Labor Relations
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Introduction:
Labor relations depict the process in which firms and organization manage their unionized employees. The process involves consideration of the bargaining strategy adopted for each organization or company with respect to employees’ well-being. Employee unions formed serve as vessels of facilitating collective bargaining on behalf of employees- irrespective of the outcomes of such bargaining processes. The bargaining process involves union representatives and company or organization management representatives.
According to Cray (n.d), General Electric (GE) Company is one of the companies that specialize in the manufacture of electrical equipment, household appliances, and lighting products. In addition, the company owns NBC broadcasting network. GE ranks the second in the world with reference brand and market capitalization and is a successful conglomerate organization. The company is publicly traded and employs approximately 315,000 employees.
GE Labor Relations History:
In 1918, World Industrial Workers staged a significant strike at GE during the 1st World War. However, militancy upsurge was short-lived. GE, like other companies, established welfare capitalism in 1920s, as a strategy of discouraging independent unionization. The former president of GE, Gerard Swope, confined to the American Federation of Labor (AFL) that GE would accept the organization on the conditions that the company shifts from craft basis to industry (Cray, n.d). On contrary, AFL had no room for permitting GE to operate on an industry basis. As a result of this, GE formulated work-sharing plans and granted the employees loans. However, the measure adopted by GE was not sufficient to address the issue effectively.
1930s had the characterization of widespread unionism in the industrial sector. This escalated in 1936 when United Electrical and Radio Workers Union were created. During this year, GE accepted UE request for a representation at the company’s major facilities and consequently UE managed to ensure that GE was well organized. After the war, UE advocated for wage improvements, but the Cold War climate rendered UE to attacks as a result of Communist Party influence within the union. UE eventually was expelled from the organization after it failed to pay CIO dues and receiving tremendous raids from other unions. This led to the formation of Union of Electrical, Radio, and Machine Workers (IUE).
Despite the overthrow of UE by IUE, both unions formed cooperation to gather the power to confront GE effectively. This was a necessity in 1950s when GE adopted Boulwarism labor relations policy. However, the two unions began implementing the cooperation in 1960s, and after an overwhelming strike series, the unions managed to convince GE soften the limitations towards labor relations. Nevertheless, the unions’ achievement went to a loss in 1980s when Jack Welch (the chief executive then) adopted a strategy of employee layoff as a means of the company restructuring. This resulted in shutting off majority of unionized plants and work transfer to plants that had not yet adopted unionization measures. Despite the fact that GE status was beyond unprofitability, the company demanded benefits and wage concessions for workers under unions whose jobs were not terminated. In 1991, there was national contract negotiations that beard no fruits since GE workers lost confidence on the negotiated contract. The negations had considerations of increasing wages and granting workers medical benefits. These negations saw to it that medical benefits improved while wages became modest.
Welch put into practice a similar labor-squeeze policy, in 1985 at NBC when GE acquired the network. In 1987, GE management demanded the key concessions of the contract talks from National Association of Broadcast Employees and Technicians (NABET), which stimulated a walkout of 2,800 union members. After 17 weeks, NABET called off the strike after missing to win a single concession from the company since a replacement of the striking members took place from NBC. As such, NBC attained the power of hiring for jobs previously performed by regular staff members. In addition, employee layoff continued due to introduction of robot cameras in the network. A delegate’s convention, in 1988, found that GE had an inherent characteristic of weakening unions and depressing workers wages. The management system adopted by GE depicts that the company uses fear of job and stress of employees as a strategy of efficiency and productivity improvement. Moreover, retirees from GE claim that the company has reduced their pensions significantly through the use of accounting gimmicks. GE has also developed the reputation of employee discrimination. This discrimination has a basis on the race of employees. For example, in 1991 GE declined acceptance of a black machinist.
In spite of the inherent constant strikes, GE maintains a constructive contractual and statutory relationship with employees in all its global operations (GE Citizenship, n.d). The employees have representation structures in the form of trade unions, representative bodies, labor unions, and work councils. The employee representative structures take into consideration of the applicable laws within the countries in which they operate. GE grants employees freedom of collective bargaining and association with adherence to the existing local laws.
In United States, GE had negotiations, in 2007 for a four-year National Agreement. The negations involved two of the largest GE’S members union. IUE-CWA being the largest union represents 8,200 GE workers at forty-nine primary locations of the company. On the other hand, UE represents approximately 2,500 workers within eleven locations of the company. Terms and conditions of operation for these two unions, found application in smaller United States unions, which represented smaller groups of GE Company workers.
Settling of the problems:
Union workers strike was the key step that employees engaged in order to settle the problems they faced while working at GE. These strikes had negative repercussions on the employees since in many instances employees would find themselves falling as victims of employee layoff. On the other hand, the unions were at a perfect competition. As such, some unions would raid other unions in order to gain the power to control the company. For example, IUE raided UE in order to manage the workers of GE. Consequently; workers from UE on strike would find replacement from employees under the IUE union. This depicts that resulting into an action of strike is not long-term solution for problems that occur in an organization or a company.
On the other hand, GE would engage in adopting measures that discourage the formation of unions by the workers. This had an effect of weakening the union powers to get involved in the worker relations contract negotiations. GE engaged extensively in dialogues to seek for a change of operation from craft basis to industry that had no fail. As such, GE would use fear of job loss for the employees and stress as measures of solving problems. This led to inefficiency of problem solving within the organization.
GE Company would also adopt work-sharing plans as a means of solving the inherent workers problem within the organization. In addition, the company would avail loans to the employees as problem-solving technique. However, not all these measures were successful since workers would still result into a strike action. The strikes fostered the company to consent to workers representation request at the company facilities. However, GE played a hard line and declined to accept consequential organization of the company. This led to some unions like UE and IU realizing a need of cooperation in order to confront the company effectively. GE had the characteristic of adopting labor policies for workers relations and declined to engage in any form of negotiations with the workers representatives. As such, GE appeared as a company that dictated what the employees would have to perform, rather than engaging in a dialogue for consultation purposes. The dialogue would have helped the company in identifying the ills within its relations with the workers.
GE management adopted the style of employee layoff as a measure of company restructuring. An example, is when Jack Welch, the chief executive officer, in 1980s eliminated jobs as part of company restructuring measure. In the same period, most of the plants were shut down and the work shifted to regions in which plants were not unionized.
GE adopted Boulwarism as a bargaining strategy that was a violation of the legal considerations (Holley, Jennings, & Wolters, 2009). In this GE’s approach adopted for bargaining had similarity to the product marketing strategy. Whereby, a research on desires of the workers and competitive position of the company would take place, and the results presented to the union during the bargaining process. During the bargaining process, GE would stick to the research results unless the union representatives would offer new information concerning the issues, which according to the company view, the union could not provide. GE management claimed the bargaining strategy was effective since the company’s bargaining position had a base on facts generated after careful examination of the problems. In addition, the company maintained that the approach eliminated time wasting that would result if collective bargaining took place. Moreover, during the negotiations, GE would make the union representatives feel that they are the key causes of not reaching into a consensus. As such, the union had to conceptualize the company’s offer as the most reasonable and fair (Berry, Gould, & Staudohar, 1986).
Improvement of CBA:
GE Company bargaining strategy had an element of inefficiency and limitation of achieving the desired results from the negotiation process. As such, there was a need of the company adopting an effective means of collective bargaining. One of the key measures that GE would have adopted as a means of improving the bargaining process would be providing initial proposals free of company’s resistance (Holley, Jennings, & Wolters, 2009). The proposal for the bargaining process should have a room for alteration, rather than being rigid. This would have changed GE bargaining technique of being hard during the negotiation process with the union.
GE should have adopted a bargaining strategy of conceding at a slow rate, the bargaining positions established. In addition, both parties should have demonstrated a desire of commitment to the bargaining process. Moreover, the bargaining process would have been effective if the negations took place in an open manner. This would have involved clarification of each party’s interest, minimization of any form of emotional outburst, asking questions that would trigger gathering of information concerning the other party interest, and identifying, as well as agreeing on merits of each bargaining proposal.
The union representatives had labeled GE company management has one that hard negotiation strategy during the bargaining process. As such, GE would have changed the bargaining strategy to eliminate development of un-trust levels from the union representatives. This would have aided in development of respect and mutual trust between GE company management and the union representatives. In addition, union representatives should have scheduled marathon bargaining sessions. These sessions would aid in weakening the company’s management resistance, as well as concentration levels. Time pressure is an effective tool that would have aided in the scheduling of the marathon bargaining sessions. The effectiveness of this lies on the fact that an agreement would have being sort hurriedly to eliminate any possibility of lockout or strike deadline being reached.
Brainstorming would have been an effective tool if adopted in the bargaining process between GE company management and the union representatives. This would aid in attaining each parties respective interests for the proposal subject. The process would enhance identification of areas in which the parties had common interests and areas in which the parties had conflicting interests. Thus, the negotiations would begin on common interest areas in order to develop mutual trust and respect, as well as the bargaining pattern that need adoption for efficiency of the process. As such, negotiations on conflicting interest areas would take place in an efficient manner. However, the bargaining process should have depicted an expression of empathy towards each party’s concerns and interest.
Finally, both parties after engaging in negotiations during the bargaining process should have adopted a means of exchanging the papers of the proceedings. After the exchange, the parties should then make a formal arrangement for final revision of the presentations from the papers. The bargaining process should then end with the signing of the agreements document. This would aid in ensuring that each party obeys the agreement contract and implements it effectively.
Conclusion:
Bargaining power is a key factor for parties to attain an agreement in the negotiation process (Lewin, 1988). GE workers union representatives had no bargaining power; as such, the union representatives could not reach an agreement amicably with the management of GE Company. In all negotiations, an agreement is attained easily if the cost of disagreement exceeds cost of agreement. The bargaining process between GE company management and workers union representatives had a higher cost of agreement than the cost of disagreement. As such, the bargaining process would not yield any results from the negotiations that took place. However, GE Company demonstrated a lot of resistance, in all bargaining processes, towards the union representatives’ proposal interests. The motivating factor towards the establishment of bargaining process was the strike that workers would engage in most of the time.
References
Berry, R, Gould, W, & Staudohar, P. (1986). Labor Relations in Professional Sports.
Greenwood Publishing Group.
Cray, C. (n.d). General Electric. Retrieved from:
HYPERLINK “http://www.corpwatch.org/section.php?id=16” http://www.corpwatch.org/section.php?id=16
GE Citizenship. (n.d). Labor Relations: Retrieved from:
HYPERLINK “http://www.ge.com/citizenship/our-priorities/our-people/labor-relations.html” http://www.ge.com/citizenship/our-priorities/our-people/labor-relations.html
Holley, W, Jennings, K, & Wolters, R. (2009). The Labor Relations Process. Cengage
Learning.
Lewin, D. (1988). Public sector labor relations: analysis and readings.
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