Slowing the Race to the Bottom

Multinational Monitor: To what extent has GE moved your members’ jobs out of the United States, and using what mechanisms?
Ed Fire: As is the case with virtually every other multinational with whom we bargain, GE has moved a whole lot of our jobs out of the United States. In 1985, IUE had 46,000 members actively working at GE. Today we have about a third of that — 15,000 to 16,000.
Of the 30,000 jobs lost, about two-thirds of them were transferred to low-wage countries around the world.

GE is the quintessential American corporation that has engaged in what has been referred to as the “race to the bottom” — finding the lowest wages, the lowest benefit levels and most intolerant working conditions.

Ten years or so ago, the ratio of U.S.-based GE employees to non-U.S.-based employees was about four to one — for every GE job that existed overseas, there were four here. By the end of 2000 that ratio had dropped to 1.15 to 1. What it gets down to is that GE has virtually as many workers outside the United States as it has here. When you see their television commercials, you’d think they were the great American corporation.

The honest truth is that we’ve not been as successful as we would have liked at bargaining job security provisions in our national agreement.

The bottom line is, with the active encouragement and backing of our national government through NAFTA and other incentives, it’s been easy for GE to move jobs out of the United States.

MM: What has the job shifting and the prospects of job shifting done to your bargaining leverage?
Fire: We make demands for comprehensive job security.

In the final analysis, a nationwide strike against GE would cause them severe pain. They acknowledge that it would cause them severe pain in terms of their profitability. On the other hand, who’s kidding who? If we go out on strike, our members suffer pain as well. Since 1969, we have not had a national strike in GE.

The company’s position always is, “Don’t burden us with artificial job security measures that we can’t live up to in the agreement, that hurts our flexibility, that causes us to be non-competitive.” They don’t even match what some of the other U.S. corporations have done who are far less successful than GE.

There’s no question that the fact that they keep moving more and more of our jobs out of the U.S. doesn’t help our bargaining position.

MM: Within the United States, to what extent does GE rely on subcontractors as a means to circumvent the union?
Fire: GE philosophically has always been and remains an anti-union company. They have never accepted the union — never in their history. You may have heard the expression “Bulwarism,” which comes from Lemieux Bulware, whose bargaining style was take it or leave it, which was eventually ruled illegal. GE tolerates the union because legally they have to. But in terms of looking at the union as any kind of constructive, positive, or even necessary force within their company, they do not. Jack Welch has told me to my face that he doesn’t think the company needs unions, that they treat the employees well enough. The fact that they resist union organization doesn’t help our bargaining position.

In terms of violating the agreement, for example, on outsourcing, they don’t. They don’t willfully violate the collective bargaining agreement and defy the unions to do something about it. The difficulty is that we need to win stronger outsourcing protection in the agreement.

MM: How would you rate the company in terms of respect for workplace safety protections?
Fire: I believe that they try to fully comply with OSHA.

I don’t see in GE deliberate efforts to evade the legal requirements. If the federal government says, “this is the law,” they do it. They have become so rich and influential that they consider themselves pillars of industrial society in the United States, so they aren’t going to flagrantly violate the law.

What they do, however, is spend a lot of that money lobbying Congress and the administration.

A couple of weeks ago, Welch was on the phone with Bush’s chief of staff about the Honeywell merger deal, and Bush himself made a statement while he was in Europe that he was disappointed that the European Union Competition Commission was giving GE a hard time.

So they attempt to do whatever they can using their political clout.

Obviously, they’re very happy now that Bush and his administration are in office, to influence administrative decisions and influence what the Congress does in terms of enacting legislation. I’m sure they were whispering sweet nothings into Bush’s ear on the ergonomics standard that was overturned from the Clinton administration.

MM: Can you tell us about the IUE merger with the Communications Workers of America and what that will mean for members?
Fire: It holds great promise for us in terms of strengthening our bargaining position with GE and, because of the resources that CWA has, in terms of organizing in GE plants.

Because we had lost over half of our entire membership in the past 20 years, our resources were not what we wanted them to be, particularly in the area of having staff available for organizing.

CWA is a big union, a strong union. They have a huge strike fund, which obviously would be helpful in the event of a nationwide strike against General Electric. They have the resources.

Plus, they have the commitment to organize. They are a very progressive force, particularly in organizing. They have a program called “Bargaining to Organize” with companies like AT&T, Verizon, SBC and Cingular. They have been successful in bargaining for union recognition through card check. That is, if 50 percent plus one of the employees in a particular bargaining unit sign cards that indicate that they want CWA to represent them, contractually the companies are now required to recognize the union. So they’ve done a good job.
We look forward to working closely with our parent union over the next couple of years in going into the 2003 negotiations in a stronger bargaining position.

MM: Do you envision a scenario where GE would recognize card check?
Fire: Today, I think they would say absolutely not. It gets to a question of leverage in bargaining. The fact is, many U.S. corporations have agreed to what we have proposed in the past and will propose in 2003. It gets down to who has what strength at the bitter end.

Certainly that will be an important issue for us as we go into the 2003 bargaining negotiations.

MM: How have you seen GE change over time, especially during the Welch era?
Fire: They got a hell of a lot richer, that’s for sure. I won’t take that away from Welch; obviously he’s increased the value of the company tremendously. I don’t criticize Jack Welch for being a very effective CEO.

What I criticize GE institutionally about is that I don’t think they have given enough consideration to the consequences, particularly the human consequences, of the decisions they make. In my opinion, the decisions are designed too much to increase the company’s profitability at the expense of the employees.

For example, in 1997 we signed the new national agreement at the end of June. Six months later, two of their executives came down to Washington from Connecticut and informed the chairman of our GE bargaining committee and me that that they were closing three more plants, not because those plants were unprofitable, but because they felt that by consolidating operations it would lead to greater profits in the businesses where the plants were located.

They aren’t Simon Legree — they don’t stand over people in the plants and say “work you dogs,” and whip them. They paint a picture of a concerned company — “we bring good things to life” and all that stuff. But in the final analysis, it’s all about the money at GE. I believe they have a syndrome that makes them do better than the last quarter, quarter after quarter. The profits keep going up and up.

In the meantime, they’re doing it with fewer and fewer of the best jobs in America — that is, the union manufacturing jobs.

MM: Do you have any thoughts on how to reverse that trend?
Ed Fire: It depends largely on what we are able to do for ourselves. By working with the CWA, we are going to enhance our bargaining position going into 2003.

We have got to be more effective at developing a worldwide union effort in GE. GE is literally all over the world. We have been able in the past couple of years to establish reasonably good communications with our union brothers and sisters around the world. We have relationships with workers in 25 different countries. They have access to our web site. Our web site is a good communications vehicle.

This last week we had 2,000 hits on it.

We’re working with unions in places like Malaysia, where the workers are going through a terrible struggle just to have their union recognized. The laws in some of these countries are stacked even more against the workers than ours are. So we’re giving support to workers there.

In Scotland, there’s an ongoing organizing campaign, which GE is resisting, at a jet engine plant. We’re trying to support those workers.
Every chance we get, we promote the idea of international labor rights. At the GE stockholders meeting we support resolutions to accomplish that.

The next immediate fight we have coming up is Bush’s effort to get fast track trading authority — what he calls trade promotion authority.

We have to fight on the political front as well. There’s just no question about who is calling the shots these days in Washington — it’s the corporations.

Two days after the election was decided in December, Bush had a summit of business leaders in Texas. Who was sitting next to his chief economic advisor? None other than Jack Welch, the CEO of General Electric.

So what we’ve got to do is strengthen the union’s political clout, as well as what we can do at the bargaining table, working through suchorganizations as the International Metalworkers Federation for eventual worldwide bargaining with this multinational corporation.

MM: Do you see things changing after Welch leaves?
Fire: I don’t know that anyone can predict that. Anyone who comes into a position will attempt to make his or her mark.

I’m sure Immelt will be different from Welch in some respects, but when it’s all said and done, Welch has done so well in terms of increasing the value of GE, particularly the return on investment for the stockholders. Why would Immelt want to do anything different?

Moreover, why would the board of directors permit him to do anything different?

MM: So you project more of the same?
Fire: I think so. I don’t base that on any special knowledge I have, but it’s the old cliché: If you look at it in terms of making money, why fix something that’s not broke? They are for all practical purposes a moneymaking machine. So why mess up the gears?