to their plans. Indeed because of accounting rules favorable to overfunded
plans, the GE pension has accounted for over $5 Billion in additional profits to the Company’s bottom line in just the
past three years.
But the pension exists to provide retirement security to its participants and not as a company profit center. GE
employees continue to retire on pensions which fall considerably short of providing a decent standard of living.
Accordingly, the UE will propose substantial pension benefit increases in both the career formula and guaranteed tables,
as well as a career earnings update.
GE workers are overdue for a lowering of the voluntary early retirement age below 60, where it has stood unchanged
since 1979. This will not only enable our members to enjoy a few additional years of retirement, but will also open up
job opportunities which are badly needed by our younger members. It’s also high time to scrap mandatory employee
pension contributions.
Our retired brothers and sisters have now gone over three years, and in some cases nearly six years, with no increase
in their pensions, even as their medical and other living costs have soared. Cost of living adjustments for both present
and future retirees are needed to assure the continuing viability of GE pensions after retirement.
During the last three years, our members have continued to be battered by layoffs and work transfers, often
accompanied by hiring freezes. They have justifiable concerns about possible plant closings and plant sales as well.
They wonder where they fit into a GE which describes itself as a "global Technology, Services, and Financial
enterprise". The recent report that Chairman Immelt intends to eliminate GE jobs at the rate of 12% per year, not
counting acquisitions, has intensified those concerns.
Under the circumstances, and mindful of the Company’s burgeoning wealth, our members do not need to hear more
platitudes about job security being "earned in the marketplace". Rather, the UE will propose a variety of
improvements to Article XXIII of our Agreement, including the strengthening of our existing job preservation language.
On the income security side, our members are expecting not only a renewal of SERO and SERO 30, but an expansion of
their rights to retire under these programs, as well as improvements to Income Extension Aid (IEA).
Perhaps no part of our Contract has shown less progress in recent years than the area of paid time off. It has now
been 30 years since the addition of any Sick and Personal days to the hourly schedule. Similarly, GE workers have not
seen any improvements to their vacation schedule in 20 years, and have won just one additional holiday over the past 30
years. To afford a measure of relief from the pressures of constant work intensification as well as to create jobs, UE
will propose increases in all of these benefits.
In addition to the issues of concern we have noted, UE will propose a number of changes to our existing contract
language.
There’s no doubt that we have four weeks of difficult bargaining ahead of us. We face a number of obstacles, not
the least of which is the introduction of a new negotiating procedure for the first time since 1973. Yet we also take
note of Chairman Immelt’s belief that GE’s best days are ahead. We believe it to be only fair and equitable that GE
workers be given the consideration by the Company that will allow them to have a similar confidence about their own
futures.
Tough bargaining with GE is of course nothing new for us, but over the past three decades we have been able to find
enough common ground to resolve our differences without confrontation.
We in UE remain committed to work to extend that record. It will however require much diligent effort on both sides,
and even perhaps putting our collective imaginations to work. Here’s hoping that with a lot of hard work, thoughtful
discussion and perseverance, we can get the job done.
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