GE GE Aerospace

By Thomas Gryta 

General Electric Co. workers voted against a new four-year contract, surprising the conglomerate and union leaders who had negotiated the agreement last month and likely sending them back to the bargaining table.

While a majority of total votes cast were in approval of the contract, numerous local unions voted against the deal. Under the union's rules, there was enough of a protest vote to reject the contract.

"We will be contacting GE to notify them of the results. GE's obligation to bargain continues," said the IUE-CWA, the biggest union that led the negotiations. The vote was thrown into confusion late Tuesday as some local unions celebrated an apparent rejection while union leaders and lawyers determined the next steps.

The contract, negotiated by a group of 11 unions covering about 6,600 workers, sought to maintain a labor peace as the struggling conglomerate restructures its operations. The union-represented workers are in various industrial divisions, including aviation, health care and power, in facilities across the country.

While union leaders endorsed the deal in Cincinnati last month, members in some local groups were openly upset about the terms of the deal, including higher health-care costs. The workers contend that they have sacrificed a lot in recent years and that GE's leadership has mismanaged the company.

In a statement late Tuesday, the IUE-CWA said 53.2% of votes were for approval of the contract and 46.8% were against it. But the rules that govern the union group require that votes are counted by location, as measured by a simple majority. If a site votes to reject the deal, that means that the vote of every local union member is counted as a rejection. On that basis, only 44.2% of the votes were for approval and 55.7% were against the deal.

GE said it is working with union leaders to evaluate their options. "We strongly believe the contract is a good package for employees, and a majority approval vote of IUE-CWA membership reflects that," the company said.

The contract is being watched by more than just the members of the union because some GE nonunion sites follow the terms of the agreement, including changes to health-care benefits, at many sites, according to union officials and nonunion workers.

The rejection is a surprise after the contract easily passed four years ago with an 84% margin of victory.

Leading up to the vote, some members campaigned against it on social media, while GE sent numerous emails and bulletins over the last two weeks highlighting the terms in a positive light.

On Monday, the IUE-CWA, the industrial division of the Communications Workers of America, posted on Facebook that members shouldn't "listen to rumors in the shop or on social media," noting that official information would come in leaflets or meetings.

The previous agreement expired in late June but both sides agreed to extend its term while the tentative contract was ratified.

The agreement includes several hourly wage increases over four years and comes as the sprawling company is selling off pieces of itself. Four years ago, the same union talks covered about 16,500 workers, but GE has since sold its transportation division and its appliance division.

Under Chief Executive Larry Culp, the first outsider to lead GE, the company is also in the process of separating its oil and gas business and a major portion of its health-care division. Meanwhile, GE's once-reliable quarterly stock dividend has dwindled to a penny per share.

The company incorporated its challenges in its labor negotiations by pushing to cut health-care costs and adjust benefits.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

July 10, 2019 14:14 ET (18:14 GMT)

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