Working In These Times
Why Did the United Electrical Workers Make Concessions to GE?
Last week, the United Electrical Workers (UE) ratified a contract with General Electric as part of the 11-union Coordinated Bargaining Committee (CBC) contracts. The contract contains a modest wage increase for current workers and improves pensions for some of the older workers at General Electric. However, the contract does offer a number of concessions, including replacing guaranteed pension benefits for new hires with 401(k) plans, and a higher deductible health insurance plan.
Speaking on the need to agree to concessions, UE President John Hovis, in a blunt assessment of the contract, said: "While the proposal contains important improvements and advances, it also contains certain disappointments. However, given the current economic climate, overall it's an agreement we can support."
(Full disclosure: My father Gene Elk is an international representative with UE and was a member of the bargaining team that negotiated a contract with General Electric.)
Some within the CBC were quick to denounce the contract. “There are clearly some improvements in areas like pensions and disability pensions (improvements will not apply to New Hires) for current members and sick and vacation time improved for certain "years of service" brackets," IUE-CWA Local 201 Business Agent Ric Cassili wrote in a letter to his local’s membership. “But these gains are overshadowed by the "reset" of our pension and benefit packages—partially impacting current members now and totally impacting our next generation of new hires. If WE do not stand up for the "new hires"—who is going to?"
Some argued that agreeing to a plan that cuts pensions for new hires would make new hires unlikely to stand up for older and retiring workers on issues like pensions. Indeed, GE promised in a letter that it would not attempt to go after the workers’ pensions for the next eight years—a sign many organizers took to mean that GE intends to go after pensions for all hires in 8 years.
“It is only a matter of time (likely in 8 years), that the "second class" GE member will be the majority of the current members and thus our current members aged 18-52 will see GE attempt to freeze their Defined Benefit Pension Plan as the majority will not be in it or care about it,” said Cassili. “It will also lead to a "second class" of members that will not care about pre-65 or post-65 health insurances of those of us that retire, as they will not have it and we will be blamed for giving it away for them.”
Indeed, some labor observers were surprised that UE would agree to such a concessionary contract. UE has gained a reputation for being one of the toughest, most militant unions in the country. UE lead the occupation of Republic Windows and Doors in 2008 and more recently tried to get the town of Taunton, Mass., to declare eminent domain in order to stop a factory from closing. In addition to its militancy, the union has traditionally been known for its commitment to rank-and-file democracy and its responsive attitude to its members, symbolized in UE capping the salary of all union officials at $56,000 a year.
Why, then, would even such union agree to a contract that essentially sold away pension rights and perhaps solidarity with a whole new generation of young workers?
General Electric agreed to pay all of its 15,000 workers a one-time lump sum of $5,000 dollars. For many workers behind on mortgage and credit card bills, it’s very difficult to turn down $5,000 dollars in cash.
UE leaders say that they were unable to create more political leverage with the White House to pressure General Electric. During contract negotiations, one UE leader spoke to high-level United Food and Commercial Worker staff members and multiple members of the AFL-CIO executive council, asking them to persuade AFL-CIO President Richard Trumka and UFCW President Joe Hansen not to attend a June 13 meeting of President Obama’s Jobs and Competitiveness Council chaired by General Electric CEO Jeff Immelt as a protest of GE’s pushes for concessions. (Hansen and Trumka are members of the 26-person council.)
The UE leader, who spoke only on condition of anonymity, said he believes his requests were passed on to Hansen and Trumka, and that other union leaders involved with the GE negotiations had contacted the AFL-CIO seeking public support for their bargaining efforts. Trumka didn't attend the Council meeting, sending AFL-CIO Policy Director Damon Silvers in his stead, because he was attending a political fundraiser in Pennsylvania. Hansen attended the meeting. Neither labor leaders publicly criticized GE's push for concessions, missing a possible opportunity to create political leverage over GE, says the UE leader.
The 'lesson to be learned'
Finally, what power did UE have? Strikes in the United States are considered very high-risk propositions with little chance of success. Workers would have risked being permanently replaced at their jobs had they gone out on strike, as U.S. labor law allows companies to replace workers if the National Labor Relations Board rules that their strike was an economic one.
With over 15,000 workers scattered among 80 different locations and 11 different unions, a strike would have been difficult to coordinate and build support for among their members. UE President John Hovis chided several other unions in the CBC for not preparing adequately for a strike.
While UE members were reaching full-blast volume in their workplace actions, a similar growing trajectory of momentum occurred at only a handful of CBC locals. While GE did give ground on a number of issues in the face of the spirited fightback mounted by UE locals and certain other CBC locations, the difficult economic climate, as well the uneven organizational state of the CBC unions, convinced us that the prolonged, unified strike that would be necessary to move GE further on the key issues of medical insurance and new hires’ pensions was unlikely to be carried out successfully.
As labor's power weakens, even old militant unions like UE are having a more difficult time maintaining their militancy in an effort hamstrung by political inaction, decaying union structures, legal barriers to striking and a harsh economic reality. The tale of UE being forced to make concessions offers a cautionary tale for all in organized labor.
“If there is a lesson to be learned from these negotiations, it is that we must continue to increase our efforts at membership education and mobilization in the entire GE chain, in the face of what will surely be difficult dealings with GE in the future," says Hovis. "The next round of bargaining in 2015 may seem to be a long way off, but the time to begin preparing is now."
Editor's note: This story was updated on July 8 to clarify the anonymous UE's leader's efforts to convince Trumka and Hansen not to attend the Jobs and Competitiveness Council meeting. He spoke via union leader intermediaries, rather than directly to the AFL-CIO president and UFCW president. The UE is not a member of the AFL-CIO.