GE Appliance Workers Reject Contract Offer From Chinese Owner -- Update
November 23 2016 - 01:26PM
Dow Jones News
By Ted Mann
Workers at the former appliance division of General Electric Co.
rejected a new contract this week, spurning an attempt by its new
Chinese owners to cut costs at a massive factory complex in
Louisville, Ky.
Members of the CWA union voted down the four-year deal on
Tuesday, against the recommendation of union leadership. The
agreement would have lowered wages for new hires at the Appliance
Park complex, cut overtime and triggered buyouts for up to 450
workers.
The deal's failure comes just months after GE Appliances was
purchased for $5.6 billion by China's Haier Group, which was
seeking a larger American foothold for its appliance business as GE
sought to exit from the business. Haier Group, which also imports
appliances such as air conditioners from China, will continue to
use the GE Appliances name for 40 years.
The rejection raises questions about whether the political
climate weeks after Donald Trump was elected president has
emboldened manufacturing workers to stand up to management.
On the campaign, Mr. Trump denounced corporate outsourcing and
pledged to save American manufacturing jobs. He also called for
punitive tariffs on Chinese goods.
Haier's existing U.S. factories and brand will be formally
combined with GE Appliances at the beginning of 2017. GE Appliances
is shrinking its footprint elsewhere. In August, the company closed
a refrigerator plant in Bloomington, Ind.
In an emailed statement, a GE Appliances spokeswoman said the
company was "extremely disappointed" in the rejection of the
contract, which followed 14 weeks of negotiations between
management and the union.
"A workforce that is unwilling to change to improve our
operations and cost position could deter future investments in
Appliance Park," the company statement said. "While it is our
desire to continue to manufacture at the Park, we cannot do it to
the detriment of our customers and the overall business."
GE Appliances says it loses hundreds of millions of dollars
annually at the Appliance Park complex, and has to restructure its
worker compensation to keep costs of its products in line with
competitors.
In lieu of wage increases, the deal would have given workers
$5,500 in three cash payments through 2019 and restructured the
company's contribution to 401(k) plans to more quickly match worker
contributions, according to a summary of the agreement reviewed by
The Wall Street Journal.
"It was a tough contract to try to get passed through the
membership," said Dana Crittendon, head of the local union, which
represents 4,000 of the 6,000 workers at Appliance Park.
Hourly workers were upset the deal included no raises for
existing staff and were angry at the plans to bring in new hires at
even lower pay, he said.
"They felt that it was a disgrace to bring another tier in at
$12 an hour, when here in Louisville on every street corner there's
a sign for temporary jobs paying $14 or $15 an hour," Mr.
Crittendon said.
Mr. Crittendon said he will meet with GE Appliances executives
Wednesday evening in an effort to bring management back to the
bargaining table.
The goal, he said, is to "keep the company competitive in a
tough market -- and also keep the jobs here in Louisville."
A former union official in Louisville said Mr. Trump hadn't been
a factor in this week's vote, though he suggested the
president-elect could be influential in future contract talks. The
official also declined to blame the company's new owners for the
rejection of the deal; most of the management team who negotiated
the agreement had led the company when it was part of GE, he
said.
"This is them -- this isn't Haier," the official said. Workers
rejected the deal because it would have eliminated the chance of a
pay increase for six years until the contract expired in 2020, at a
time when workers have to cope with high health-care deductibles,
the official said. By the end of the deal, he said, "How's anybody
going to have any money left?"
GE Appliances said it would await a union request to resume
discussions on a new contract.
Write to Ted Mann at ted.mann@wsj.com
(END) Dow Jones Newswires
November 23, 2016 13:11 ET (18:11 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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