|
UE Committee Presses
For Improvements
In Paid Time-Off,
Wages and COLA
NEW YORK, May 21 — In the morning the union committee presented and argued for demands for more paid time-off. The
company indicated it was not interested in agreeing to any improvements in this area, although the company spokesperson
at one point allowed that "things will not be quite as bleak in other areas."
The schedule for Sick and Personal days has undergone only one change since first established company-wide in the
1969-70 negotiations. Steve Tormey, secretary of the UE-GE Conference Board, pointed out the inequity in treatment
between hourly and exempt salaried employees in a supposedly "boundary-less company." On this issue GE fails
to meet its usual goals of "competitiveness," observing that according to Bureau of Labor Statistics figures
released in 1997, the majority of blue-collar and service workers employed by middle-sized and large private
establishments enjoy more reasonable numbers of sick and personal days. Particularly at the lower end of the seniority
scale, the company’s S&P days are "absolutely inadequate" for younger workers and their families, Tormey
commented. Improvement is "way, way overdue," he emphasized.
Ed Baran, Local 751, told the company that at the Niles/Mahoning plants in Ohio, the meagerness of S&P days is
complicated by continuous operations and limited vacation days due to mandatory shutdowns. Workers with medical problems
or who have urgent family needs face real crises, he said. Bob Brown, Local 332, reminded GE representatives that in
recent years when particularly heavy snowfalls closed local roads, the company arbitrarily told workers at the Fort
Edward, N.Y plant to use their personal days. "That’s not fair," Brown objected, especially when a
significant number of workers can’t safely reach the factory. "GE may want to control God and the weather but you
don’t yet," he said. The union committee argued that such management actions violated company policy, which has
held that S&P days be used for legitimate personal business only.
GE spokesman John Curtin responded, "We are not enamored with increasing the amount of paid time-off."
Overall, the company believes it has good paid time-off provisions and is not inclined to make changes, he said. More
paid time-off would represent increased costs to GE businesses, largely by making up absences through overtime.
These problems are of management’s making, the UE committee objected, citing reductions in employment and the
company’s preference for overtime over hiring. Curtin acknowledged, "We operate very lean in our factories. We
are operating close to the bone." Pat Rafferty, Local 506, countered that his co-workers "are running pretty
lean, too." Older workers need greater flexibility in use of S&P days, as do those with young families.
"You’ve decimated our bargaining unit," said Lynda Leech, Local 618, representing non-exempt salaried
workers at the Erie plant. Although salaried workers have more personal days, it’s hard to get the time off, she
observed. Those in the "sandwich generation" are both raising their grandchildren and taking care of aging
parents, Leech said.
"Look at the demographics," proposed President Hovis. Thirty years ago when the present S&P schedule
was first negotiated it was possible for a family to have one breadwinner. Those days are gone, and many workers face
greater family responsibilities. Tormey reminded the GE representatives that the cost of the S&P program was
minimal, representing less than 1% of total hourly straight-time pay in 2002.
The UE committee also argued that S&P days be counted as time worked in calculating overtime payments, the same
as other time-off.
Union members called for a substantial improvement in the vacation schedule across the board. They said that the
company’s record is better with regard to vacations compared with sick and personal days—it’s been only 21 years
since the vacation plan has been improved. Tormey pointed out that particularly with regard to the bottom of the
schedule, company is not particularly competitive. For example (citing the same BLS report mentioned earlier), he said
that after one year, 65% of employees in middle and large firms had between 5 and 10 days of vacation in 1997 (compared
to the five days for hourly employees under the GE contract). GE offers employees a better vacation schedule in other
countries, including Canada. Adding insult to injury, Tormey commented, are the recent vacation schedule increases for
exempt employees, favoring those with less service. Pointing to the number of lower-service hourly employees at Niles/Mahoning
and Erie, Tormey described the company’s vacation policy as "an inequity that’s become more inequitable."
"Even the most expensive equipment breaks down and needs maintenance," said President Hovis. "That’s
true of workers. We’re being worked harder and longer." Improvements in vacation would lower the company’s
health care costs, he suggested. GE is a different company in 2003 than it was in 1982, the last time the company agreed
to vacation improvements, but with "the same old benefits," Hovis said.
The UE committee proposed that vacation time should be extended if for any reason compensable time should occur
during the vacation period, or if the employee is out on illness during the shutdown period. When GE’s Curtin
suggested that this often the company’s policy, Mike Barrow of the American Flint Glass Workers responded, "If
you’re already doing it, why not put it into the contract? It seems insensitive that you wouldn’t do the right thing
automatically."
The union committee also proposed that workers be able to apply vacation to any portion of an absence due to illness,
accident or layoff, without the restriction imposed by contract language currently. UE members also called for limiting
vacation shutdowns to a maximum of 2 weeks and the elimination of split shutdowns, and proposed that workers be allowed
to use vacation time in two-hour increments. With regard to these proposals, union members insisted on the
"flexibility" management is always demanding for itself. Speaking up for the ability to use vacation in
two-hour increments, Frank Fusco, Local 506, offered the example of doctor’s appointments, which can take place in the
middle of the day and seldom involve less than a hour.
GE’s Curtin said the split shutdown is important to management. With regard to the two-hour increments of
vacation, he said the company has difficulty in getting someone to come in for an hour or two to cover, even if it would
be willing to pay the overtime.
The union proposed deletion of the requirement that an employee who has been absent from the job return to work for
at least a month before regaining vacation eligibility. This is an outdated provision, union members insisted.
The UE committee called for a twelfth paid holiday. Here, too, the GE record calls for improvement: there has been
only one additional paid holiday in 30 years, when, at the last minute in the 1997 negotiations, the company agreed to
the Martin Luther King Birthday holiday. UE and GE made headlines with six paid holidays in the 1946 agreement. It’s
taken 57 years to get the other five holidays, the union said.
The eleventh didn’t come easy, and the next is probably not in the near future, said Curtin.
With regard to holidays (Article IX), the union proposed that the two-week rule be changed to four weeks (with regard
to eligibility for holiday pay), and that the requirement to work the day before and after the holiday also be
eliminated. This will cause our benefits people to have heart failure, commented Curtin. "They have to have a heart
first," responded Bob Brown, Local 332.
The UE committee proposed that workers required to work on holidays receive double time and one half, plus holiday
pay. Union members insisted that those who have to give up a holiday receive more than someone working a Sunday.
President Hovis pointed out that this would particularly benefit those in apparatus repair and on continuous operations.
The 17-day cap on military pay differential ought to be scrapped, the UE committee said. The proposal addresses
training duty or encampment that adds up to more than 17 days in a year, union members said. Pat Rafferty, Local 506,
explained that the union’s concern is with mandatory participation, not optional maneuvers—GE workers in the
Reserves or National Guard should not be penalized because of mandatory training or encampments.
Contract language on jury duty pay (Article XXIV) should be expanded to include all government administrative
proceedings, such as National Labor Relations Board hearings, the UE committee proposed. Union members were stunned when
GE’s Curtin responded, "We wouldn’t be interesting in paying employees who are opposing us in a hearing."
President Hovis suggested this response doesn’t say much for GE’s integrity program. Wayne Reynolds of the UAW
reminded the company that increasingly union members are helping to raise their grandchildren, and sometimes that
requires court appearances. In Fort Edward, N.Y., "the PCBs capital of the world," the company has indicated
it would not cooperate as employees are called to participate in a study on the long-term health effects of PCBs, said
Bob Brown, Local 332.
WEDNESDAY AFTERNOON
In the afternoon, UE Research Director Lisa Frank examined GE’s finances in a slide presentation, and the union
made its wage proposals.
The company has been emphasizing "newness," Frank pointed out: the new economic circumstances, its new CEO,
new corporate practices, new business platforms, the bargaining procedures new to the 2003 talks. The company even has a
new advertising campaign, with the theme "Imagination at work." Union members should have new bargaining
expectations as well, Frank suggested. She presented facts and figures on GE’s economic performance that supported
such expectations.
GE’s revenues over the last three years have been only slightly impacted by the recession, Frank pointed out. While
other companies experienced meltdown, GE saw a 3% dip in the size of its revenues in 2001, followed by 5 percent
recovery the following year—led by 8% growth in revenues in its industrial businesses. How sizeable are GE’s
revenues? Equal to 5 days of the United States Gross Domestic Product, Frank said. While the Standard & Poors 500
top capital goods producers saw only a 0.6% growth rate in revenues between 1999 and 2002, GE industrial sales revenues
grew 19%—faster than the GDP of Japan and Germany.
GE experienced no dips in earnings. Instead, the GE bottom line broke the $14 billion barrier for the first time in
2002, Frank observed. GE rapidly turns cash into profits. "The growth in earnings is even more impressive than
growth in revenues," she said. And the company is outperforming other companies in all sectors it does business in.
Manufacturing is a reliable source of earnings. Frank pointed out that operating profits for goods grew 23% over the
life of contract. "GE is very good at getting profits out of its goods producing operations," she said. Frank
noted that the manufacturing profit rate (profit as a fraction of operating costs) in the last two years has broken 40%,
indicating a high level of efficiency.
GE has broken the "robber-baron rate" (25% return on equity) during the contract period, Frank pointed out.
By another measure, each GE worker in manufacturing produced on average $64,630 in profits in 2002, part of a steadily
increase. "What you see is one of the most consistent money-making machines known to mankind," Frank said.
Frank noted that over its history, GE has often used economic downturns as an opportunity for expansion. During the
Great Depression, GE successfully employed two strategies: monopoly pricing, and providing credit to assist strapped
customers. Today GE Credit Corp. is insuring municipal bonds. The company is also taking advantage of lowered stock
prices to buy out other companies. Not surprisingly, GE is consistently hailed by the business press, here and abroad,
as the company most admired in financial and corporate circles.
GE CEO Jeffrey Immelt said in a 2001 letter to share owners and employees: "When the company wins, we all win
together." Frank commented, "It’s important to evaluate whether we are going to win, because we won’t get
it elsewhere in this economic system." In examining how the company allocates its profits, she pointed out that
managers, share owners and employees do not "win" alike.
GE’s stock price has fallen, but dividends have grown by about 50% in the last three years. In fact, Frank noted,
GE has paid out dividends every quarter since 1899. Managers have done well. CEO Immelt’s multimillion-dollar salary
was dwarfed in 2002 by the $6.7 million he gained from the company’s Long-Term Improvement Program. This
achievement-linked bonus recognized GE’s success in meeting three of its four financial goals. "So it’s hard to
understand why the company is projecting only modest increases for hourly workers," Frank commented.
Hourly workers, by contrast, saw little more than 2 percent in wage increases in each year of the current contract,
the UE Research Director said. Over the past four contract terms—including periods of relative prosperity, GE workers
saw wage growth, adjusted for inflation, of 1.6 percent a year. Frank reminded the company that the cost-of-living
adjustment does not offer anything like perfect protection. When prices rise 1 percent, the COLA provides less than 40
percent protection.
Frank challenged GE on its alarm that the company pays 50% more in wages than other manufacturing companies. First,
she said, many of these companies are firms that GE would not compare itself with in any other kind of measure. Further,
she argued that "attracting and retaining" involves more than current wages are and what the market will bear.
After all, with its wealth and power GE helps shape the labor market. Why has CEO pay skyrocketed since the 1980s—was
there really a danger of a CEO shortage?
GE profits per hour per worker have risen steadily in comparison with UE wages per hour per worker, going from almost
half to nearly the same level. This is an extraordinary statement of productivity gains that have not been shared on the
shop floor, Frank said. On the other hand, company employment in the U.S. has declined as profits and revenues have
advanced. "The more productive and profitable we are, the fewer jobs we seem to have," said Frank, pointing
out that "GE is not investing very heavily in domestic jobs."
Hourly and non-exempt total compensation represents a diminishing proportion of company revenues, Frank observed.
Employee compensation as a proportion of company revenues fell by about 50% between 1992-2002, and by 6% over the last 3
years. During the present contract term, GE spent the most money on debt reduction, followed by acquisitions, followed
by dividends, and only then by compensation of U.S. hourly and non-exempt salaried workers. Most of this expenditure
represents a transfer of funds to Wall St., to the economy’s owners, Frank commented.
GE tells us that brutal price wars hem the company in. "I wondered if I was reading about some other
company," Frank said. GE continues to dominate every market it participates it. GE surpasses a long list of
potential domestic and foreign competitors by a number of measures; many of these would-be rivals have seen revenues and
earnings suffer during the recession. The fear of being beaten by competitors is a real example of "imagination at
work," Frank said.
The company’s 2003 annual report was appropriately entitled "Only GE," said Frank, who quoted a letter by
CEO Immelt asserting that what makes GE different is that "in good times and bad we deliver." Frank commented,
if GE prospers in bad times, are they really "bad"?
In response, GE spokesperson Curtin expressed pride in the company’s performance, and suggested that there maybe
fewer jobs, but they are better jobs. GE factories, he said, "are in the business of producing product and that
product provides jobs. It is only through innovation, new product, and areas of growth that we can continue to provide
new opportunities to have jobs. We’re quite proud of our track record. We will deliver in these negotiations
also." In the current environment, there will not be "breakthroughs" or takeaways, Curtin said; "GE
will provide a good offer."
President Hovis said UE members are proud of the company and its products, adding that they are entitled to a greater
share. "Our folks feel they should be compensated better than what they are for what they produce," he said.
The presentation questions company assumptions, such as our wages make the company non-competitive or that we ought
to temper our expectations, Tormey declared. "We’re not going to say we’re doing terribly. But we dispute the
assumption that we should expect anything less than substantial wage increases," he said.
The UE committee proposed substantial general wage increases in each year of the agreement.
Those workers fortunate enough to be employed year-round are seeing a 2 percent annual increase, Tormey said—a
growth rate that would be unacceptable in any other area of the company. A week’s layoff would wipe out the year’s
wage increase, he said. "Many GE workers are in a precarious position," Tormey observed, among them, Niles/Mahoning
workers who were on the job barely half the year in 2002. Once taxes and the pension and medical insurance contributions
are calculated, most GE workers are left with a modest income, he said.
GE’s Curtin suggested, "This is not a time for unreasonable demands or expectations on either party’s
part"—and Bob Brown, Local 332, responded, "I don’t remember a time when we had unreasonable
demands." He added, "we have a lot of people at the lower end," with significant increases in home
heating fuel over the past few years. President Hovis said that given the extraordinary increases in productivity, GE
workers genuinely feel entitled to substantial wage increases.
UE members emphasized that from their perspective, these negotiations are not dominated by one or two key issues. Pat
Rafferty, Local 506, said his local’s survey of the membership placed wages and job and income security issues at the
top, with interest in pensions as well. "We know how much it costs to live," said Lynda Leech, Local 618.
"Our people feel strongly."
The union members emphasized that COLA improvements are a priority. The higher the consumer price index, the less the
GE formula replaces. The COLA offers a 45% recovery rate during its 32 months of operation, and just 39.9% for the
full period. The COLA must be adjusted if it is to have any effectiveness in the future. "Our preference would be
for 100% replacement," said Tormey. "It can’t stay at 39.9%."
The UE committee turned to various wage-related issues. Union members called for: application of raises and a
substantial portion of the existing adder to piecework base rates; payment of average earnings whenever an employee is
taken off his or her regular assignment; a provision that all temporary piecework prices be made standard after a
maximum of six months; and abolition of the extended progression schedule for new hires and shortening of the regular
progression schedules. Frank Fusco and Pat Rafferty, both Local 506, gave considerable evidence as to how pieceworkers
in Erie have experienced a variety of problems that require strengthening of existing language in the national
agreement.
The union committee proposed that annual entitlement of leave under the Family and Medical Leave Act not be reduced
by short-term disability or other forms of leave.
Negotiations continue on Thursday morning, May 22, with company presentations on life, disability and health
insurance.
|
