HIGH TENSION AT GENERAL ELECTRIC
The jousting with labor turns ugly. A strike in June?
A war of words has broken out at General Electric Co. Although the company's labor pacts don't expire until June, angry denunciations already are flying back and forth between Chief Executive John F. "Jack" Welch and Edward L. Fire, newly elected president of the International Union of Electronic Workers (IUE).
Formal bargaining doesn't even start for three months, but both sides already are gearing up for a possible strike. To make matters worse, the IUE's chief negotiator, Dewey Minton, retired in February, leaving no one with close ties to GE. A walkout would be GE's first national confrontation since a disastrous 1969 strike. The escalating tensions have prompted Fire to make a highly unusual plea for assistance from the AFL-CIO, which recently set up a corporate affairs unit to help unions mount public pressure campaigns against companies. GE provides the first test of the federation's ability to employ such tactics in bargaining. "We're trying to develop the internal capacity to help unions that don't do these campaigns themselves," says AFL-CIO Secretary-Treasurer Richard L. Trumka, who is in charge of the program.
Strife at GE erupted last November, when Fire, then the IUE's secretary-treasurer, toppled longtime President William H. Bywater. In his campaign, Fire vowed he would demand job security provisions from Welch like those the United Auto Workers won from Detroit auto makers last fall. Those agreements guarantee a set level of union employment. He also said he would call on GE to remain neutral during recruitment drives at nonunion GE facilities.
SHRIVELING SHARE. Welch reacted like a bull to a red flag. At the annual gathering of 400 GE line managers in Boca Raton, Fla., in early January, he blasted Fire's demands as "not for us in any way." He added: "You better get prepared like you've never been prepared...to operate in a strike and not flinch." Then, as it does every year, GE gave the unions a videotape of the remarks. An outraged Fire shot back an angry letter to Welch, saying he was "stunned by the videotaped comments you made." The union distributed the video and letter at the AFL-CIO Executive Council meeting in Los Angeles in late February. "Welch made a serious mistake talking like that," says Fire. Welch declined to be interviewed.
A strike is possible if neither side backs off on key issues (table). Take job security. Fire, who comes out of an IUE unit of General Motors Corp. workers, says he doesn't see why GE, with record profits, can't match Detroit's job guarantees. This is something the IUE, which represents about half of GE's 38,500 unionized workers, has sought for years as it has watched GE outsource thousands of jobs to nonunion suppliers in the U.S. and abroad.
GE also has expanded capacity and new product lines in nonunion plants, while allowing union ones to shrink. In February, for instance, GE announced plans to move 280 jobs from a unionized steam turbine plant in Schenectady, N.Y., to a cheaper nonunion one in Bangor, Me., and to outside suppliers. The IUE has 45 days to devise a plan to match the costs--or lose the jobs. But the Schenectady site has shrunk from 13,000 to 2,000 union workers since 1971, mostly because of outsourcing.
Such moves are the main reason why the ranks of all 14 unions at GE have plunged by 42% since 1991. Their share of GE's U.S. employment has shriveled from 39% to 25%. The unions haven't been able to stop the process. Instead, they have won severance and early retirement plans for laid-off workers, which GE likely will improve in the current talks. But to Welch, UAW-style guarantees are "crazy demands," as he told managers in January.
Welch is likely to give even less ground on neutrality. GE does not routinely fire union supporters during elections, as many companies do. But it does fight unions aggressively. An in-house unit at the company's Fairfield (Conn.) headquarters, called Personnel Relations, sends union-avoidance experts to locations facing a union drive. They summon employees to so-called captive-audience meetings, where attendance is mandatory and managers attack unions as unwanted "third parties," union organizers say. The unit also shows employees anti-union videos and films.
The IUE tried to get GE to curb these practices in 1991 but got nowhere. Now, Fire intends to try again in talks. The IUE's total membership has plunged by 30% since 1987, to 130,000. It has been broke for some years, and Fire is slashing staff and expenses. To survive long-term, it must begin growing again. Welch, however, believes that GE should tell workers not to join a union. "We don't need some third party to give people voice," he said in January.
PRESSURE POINTS. Fire hopes the AFL-CIO can help loosen the company's grip. On Mar. 11, officials from the AFL-CIO corporate affairs and international affairs units presented ideas for a pressure campaign to local leaders from all 14 unions. The goal: to hit GE's vulnerable spots so Welch will give ground without a strike. Already, one GE union, the Teamsters, filed a proxy resolution in early March challenging Welch's salary. Next, the unions may publicize the plight of GE's thousands of maquiladora workers at the U.S.-Mexico border and GE's practice of shifting jobs to China and Hungary in exchange for market access.
Still, public pressure campaigns can take years to develop. So union officials plan to start as many actions as possible by June. Settle or strike, the unions and GE are in for a rockier relationship than they have had for a long time.By Aaron Bernstein in WashingtonReturn to top