Hourly workers at General Electric Appliance Park in Louisville, Ken., voted down the company’s proposed labor contract Tuesday.
The employees voted by over two-to-one to reject the offer, with 1,005 voting to accept and 2,603 rejecting. The union reported the results late Wednesday morning.
The tentative offer covered hourly workers at GE’s appliance division, recently purchased by China-based Qingdao Haier Co. The 4,000 employees are represented by the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers – Communications Workers of America (IUE-CWA) Local 83761.
GE union president Dana Crittendon told WHAS 11 News the deal was rejected because “They [GE workers] would like to see some raises. The legacy, longtime workers are caught on mostly overtime, you know how overtime pay is going to be calculated and paid, you know where under this proposal, it’s done some changes to the structure.”
The rejection means workers will stay at their current hourly wage rates; longtime GE union employees will stay at $30 an hour.
Qingdao Haier Co. bought the GE appliance operation for $5.4 billion, a deal that was finalized in June. The company has asserted that cost cutting measures must be taken in order to stay competitive. The proposed contract was the first under the new ownership.
The rejected tentative four-year contract decreased hourly wage salaries for future employees and restructured overtime and work rules.
GE released a statement that said, in part, “a workforce that is unwilling to change to improve our operations and cost position could deter future investments in Appliance Park.” The company explained that, “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.”
Under the rejected contract, new employees started at $12 an hour, $3.52 less than the $15.52 that entry-level hires currently make. Instead of a salary increase, workers were offered $5,500 in annual increments starting in January. The company also pledged to invest $90 million into four manufacturing buildings at the Kentucky-facility.
The proposal called for new workers to spend their first year in what was termed a “flexible workforce pool.” Under the pool system, once a regular position becomes available, an employee from the pool would shift over to full-time and would receive $14 per hour and benefits.
The proposal altered overtime payment rules. Currently, employees earn 1.5 times their hourly rate after eight hours. Under the new contract, workers would receive 1.5 times their hourly rate after completing 40 hours in a seven-day work week.
New employees received 50 cents an hour more for working second and third shifts under the offer, which is less than the additional 10 percent that employees hired prior to Jan. 1, 2012, currently receive for picking up evening and overnight shifts. The contract eliminated bumping and increased the company’s 401K contribution.
GE said that the proposed deal would bring its pay and labor practices in line with others in the industry. GE’s Appliance Park is losing money, according to GE spokesperson Kim Freeman. “We desperately need to turn (that) around,” she said, adding that, “This contract is much more in line with our competitors.”
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