To the Local 506 and 618 members of the United Electrical, Radio and Machine Workers of America:
I want to take this opportunity to provide a status update on current labor negotiations.
To date, representatives from Wabtec have met with your Union leadership more than a dozen times over the last roughly 40 days. Throughout this time, and in the months leading up to the close of GE Transportation’s merger with Wabtec, the Company has provided approximately 150 proposals, modified proposals and counterproposals to the UE. Despite these efforts, both parties remain far apart on finalizing a long-term agreement.
Wabtec’s intent is – and remains – clear: to reach a fair and reasonable agreement that places the Erie plant on more competitive footing to preserve your jobs and create new jobs in this community. For we all know that, when the Erie plant is producing, this community thrives.
While we have made some progress by reaching tentative agreements on many non-economic items like Union security and dues check off, we remain far apart on the core issues that will position the Erie site for success. And unfortunately, we have spent more time discussing UE proposals to preserve superseniority for more than 100 stewards instead of discussing solutions that benefit you and the future of Erie.
If we are going to help the Erie plant stabilize, succeed and survive, change needs to happen. The greatest area of opportunity to position Erie for stability and growth starts with competitive market-based wages.
Let me reiterate: these market-based wages do NOT impact you. For all current employees, we remain absolutely committed to maintaining the average $35/hour rate – the most generous manufacturing wages in the region. We also remain committed to protecting legacy wage rates for current employees of Wabtec who are laid off and return to work or those that move to a new position.
But for new hires, this is not sustainable. For new hires, we are seeking competitive market-based wages that average around $22/hour – well above market wages in the region.
This wage structure will drive new jobs, stability and capital investment. It’s worked at Wabtec and other plants outside of Wabtec – like Erie’s own Lord Corporation. It will work here too. Just look at the numbers:
• In Wabtec’s Grove City plant, we have grown headcount by 25%, expanded the work scope and invested over $160 million in CapEx.
• In Cleveland (a Union shop), we’ve grown headcount by 83%, more than doubled the plant’s revenue, expanded its product offerings and invested over $2 million.
• In Kansas City (a Union shop), we’ve grown their repair work services, invested over $3 million and have grown headcount 33% — in the last 2 years alone.
• And in Las Vegas, we have grown headcount 20%, nearly doubled the plant’s revenue, expanded its repair and service operations, and invested almost $4 million.
Because these sites have become so competitive, work from Erie has left and gone to these locations. As all of you know, more than 1,500 jobs have been lost in the Erie plant in recent years, as new work was relocated to other locations or farmed out to third parties. We need to stop this trend. Our preferred option is to grow this plant.
However, without a two-tier system, work will continue moving out of this plant. The movement of products already negotiated for transfer by GET will be expedited.
Today, we informed UE 506 leaders that we intend to transfer additional components as well. The first production items to move would be:
• Locomotive Modernizations
• Drill Motors
• Specialized Machining
• Controls / Electronics
This is the inevitable result of maintaining wages that are higher than other alternative manufacturing sites. Now as part of Wabtec, we have significantly more options in terms of sourcing new work and products, given there are more than 80 manufacturing locations and extensive capabilities within the Company. All of these alternative manufacturing sites have lower wage rates than the Erie plant. As part of Wabtec, Erie must compete with these other facilities to preserve high-paying manufacturing jobs and create new jobs.
I encourage you to talk to Union leadership and encourage them to engage in an open, productive dialog to discuss a fair and competitive agreement that works for everyone. We have a tremendous opportunity to position this site for growth and stability and we know that when the Erie plant is producing, our community thrives.
Rich Krolczyk Erie Plant Manager