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Working In These Times

Monday, May 23, 2011, 12:56 pm

As GE Opens Nonunion Facility in Texas, Union Leader Sees Subtle Threat

BY Mike Elk

Atmosphere tense as contract negotiations begin between company and 15,000 workers

Today, negotiations between General Electric and major unions representing 15,000 workers began in New York City. The GE contract is set to expire three weeks from now.

The negotiating atmosphere is tense, as the company is asking workers for concessions they have vowed to resist. The announcement of the opening of a nonunion locomotive factory in Fort Worth, Texas, a heavily anti-union "right-to-work" state, has made negotiations even tenser.

Five thousand of the 15,000 union members negotiating work at a locomotive facility in Erie, Penn. They are members of UE Local 506, and are considered some of the union's most militant members. When the company previously tried to lay off workers, UE members refused to work overtime until all the laid-off workers were rehired. In 2003, union workers at 16 different GE factories went on strike when the company proposed to cut their healthcare benefits.

Now workers at the Erie facility fear their jobs may be threatened. Two weeks ago, GE announced its intention to open a nonunion facility to make locomotives in Texas. Some see this as a subtle threat to the Erie workers which basically says: If you don't go along with management's demands during contract negotiations, we might move your job to Texas.

As I have reported for Working In These Times before, despite making record profits last year and paying zero in income taxes, GE has signaled that it will ask its workers for major concessions in contract negotiations, including elimination of a defined contribution benefit pension for new employees (a move the company has already implemented for its non-union salaried employees).

Likewise, GE is signaling to the union that it will ask for the elimination of current health insurance plans in favor of lower quality "health saving" accounts, a move the company has already implemented for non-union salaried employees as well.

In addition, GE may ask some workers for a wage freeze. Since the recession began in 2007, GE threatened to close plants in Schenectady, N.Y., and Louisville, Ky., unless workers took wage concessions and adopted a two-tier wage structure. Last month, they also unsuccessfully attempted to impose a two-tier wage system on workers at jet engine facility in Lynn, Mass., in exchange for the promise of new jobs. Members of IUE-CWA Local 201 in Lynn rejected that deal.

Parallel with Boeing?

If GE is trying to make a veiled threat to workers in Erie by announcing a new factory will be built in Texas—as some GE union workers are beginning to suspect—it may have broken the law. The NLRB's controversial Boeing decision and earlier rulings may stand as a precedent.

In the Boeing case, Boeing announced that it was moving work from a union facility in Puget Sound, Wash., to a nonunion facility in Charleston, S.C., because Boeing did not want to have to deal with the threat of “work stoppages” by union workers. 

Last month, NLRB General Counsel Lafe Solomon ruled that the decision to move production to a nonunion facility after a strike violates the ability to strike and collectively bargain enshrined in the National Labor Relations Act. This ruling stands in precedent with a long history of cases showing that threatening to move facilities if workers strike is illegal under the National Labor Relations Act.

“I don’t know if it’s a threat. I am thinking there are a lot of similarities to the Boeing Case,” says Roger Zaczyk, president of UE Local 506. “General Electric announces right before a contract negotiation that they decide to start making what we make here in a right-to-work state. Doesn't that seem kind of strange?”

GE did give assurances to union leaders that as along as GE is producing locomotives they will be making them in their flagship production facility in Erie, Penn. While GE did announce it was going to create 250 new jobs in Erie, the company could have added the 1,000 jobs it will be creating at the non-union Texas site to the Erie facility.

Union leaders claim that the Erie facility has the capacity to handle the extra locomotive work. “We have a lot of room up here. We could at least expand capacity up here” says Zaczyk.  “We could add easily a thousand jobs to this facility with the space that we have here in Erie.”

GE did not respond to requests for comment.

“I can assure you General Electric is watching very closely what the NLRB is doing in this Boeing Case,” says UE Political Action Director Chris Townsend. “This case has far-reaching implications for companies that want to corrode workers’ rights to collectively bargain by threatening to move union jobs to non-union shops.” 

Mike Elk wrote for In These Times and its labor blog, Working In These Times, from 2010 to 2014. He is currently a labor reporter at Politico.

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