How Wabtec’s Contract Proposals Will Affect All Erie Workers

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In its communications to Erie Workers, Wabtec has given a one-sided presentation that doesn’t give a full explanation of how their contract proposals will negatively affect all Erie workers over a four-year contract.  Here are some of the company’s proposals and how they will negatively affect all Erie workers:

  • Two-Tier Wages – The company’s proposal will slash the average wage by $12.16 per hour, saving the company more than $51 million over a four-year contract. The company has not given the Union an economic justification for this huge wage reduction outside of its ongoing threats. Current Erie workers, who are laid off and exhaust their recall rights, and are rehired by the company, will be hired at the two-tier wage rates.
  • Job Classifications – The company’s proposal consolidates the current 33 job codes down to 21 new job classifications, endangering the safety of Erie workers. The company’s proposal will also cause current Erie workers in ten job codes to lose pay if they move for any reason after the first year.
  • Management Rights – The company will be able to do just about anything it wants, without negotiating with the union, including “the unqualified right to establish and enforce minimum standards of production and quality for all operations and job functions in the Erie Plant. In the event an employee’s production or quality is below such standard, the Company reserves the right to transfer or discharge the employee and replace such employee with some other employee who can maintain minimum standard production.”
  • Subcontracting – The company shall have the unlimited right to subcontract…any work at the Erie Plant that has previously been performed by subcontractors.” In other words, the company will be able to subcontract everything and not bargain with the Union over its decision.
  • Temporary Workers – The company “will have the unqualified right to utilize temporary workers to perform production and maintenance work during the term of this Agreement provided there are no qualified bargaining unit employees on layoff and the temporary workers do not exceed ten percent (10%) of the bargaining unit workforce.” Why will the company want to hire new employees if it can use temporary workers?
  • Layoff and Recall – The company’s proposal will greatly limit seniority rights for bumping and recall purposes. Recall rights are also capped at three (3) years for employees with more than twenty years of service; two (2) years for employees with ten or more years of service; and one (1) year for employees with less than ten years of service.
  • Job Vacancies – Seniority will be the last determining factor taken into consideration for job bidding. In other words, the company will be able to pick who they want for job vacancies.
  • Hours of Work – The company’s proposal would permit the company to implement continuous operations schedules, including (12) hour shifts, on any manufacturing, maintenance or warehousing operations.
  • Vacations – Vacation eligibility is capped at five (5) weeks, except for employees who currently have six (6) weeks.
  • Personal Illness Pay – Employees will only be eligible for twenty-four (24) hours of personal illness pay per calendar year, which may not be carried over from year to year. Any personal illness pay not used in the calendar year will be forfeited.  Employees are expected to give 24 hours’ notice prior to utilizing personal illness pay and the company reserves the right to require medical documentation.
  • Income Extension Aid (IEA) – The company rejected the Union’s proposal for IEA and has not proposed one-year of protected benefits. Laid-off employees will lose their health insurance benefits at the end of the month that they are laid off unless they pay the total costs of their health insurance benefits.
  • Severance Benefits – The company’s proposal will greatly reduce the amount of severance benefits available for Erie workers in the event of a plant closing. The company’s proposal will limit the amount of benefits to one week for each year of completed service with the company, up to a maximum payment of twenty (20) weeks of severance allowance.
  • Medical Leave – The company’s proposal will require employees to use their paid illness days and any accrued vacation for approved FMLA leaves of absence for any reason other than their own occupational or non-occupational illness or injury. In other words, if you have to take off to care for a sick family member, you will have to use your paid illness days and vacation time.
  • Grievance and Arbitration Procedure – The company’s proposal is a greatly weakened procedure that undermines Erie workers’ protections and rights. The company is under no obligation to settle grievances and could force every grievance to costly arbitration, which they know the union will not be able to afford. The company’s proposal will also not permit the right to strike after exhausting the third step of the grievance procedure.
  • Union Representatives – The company’s proposal will undermine the union’s organizational strength on the shop floor and limit the stewards’ ability to represent the members.
  • Safety – The company is proposing to eliminate elected safety coordinators and replace them with bid positions, compromising the hugely successful safety program.

The Union has proposed a new highly competitive wage proposal which could save the company more than $130 million in reduced labor costs over the four-year contract while protecting current Erie workers’ wages and jobs. The Union’s proposal will also give new hires a path to the legacy wage rates. The proposal also includes job guarantees that the company must recall all laid-off GET employees in order of their seniority and create 400 new additional jobs over the four-year contract.

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Wabtec Negotiations Update 5-17-2019

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Due to the active support of the UE membership, the company withdrew several of their concessionary contract proposals this past week in negotiations, including mandatory overtime, reductions in overtime premium pay and an undefined work week. However, the company’s other new counter proposals on recall rights, personal illness time and vacation time are at reduced rates that our members had under the GE-UE National Agreement. The Union intends to offer counter proposals to address these shortcomings in upcoming negotiations.

Despite the Union repeatedly rejecting competitive wages, Wabtec is still insisting on lower, two-tier wage rates for new hires, including former GET employees who haven’t been recalled. Under the company’s proposal, current Erie workers, who are laid off and exhaust their recall rights, would be rehired as new workers under the lower, two-tier wage rates. The company has refused to offer a new wage proposal for current Erie workers since its first wage proposal when negotiations resumed in March. The company also rejected the Union’s proposal on Income Extension Aid (IEA) this week.

Even though the company paid out nearly $120 million in bonuses to GE and Wabtec executives after the merger, the company is demanding huge concessions that will negatively impact our members and our community. When asked by the Union why the company needs these concessions, the company’s answer was this is what they promised their Wall Street investors and large shareholders. Apparently, Wabtec wrote a check for GE Transportation that it expects our members to pay.

The Erie plant has been profitable under the terms of the GE-UE National Agreement, which Wabtec is seeking to destroy. Wabtec is realizing an additional $17 million in annual cost savings from the elimination of the defined benefit pension and retiree health insurance for Erie workers, which it refuses to acknowledge.

UE members are willing to work with Wabtec to bargain a fair contract that will keep the company profitable and good jobs in Erie, but as our members demonstrated earlier this year, we’re not willing to sell out future generations of Erie workers.

The next negotiation sessions are scheduled for May 20, 21, 23 and 24. The Union will continue to provide our members with updates. Your continued support will determine the outcome of these negotiations.

More info: “Like” UE Local 506 on Facebook or visit our website www.uelocal506.com

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BULLETIN 4/26/19

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Representatives of UE Local 506, UE Local 618 and the UE National Union met with Wabtec’s negotiating committee during the week of April 22 - 25. The two sides continued to exchange proposals - both economic and non-economic, but there is little progress to report.

The company is insisting on lower, two-tier wages for new hires and laid off GET employees - if they’re recalled, without offering an economic reason for this demand and other than the threat that they can get the work done somewhere else.

New hires and laid off GET employees are not the only workers facing lower wages under the company’s economic proposals. Current employees’ wages could be reduced after one year, if they move for any reason – bidding, exercise bumping rights or recalled from a permanent layoff – under the company’s proposed lower Tier 1 wage rates.  If current employees lose seniority for any reason, they would be rehired at the Tier 2 wage rates.  In addition, current employees, who have the 10 percent shift differential, would lose the 10 percent shift differential if they move to 1st shift and then move back to an off-shift.

The company is still insisting on mandatory overtime. In addition, the company would reduce overtime premium pay by making overtime pay only for hours worked in excess of 40 hours in a regular workweek. The company is proposing to eliminate the defined workweek, which is currently defined as Monday to Friday inclusive. In other words, the company could schedule you to work Tuesday to Saturday, or Wednesday to Sunday. The company is also proposing to have the ability to put any area of the plant on a continuous operations schedule.

The company is proposing to reduce our members’ paid time off by capping the amount of vacation an employee can earn to four weeks, unless you currently qualify for five weeks or six weeks of vacation. The company is also proposing eliminating Sick and Personal Pay. Any unused sick and personal pay will be paid out in the first regular payroll period in 2020.

The company’s Management Rights proposal would basically allow the company to do just about anything it wants at any time, including the “unqualified right to establish, modify and enforce minimum standards of production and quality for all operations and job functions in the Erie plant.” If an employee’s production or quality is below such standard, the company “reserves the right to transfer or discharge the employee and replace such employee with some other employee who can maintain minimum standard production.”

The company’s Union Representation proposal would greatly restrict the union’s ability to represent our members at work. The company is also insisting on maintaining its grievance and arbitration process and eliminating our right to strike, which will weaken our members’ rights and protections on the job.

As you can see, this is not just about two tiers.

The next negotiation sessions are scheduled for May 7, 13, 14, 15 and 17. The Union will continue to provide regular updates for our members. Your continued support will determine the outcome of these negotiations.

For more info: “Like” UE Local 506 on Facebook or visit our website: uelocal506.com

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April 16, 2019 Wabtec Negotiations Update

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Negotiations are wrapped up until following the Easter holiday.  Minor adjustments were discussed but no major agreements have been reached since our last Bulletin.

We continue to work toward reaching a multi-year contract agreement on behalf of our 1,700 members, their families and our communities. As always, each element is discussed with you during our membership meetings and the position of the membership is represented at the negotiating table.  The Members Run this Union! Please join us on Thursday at your membership meeting.

Our negotiating team is working in earnest toward a transparent contract that secures a healthy wage, workplace and quality of life for all members of the highly skilled workforce acquired by Wabtec and responsible for quarter after quarter of record-setting profits GE and its shareholders.  We remain willing to negotiate economic and non-economic elements of the contract, and to helping Wabtec negotiators understand the relative importance of each element.  

Negotiations are complex and difficult, but we believe that there is a viable solution that maintains Wabtec’s competitiveness, and that both sides can come to a fair agreement that includes worker protections, safety and quality-of-life, as well as wages commensurate with the skill-level of advanced manufacturing workers.

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Wabtec Negotiations Update

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Representatives of UE Local 506, UE Local 618 and the UE National Union met with Wabtec’s negotiating committee during the week of April 1 - 4. The two sides continued to exchange proposals - both non-economic and economic, including wages, job codes, job bidding, union representatives and stewards, paid time off, working hours, holidays and temporary transfers. Since the end of the strike/lockout we have met ten times, but the two sides still remain far apart on the issues that caused the strike/lockout. Negotiations will resume the week of April 9 - 11.

When we resume negotiations, we will have 56 days left to reach an agreement before the 90-day interim agreement expires on June 3rd. We have made it clear throughout negotiations that our members will not accept:

  • Two tier wages
  • Mandatory overtime
  • Changes in overtime pay
  • Changes to the work week
  • Reductions in paid time off
  • Weakening seniority rights
  • Temporary workers
  • A new grievance and arbitration procedure
  • Undermining union representation

Wabtec knew what it was getting when it bought/merged with GE Transportation – a business which has consistently posted double-digit profit margins. With the elimination of the defined benefit pension and retiree health insurance, Wabtec is already realizing a $16 million annual savings. Wabtec doesn’t need any additional concessions from our members to make the Erie facility more “competitive.” Our members’ skills and experience in locomotive building are second to none and they should be compensated as such.

For more info: “Like” UE Local 506 on Facebook or visit our website: uelocal506.com

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UE-GE EFFECTS BARGAINING AGREEMENT

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EFFECTS BARGAINING AGREEMENT

This Effects Bargaining Agreement is made and entered into this February 24, 2019, by and between the General Electric Company (“Company”) and the UE (“UE” or the “Union”).   

W I T N E S S E T H:

WHEREAS, the Company has sold its GE Transportation business (“Transportation”) to Wabtec effective upon the date such transaction closes (the “Closing Date”), which is currently set for Monday, February 25, 2019;

WHEREAS, the Company and the Union have bargained fully and in good faith regarding the effects of the sale of the business on Transportation employees currently represented by the Union; and

WHEREAS, the Company and the Union have reached an agreement over such effects bargaining;

NOW THEREFORE IT IS AGREED:

This Effects Bargaining Agreement sets forth the full and complete agreement between the Company and the Union regarding the effects of the sale on employees represented by the Union.  The Company and the Union agree that no further bargaining will be required on these or any other subjects that could have been raised in effects bargaining. 

  1. The Company and the Union agree that this Effects Bargaining Agreement contains all benefits, terms or conditions that were agreed upon as a result of the bargaining relating to the sale of the Transportation business. 
  1. This Effects Bargaining Agreement (or “Agreement”) covers only those UE-represented employees that are employed in the Transportation business and that

transfer to Wabtec with the sale of the business and close of the transaction.

  1. Closing Payment
    1. Paragraph 3 Eligible Employees:  All current UE-represented Transportation employees as of the Closing Date and who were scheduled under the sales agreement to transfer to WABTEC on the Closing Date (or eligible to transfer later if on leave of absence on the Closing, if and when they transfer).  Employees who are on inactive status due to layoff as of the Closing Date, or who otherwise separated from the Company (including termination, resignation or retirement) as of the Closing Date, are not eligible for the Closing Payment. 
    2. As soon as practicable after the Closing Date, a Closing Payment of $350.00 (three hundred fifty dollars), less applicable withholdings, will be paid in a lump sum to all Paragraph 3 Eligible Employees. 
    1. The Closing Payment will be taxable.  It will not be treated as creditable compensation or earnings for purposes of the GE Pension Plan, the GE Retirement Savings Plan or any other benefit plan or program.
  1. Third Accelerated Cash Payment for Those on LOA:
  1. Paragraph 4 Eligible employees:  All current UE-represented Transportation employees who were eligible but did not qualify for the Third Accelerated Cash Payment (“ACP”) under the 2015-19 GE-UE National Agreement because they were on a Company-approved leave as of January 14, 2019, but who after the Closing Date have a right to remain on leave and to reinstatement pursuant to an applicable law or regulation, and who are released to active work and transition to active employment with WABTEC on the next scheduled work day after the expiration of the leave and that transition date is not later than June 23, 2019.
  1. Payment:  Paragraph 4 Eligible Employees will receive the Third ACP ($2,250), less applicable withholding, within 21 days after transitioning to active employment with WABTEC.    
  1. Third Accelerated Cash Payment for Those Who Return from Layoff by Close
  1. Paragraph 5 Eligible Employees:   All UE-represented Transportation employees who were eligible but did not qualify for the Third Accelerated Cash Payment (“ACP”) under the 2015-19 GE-UE National Agreement because they were on layoff as of January 14, 2019, but who before the Closing Date are recalled to employment with GE Transportation.
  1. Payment:  Paragraph 5 Eligible Employees will receive the Third ACP ($2,250), less applicable withholding, within a reasonable period of time after being recalled to work with GE Transportation.      
  1. Preferential Employment:
  1. Paragraph 6 Eligible Employees:  All UE-represented Transportation employees who have transferred to active employment with Wabtec under the transaction sales agreement and who thereafter are permanently laid off by Wabtec before June 23, 2019, shall have the right to participate in a special GE Preferential Placement Program under this Agreement up until June 23, 2019, under the following terms:
    1. Paragraph 6 Eligible Employees will be provided a process (“GE-Wabtec Preferential Placement Program” or the “Program”) by which they can indicate a preference for hiring into up to six (6) GE US facilities that participate in the GE Company Preferential Placement program.   
    1. “Preference for hiring” under the Program means that the Paragraph 6 Eligible Employees (and other participants in this Program) will be given preference over the hiring of applicants “from the street” but will be second in line to any GE Company Preferential Placement participants who apply through the program for the same job.  Thus, the preference order will be: (1) GE employees impacted by a job loss who participate in the Preferential Placement Program; (2) Former Transportation employees who transfer to Wabtec, are subsequently laid off before June 23, 2019, and who are offered and choose to participate in the GE-WABTEC Preferential Placement Program:  (3) Applicants from the street.
  1. Further rules for this new program will be drafted and issued by the Company generally in line with the election and selection process in the most recently negotiated GE-UE National Agreement (with the understanding that the alternative preference order, effective dates and maximum number of potential sites in this Section will apply).   The non-election/selection provisions of the GE-UE contractual preferential placement process will not apply to those former Transportation employees using Preferential Placement under this provision, including those provisions providing IEA, severance or any other benefits, visit/relocation assistance, recall rights, or educational assistance.   
  1. The program will end on June 23, 2019, and any Paragraph 6 Eligible Employee waiting for a job opportunity through the program upon the end of that day will be removed from the program at that time.   However, if GE agrees to re-up the GE Preferential Placement Program after June 2019 negotiations with its other unions, the GE-Wabtec Preferential Placement Program under this Section will continue until March 1, 2020 – with the understanding that Paragraph 6 Eligible Employees must be impacted by a Wabtec layoff by December 31, 2019 to be eligible and that any Paragraph 6 Eligible Employee waiting for a job opportunity through the program upon the end of the extended program deadline of March 1, 2020, will be removed from the program at that time.   
  1. Special Supplement For Long-Service Group
  1. Paragraph 7 Eligible Employees:  All UE-represented Transportation employees who are participants in the GE Pension Plan, are age 59 as of February 24, 2019 and will attain age 60 no later than April 23, 2019, have at least 25 years of Pension Qualification Service as of February 24, 2019, or will do so pursuant to this agreement - and who transfer to Wabtec, or an affiliate of Wabtec, in connection with the Transportation sale on the close date.   
  1. Paragraph 7 Eligible Employees shall have their initial days of service performed for Wabtec or any Wabtec affiliate through April 23, 2019, treated as Service for the Company for the limited purpose of determining whether the Eligible Employee meets the eligibility conditions for receiving the Special Supplement set forth in Section VI.6 of the GE Pension Plan (the “Special Supplement Eligibility Conditions”). 
  1. Such treatment shall only apply for purposes of applying the Special Supplement Eligibility Conditions.  The other terms for receiving the Special Supplement shall not be affected by this Paragraph 7.    
  1. Such treatment shall not apply to increase any benefit accruals under the GE Pension Plan, nor shall such treatment apply in determining Pension Benefit Service or for any other purpose.
  1. Such treatment shall not apply to a transferred employee who withdraws his or her pre-1989 employee contributions in accordance with the GE Pension Plan before retirement.

WHEREFORE, the parties have caused this Effects Bargaining Agreement to be executed by their duly authorized representatives effective on the day and year written below.

For GE Company: For UE:

_________________________ _____________________________

Name:  ___________________ Name:  _______________________      

Date:   ___________________ Date:    _______________________

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Wabtec Negotiations Update

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Representatives of UE Local 506, UE Local 618 and the UE National Union met with Wabtec’s negotiating committee during the week of March 26 - 29. The two sides continued to exchange proposals - both non-economic and economic. While we reached tentative agreement on a couple of non-economic proposals, the two-sides remain far apart on the issues that led to the strike, including two-tier wages, code consolidation, mandatory overtime, overtime pay, subcontracting and the use of temporary employees, and the grievance and arbitration procedures. Negotiations will resume the week of April 1 – 5.

GE-UE Effects Bargaining Agreement

The UE negotiating committee finalized the effects bargaining agreement with GE on March 27. The agreement includes:

  • A $350 lump sum closing payment (minus taxes).
  • The Third Accelerated Cash Payment (ACP) for UE-represented employees who were on layoff as of January 14, 2019, but were recalled before the February 25th closing date, and UE-represented employees who are on approved leave and return to active status by June 23,2019.
  • All UE-represented employees who have transferred to active employment with Wabtec and who thereafter are permanently laid off by Wabtec before June 23, 2019 shall have the right to participate in the GE Preferential Placement Program.
  • Any UE-represented employees who are participants in the GE Pension Plan, are age 59 as of February 24, 2019 and will attain age 60 no later than April 23, 2019, have at least 25 years of PQS as of February 24, 2019 will be eligible for the Special Supplement of the GE Pension Plan.
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BULLETIN: Negotiations Update 3/13/2019

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On March 12, 2019 the UE 506 and 618 negotiating committees met with Wabtec negotiators. This was the first negotiating session since the parties were able to reach an interim agreement on March 6, 2019. During the first session of negotiations the committees exchanged proposals and found common ground on a number of noneconomic contract issues. We will continue to work hard on coming to a fair and  equitable agreement for both parties.

The 90-day interim agreement that governs our working terms and conditions has been posted on the UE Local 506 website.

Prior to negotiations, UE representatives reported several incidents of irresponsible and disrespectful treatment of members and union representatives on the shop floor. Since our return to work, there have been multiple reports of members, stewards and the executive board members harassment, intimidation and total disregard for safety. We are addressing these issues.

Our top goal is always the safety and well-being of our members, so please be aware and remain on high alert to any danger in you work surroundings, and that of your coworkers.  Three members have been injured since returning to work on Monday—this is why we take work conditions so seriously.  Unnecessary work injuries are unacceptable, and Wabtec’s lead negotiator has committed to addressing our concerns.

Many members are also reporting unnecessary disciplinary actions since returning to work.  If you are in a discussion with management that could lead to discipline you have the right to request representation (Weingarten Rights). If you would like to file a grievance you can request to speak to your steward. If you are unreasonably denied please notify your Chief Steward on your break. Once the hall is notified, we can address these issues with HR as they arise.

WEINGARTEN RIGHTS: "If this discussion could in any way lead to my being disciplined or terminated, or affect my personal working condition, I respectfully request that my union representative or steward be present at the meeting. Without representation, I choose not to answer any questions." Download this Negotiations Update as a PDF file for printing

Strike Settlement

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This STRIKE SETTLEMENT AGREEMENT (“Agreement”) reached the 6th day of March 2019, between WABTEC CORPORATION (“Company”) and the UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA (UE) and its LOCAL UNION NOS. 506 and 618 (“Union”) (the Company and the Union are sometimes collectively referenced as the “Parties”), includes the following terms and conditions:

On behalf of its members, the Union agrees to terminate its strike and return to work subject to the terms of the March 6, 2019 Memorandum of Agreement (the “Interim Agreement”) and this Agreement.  No compensation will be paid by the Company for any time not worked due to participation in the strike.

On or before 6:30 AM on Monday, March 11, 2019, the Union will remove all tents, chairs, signage, barrels, pallets, firewood, garbage and other debris from the exterior of the Company’s Erie Plant.

Employees will return to work beginning at 6:30 AM on Monday, March 11, 2019.  Employees will be reinstated to their pre-strike job classifications and shift assignments without loss of seniority.  By close of business on March 8, 2019, the Company will provide a list of employees for whom no work is immediately available.  These employees will not be required to report for work but will be placed on temporary layoff subject to the payment of Income Aid Extension benefits.

For those employees who are enrolled in medical, dental and other welfare plans sponsored by Wabtec, the Company will retroactively reinstate their coverage under these plans effective to Tuesday, February 26, 2019.  For employees who have not yet enrolled, Wabtec will provide retroactive coverage under the Company’s medical, dental and other welfare plans as long as such employees enroll prior to March 28, 2019.

Except for two employees identified by the Parties who will receive disciplinary suspensions, the Company will take no disciplinary action against any employee for any strike activities.  Further, both the Union agree that there will be no reprisals against, or discrimination towards, any employee, bargaining unit or otherwise, based upon his/her participation or non-participation in Union activities.  Nothing in this Agreement shall be construed to waive any pre-existing agreements between the Union and the Company requiring the Union to reimburse employees for strike-related property damage.

The Parties agree that the Company’s officers, directors and managers, and the Union’s officers, executive board, stewards and employees, will limit public comment regarding the Interim Agreement and this Agreement to a joint statement regarding the strike settlement agreement in the form attached as Exhibit A.  Upon execution of this Agreement, the Company will send this joint statement (on behalf of both Parties) to all news outlets in Erie and select outlets in Pittsburgh that have covered the Parties’ labor dispute.  The Union will simultaneously post the joint statement on their website.

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March 6 International Day of Action Against Wabtec’s Corporate Greed

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On Social Media

  • Download this sign ("_____ Supports UE 506 & 618 Strikers #Solidarity4UE") and print
  • Write your name or organization on the top part of the sign
  • Take a selfie or group photo holding the sign (or multiple signs), and post on social media with the hashtags #Solidarity4UE and #EndCorporateGreed
  • On Twitter, please tag the company (@WabtecCorp)
  • Add this frame to your Facebook profile picture

At Wabtec HQ

If you can make it to Wilmerding, PA (just outside of Pittsburgh) on March 6th, there will be a solidarity rally at 3pm at the intersection of Westinghouse Avenue and Station Street. Join striking members of UE Locals 506 and 618 from Erie, PA, together with members of UE Local 610 who work at Wabtec in Wilmerding, to send a message to Wabtec Headquarters: our communities need family-supporting jobs! Members of 506 and 618 are on strike because Wabtec imposed new working conditions after purchasing the plant from GE, including mandatory overtime, wage cuts of up to 38% for newly hired and recalled workers, and using temps for up to 20 percent of the work. Show your support in this fight for the rights of all workers to stand up to corporate greed by joining us in Wilmerding! RSVP on Facebook here

Wabtec Proposed Wage Reductions Will Negatively Impact UE Households, Pennsylvania Economy

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Executive bonus packages dwarf wage reduction impacts on Erie economy

CONTACT Scott Slawson: 814-899-3108

(February 28, 2019) ERIE, PA As 1,700 hourly workers remain locked out of the Wabtec plant in Lawrence Park, Pennsylvania, an economic impact study by nationally recognized firm, Parker Philips, shows the negative economic impact the proposed wage reductions would total about the same amount as Wabtec Chief Executive Officer, Raymond Betler’s corporate merger bonus package. 

Upon completion of the merger with GE transportation, a $16 million payment will be made to its CEO, Raymond Betler, and over $43 million in compensation to 19 other executives.

For the purposes of the analysis, Parker Philips examined a potential dip below currently contracted wages at 30%, 40%, and 50% for new hires/rehires. An analysis of the 466 call backs currently being negotiated, show that proposed wage reductions of 40% would result in a loss in direct and induced wages of $17.1 million, 82 more local jobs, and a ripple effect of $11 million in economic loss to the economy. 

If Wabtec has enough money to reward over $120 million to executives at its company and General Electric, it damn well has enough money to honor the existing union contract with workers in Erie, Pennsylvania,” said United States Senator, Bernie Sanders. “What is happening in Erie is the continuation of corporate greed pure and simple. Our job is to end Wabtec’s greed and make sure the company treats its workers with respect and dignity.”

This analysis shows that one person’s treasure is entire region’s tragedy,” said Scott Slawson, President U.E. Local 506. “Unless Mr. Betler plans to spend his entire bonus package in Erie County, these proposed wage cuts would be a major hit to our local economy—particularly small businesses fueled in part by the hard-earned wages of Erie’s extraordinary skilled labor force.  This report further fuels our resolve to stand up for our local economy and working families across the region”

“Our analysis shows that the wage cuts under discussion are relatively small compared to the total economic output of Wabtec,” said Nichole Parker, Principal Partner, Parker Philips. “An analysis of the wage reductions clearly demonstrates that UE 506 workers and the local businesses that they support will bear the brunt of any wage cutbacks.”

Sectors impacted include the service and retail sector, healthcare, wholesale trade, and transportation. While the majority of job losses occur in the railroad manufacturing sector, the loss of wages and spending power of jobs transferred will ripple throughout the entire Pennsylvania economy. 

The full report can be downloaded here or viewed at www.parkerphilips.com.

Upon closing on Monday, Wabtec executive vested in several different stock-based compensation products, including options, restricted stock, restricted stock units, and performance units.  The former two are essentially shares which are now vested, whereas the latter two will be settled in cash "as promptly as possible,” according to merger documents. 

The chart below was compiled by United Electrical Radio & Machine Workers of America and calculates the awards presuming Wabtec's stock trading at $97.07.

----MORE----

Name

Aggregate Value of Unvested Wabtec:

Total Value

Options

Restricted Stock

Restricted Stock Units

Performance Units

Executive Officers

Raymond T. Betler

$748,145

$4,130,329

 

$11,260,120

$16,138,594

Patrick D. Dugan

$262,231

$2,693,693

 

$4,076,940

$7,032,864

Stéphane Rambaud-Measson

 

 

$3,824,558

$5,241,780

$9,066,338

David L. DeNinno

$216,318

$2,892,686

 

$3,300,380

$6,409,384

Scott E. Wahlstrom

$122,825

$1,226,965

 

$1,863,744

$3,213,534

Albert J. Neupaver

$443,245

$3,793,010

 

$9,318,720

$13,554,975

5 Other Executive Officers

$149,682

$1,021,468

 

$2,300,559

$3,471,709

Non-Executive Directors

Philippe Alfroid

 

$157,253

 

 

$157,253

Robert J. Brooks

 

$157,253

 

 

$157,253

Erwan Faiveley

 

$157,253

 

 

$157,253

Emilio A. Fernandez

 

$157,253

 

 

$157,253

Lee B. Foster, II

 

$157,253

 

 

$157,253

Linda S. Harty

 

$157,253

 

 

$157,253

Brian P. Hehir

 

$157,253

 

 

$157,253

Michael W.D. Howell

 

$157,253

 

 

$157,253

William E. Kassling

 

$157,253

 

 

$157,253

TOTAL

$1,942,446

$17,173,428

$3,824,558

$37,362,243

$60,302,675

#####

Download the Economic Impact Study here

Bulletin 2-27

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RUMOR PATROL

There were erroneous news reports that contract negotiations would begin today.  If interim agreement were reached, we would have begun contract negotiations today.  That did not happen, and there are no negotiations scheduled at this time. 

BROTHERS & SISTERS,

Please remain disciplined and respectful on the picket line. Keep supporting your fellow workers, keep checking in for communications updates, and keep talking to your families.  We encourage you to bring your friends and families to the picket line.

Countless families, retirees, and community members are dropping food, coffee, hand warmers, and more.  Thank a neighbor tonight for supporting us.

UE supports businesses that support union families.  Here are just a few who dropped off food today. If you know of more, please let your Picket Captain know:

  • Irish Cousins
  • Tim Hortons
  • Intergalasstic Art  
  • Little Ceaser Pizza
  • The Bean 
  • Jack Frost Donuts    
  • Erie Fire Department
  • LP Fire Department
  • H&H Shingle Savers
  • Presque Isle Wineries 
  • Lords Company Employees
  • The Red Foxx
  • All in Your Home HealthCare
  • Zach Langer, Pfeffer Insurance
  • Andy Pius Tree & Stump
  • Junk Luggers
  • Local Girl Scouts 
  • PA United, Erie County
  • Bob Evans
  • Yum Yum’s Pizza
  • Firehouse Subs 
  • Larson Products
  • The Bean in North East 
  • Eric Walter Tree & Stump Removal   
  • Pius Tree Service

CEO’s are Ripping Off Working Families

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U.S. Senator and presidential candidate Bernie Sanders released a video yesterday supporting our strike, stating “The fight that they are fighting in Erie, Pennsylvania is a fight that reflects the needs of millions of workers throughout this country.” Sanders wishes UE members “the best of luck in their struggle” and urges Wabtec to come back to the table and “treat their workers with respect and dignity.”

Why You Should Care About the Wabtec Strike

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Local author Cyndie “CJ” Zahner published "the first in a series of blogs about the Erie, Pennsylvania wage dispute" yesterday:

If you are a blue-collar manufacturing worker in Erie, you should be concerned about the Wabtec/GE strike. The outcome of this labor dispute may eventually affect you.

Here’s how GE labor relations affected Erie in the past:

My Husband as an Example

Jeff worked as a journeyman toolmaker in Erie at a livable wage for years. When the owners of manufacturing companies in town banded together to control wages and, in some cases, alleviate overtime costs, Jeff’s pay raises and overtime stopped. We had three children in college at the time, so Jeff applied to and accepted a job at GE as a second-shift, press-brake operator in the hope overtime would be available to help pay our mounting college costs.

That year, GE hired hundreds of Erie workers. Smaller Erie manufacturers lost much of their skilled labor to them. In an attempt to keep some employees, those Erie manufacturing companies had to step up their pay increases and benefits. In doing so, they kept some employees from going to GE.

Fast forward a few years. GE is no longer hiring. In fact, they have laid some of those workers off.

Now those same manufacturers have the ability to fall back to their nickel-and-diming ways. So, some did. No need to take the scaling back to prior ways personal. This is Basic Supply and Demand 101.

Read the whole blog post on cyndiezahner.com

Bulletin 2-26

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Brothers and Sisters, the solidarity among our UE family is unmatched. Your resolve to stand united in support of family sustaining jobs is honorable and brave—we salute you. Keep supporting your fellow workers, keep checking in for communications updates, and keep talking to your families. 

HERE’S WHAT YOU NEED TO DO

  • FILE: Please file for unemployment today. This is a lockout.
    • LOG ON: www.uc.pa.gov
    • Click File an Initial Claim
    • Follow step-by-step filing instructions
    • REASON FOR SEPARATION: Strike/Lockout
  • SIGN UP: If you haven’t signed up for a picket shift, call your chief steward and sign up for a picket shift now.
  • COMMUNICATE:  Check in with your Chief Steward, Picket Line Captain or your Steward. Check the website, or Facebook for updates. If you would to receive updates via email please got to www.uelocal506.com and CLICK the MEMBER SIGN UP button. 
  • ASK FOR HELP: As an employee of Wabtec, your benefits include access to the Employees Assistance Program (EAP). You can call EAP at any time for any reason at 877-234-5151. It is a completely confidential resource. Feel overwhelmed?  Call 2-1-1 and somebody will be there to help you, whatever you need.

HERE’S WHAT YOU NEED TO KNOW

1. We are fighting to maintain current wages and working conditions in the plant while we negotiate a new contract. A contract that GE considered acceptable and profitable.  It’s demoralizing and unnecessary.

2. Wabtec assertion that our wages are too high “for that region” is an insult to every person living in Erie County. This is not just about our jobs—this is about the future of our local economy, our community and family sustaining jobs across America.

3. Wabtec is not poor—and the Lawrence Park plant under the current collective bargaining agreement has been highly profitable every quarter for years. Wabtec is a profitable company that is expected to bring in nearly $8 billion this year – doubling its revenue as a result of the merger. They had enough money to provide over $120 million in payments to executives at Wabtec and GE, including a $16 million handout to Wabtec’s CEO.

Download this bulletin as a PDF file (for printing)

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Dear Erie labor and community leader, On February 25th Wabtec is scheduled to take over the GE Transportation Erie facility. We have been in negotiations with the company for over a month. The proposals the company still has on the table will destroy wages, benefits, and working conditions that have taken Erie workers and their local unions, UE Local 506 and UE Local 618, over 80 years to develop. Wages and benefits which helps to provide our community with a solid tax base and decent living standards and millions of dollars in profits to GE. Wabtec is attempting to destroy these living standards and put even more profits it in the pockets of the executives and shareholders. We build some of the finest most durable locomotives in the world. Wabtec’s destruction of Erie wages and conditions have absolutely nothing to do with making the locomotive facility more successful. In fact, based on the history of huge concessions forced on workers by corporations and the gutting of standards in our communities across this nation, their actions will do just the opposite. We will not let that happen and ask for your solidarity and support. If there is a strike, we ask that you not cross our picket lines and withhold any support to the company for their operations. We, also, ask that you call or email Raymond T. Betler, Wabtec’s CEO at 888-264-0011 or rbetler@wabtec,com and tell them they should agree to a fair and equitable contract for Erie workers. Also, please stop by the picket line and offer your support and solidarity to our members. To see the latest developments, go to UE Local 506 Facebook page. Thank you for your time and your support. Together we can build a better Erie. In Solidarity, UE Local 506 UE Local 618

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UNION BLASTS GE ANNOUNCEMENT OF MORE JOB LOSSES In response to GE's announcement yesterday of its intent to take more work out of the Erie plant, UE Local 506 issued the following press release: Thursday, July 27, 2017 Local 506 of the United Electrical, Radio & Machine Workers of America (UE), the union representing production and maintenance workers at the Erie GE plant, is expressing anger and a sense of betrayal at GE’s July 27 announcement that it plans to move international locomotive production out of Erie to Fort Worth, Texas, at a cost of 575 Erie jobs. Local 506 President Scott Slawson said the union feels betrayed by the company’s announcement. Despite previous rounds of layoffs in Erie since GE opened the Fort Worth plant in 2012, the union has worked with the company to secure the existing jobs in the Erie plant and improve the plant’s performance. “We’ve been working very closely with them for the past year and a half to improve quality, efficiency, delivery. Our efficiency is up to triple what Fort Worth’s is in the locomotive business, and it’s still not enough for them. Slawson added, “Last November we signed a Job Preservation Agreement with this company in an effort to not just preserve jobs but preserve the future of Erie. That agreement was signed in good faith and ratified by a vote of our membership. We were led to believe, by the company, that this was going to secure the future in Erie. Yet here we are, eight months later, being handed a transfer of work notice that basically says, we like what you’ve done but too bad.” Slawson questioned the wisdom of the company’s decision to concentrate locomotive production in Fort Worth, a plant whose performance has lagged far behind Erie’s. “Our efficiency in Erie has risen and been maintained. The latest figures we’ve seen indicate that efficiency percentage in locomotive production in Fort Worth is in the lowest of all GE Transportation plants, while Erie’s efficiency is more than double Fort Worth’s.” He also noted that when GE began operating the Fort Worth plant four years ago it described it as an “overflow” facility, auxiliary to the Erie plant, but that GE has now betrayed those commitments. The company, in Slawson’s view, is obsessed with pursuing cheap labor to the detriment of all other considerations. He said the Fort Worth plant has a high rate of employee turnover because of low wages. Workers are leaving GE Fort Worth and finding union-represented jobs at much higher pay. Slawson thanked U.S. Senator Bob Casey (D-PA) for his statement criticizing GE’s actions. Earlier Thursday Casey issued a statement saying GE had “turned its back on Northwestern Pennsylania and the workers who have made its company a success,” and calling the company’s actions “insulting”. Casey added, “The skilled, experienced workers in Erie have done everything that has been asked of them, only to get slapped in the face by GE over and over again.” National union officials of UE and of Local 506 plan to meet in the coming days. “We’re meeting with our leaders and members in Erie to review all options for fighting this outrageous attack by GE,” said Gene Elk, UE’s Director of Organization, one of its three national officers. Elk added, “The Erie GE plant has been in operation for more than 110 years. Generations of Erie workers, their families and the entire community have worked hard and sacrificed to build this company, and GE has made billions of dollars in Erie.” Elk noted that as recently as the 1970s GE employed 20,000 people in Erie, manufacturing a variety of products, but the company had steadily downsized the plant by removing one product line after another. “Each time it eliminated another Erie business, GE assured the workers and the community of its ‘commitment to Erie’ and that the remaining jobs would be retained,” said Elk.

7-20-16

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Any members who are having issues with TAA or TRA can go to Building SB3 at the former hammer mill site tomorrow 7/21/2016 between the hours of 8:30am and 12:00pm and also between the hours of 1pm and 2pm. There will be people there to help you. ( I wasn't told you needed to bring anything, but if I was you, I'd bring everything)