GE Appliances, union reach tentative deal on labor contract - WDRB 41 Louisville News

GE Appliances, union reach tentative deal on labor contract

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GE Appliance Park Zoneline production line, January 2016 GE Appliance Park Zoneline production line, January 2016
Members of IUE-CWA Local 761, led by president Dana Crittendon, rallied ahead of previous contract negotiations in May 2015. Members of IUE-CWA Local 761, led by president Dana Crittendon, rallied ahead of previous contract negotiations in May 2015.

LOUISVILLE, Ky. (WDRB) – GE Appliances and the union representing about 4,000 rank-and-file workers at Louisville Appliance Park have tentatively agreed to a four-year labor contract that includes flat payments instead of raises, a reduced starting rate of $12 an hour and a $20,000 buyout offer for older, “legacy” employees.

Members of the IUE-CWA Local 83-761 will decide by a simple majority vote on Tuesday whether to accept or reject the deal.

The contract – which took 13 weeks to negotiate – reflects the union’s diminished bargaining position as a result of GE Appliances’ sale last summer to Qingdao Haier Co. of China, according to IUE-CWA 761 President Dana Crittendon.

“When you’re dealing with your very first contract, you start from the ground up. In my eyes, it’s a win for us, because we have something we can build on,” Crittendon said. “…It’s not what we want, but we didn’t get everything we want. The company didn’t everything they want.”

For more than 50 years, Appliance Park workers negotiated their working conditions in tandem with other union plants throughout General Electric Co.

This year’s negotiations with the Haier-owned company mark the first time GE Appliances management has been able to hammer out a deal specific to the appliance division.

Kim Freeman, a spokeswoman for GE Appliances, said changes such as lowering the starting wage to $12 an hour – from $15 today – are needed to make Appliance Park profitable and bring its costs in line with competitors.

“It will put us on a more level playing field … the way we operate, our wages, our benefits” she said.

The massive factory in southeast Louisville makes dishwashers, washers and dryers, bottom-freezer refrigerators, air-conditioning units and hybrid-electric water heaters. It loses “millions” of dollars a year, Freeman said, though management has never publicly revealed the park’s financial performance.

If the contract is approved, about 450 “legacy” workers who are at least 60 and earn $25 to $30 an hour will have to decide by Dec. 12 whether to accept the $20,000 offer to retire.

Crittendon said he doesn’t know many will find the offer attractive considering they are already entitled to five weeks of paid vacation and four personal days, with an extra retirement contribution coming in June stemming from GE’s previous decision to eliminate defined-benefit pensions.

The contract creates another “tier” of lower-paid workers with the starting rate of $12 an hour.

In the aftermath of the 2008 recession, the union agreed to lower the starting pay to $13 an hour. It is now $15.  

Freeman said the new workers will be able to move up to $14 within two years, and any further increase would negotiated in the next contract in 2020.

For current workers, hourly pay rates will not change under the new contract, but they will get a flat $5,500 increase paid in installments over the four-year period.

The contract includes other money-saving moves.

Workers have to shoulder a bigger percentage of their healthcare costs.

Overtime will be paid after 40 hours worked in a 7-day week instead of after eight hours in a single day.

And more senior workers will lose the right to “bump” less senior workers from their positions, a practice that, according to management, creates too much turnover and re-training costs. Workers will be able to “bid” for open jobs, however.

The main benefits for workers, according to Crittendon, are that their current hourly pay won’t go down; that GE Appliances will have to negotiate with the union and cannot suddenly shut down the factory; and that GE Appliances will continue supplementing unemployment benefits so that workers earn at least 75 percent of their pay should they be laid off.

Crittendon said Haier was under no obligation even to continuing paying the same wages that GE paid.

“We protected our current employees – their pay scale,” Crittendon said.

The contract also includes a tweak that allows employees to get the company's maximum 7 percent 401-K retirement match without contributing quite as much personally.

Crittendon added that the union was able to stave off management’s desire to bring in new workers through staffing agencies.

Crittendon said management may well raise the $12 hourly rate after seeing how hard it will be to find and retain workers at the lower rate.

“If they think they can get quality workers at $12 an hour, I don’t see it happening,” he said. “I see a big turnover. I see people coming in for a couple weeks until (they) can find something better.” 

Reporter Chris Otts: 502-585-0822.

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