The locomotive plant manager, Wabtec’s Rich Krolczyk, sent out a letter to all the unionized workers on April 16, and seen by Trains. This letter indicted that wages are still a key issue but urges the workers to consider future ramifications of trying to keep the wages and wage structure in place as they are.
“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,” Krolczyk wrote.
Krolczyk is urging members to accept Wabtec’s proposal of a two-tier wage system to lower wages for new hires to $22 per hour from $35. He says that current wage earners and those recalled from layoffs will not be affected in the change, however.
In his letter, he wrote that such moves in the past have contributed to plant growth in other locations. He cited that another union shop, Wabtec’s Swiger Coil Systems plant in Cleveland grew a headcount of 83 percent and doubled the revenue from that location.
On the other hand, Krolczyk warned that there has been already consideration to move work to other plants by Wabtec if no agreement can be reached. Some of the biggest production aspects to be phased-out in Lawrence Park would be cab assembly and the entire locomotive modernization program, which right now is most of the work being done at the plant.
He said the work can be moved to 80 locations under Wabtec ownership and that the high wages in the Lawrence Park plant make it the least competitive of all of them. He urges the union to conduct a positive dialog to discuss the long-term benefits for all those affected as negotiations continue.
Officials from United Electrical, Radio and Machine Workers of America Locals UE 506 and 618 did not respond to Trains’ request for comment. Union workers are laboring under a 90-day interim agreement that ends June 3. The top item on their list as things they will not accept in the negotiations is the two-tier wage system.
Wabtec’s plant near Erie is a former GE Transportation complex. GE Transportation and Wabtec merged earlier this year.
Mr Grant has mis-quoted Iacocca. What he said during negotiations with the UAW was: “We have lots of jobs at $12.00/hour. We have none at $15.00” The two-tier agreement came later and was a bone of contention as long as it lasted. As a carpenter’s apprentice more years ago than I care to remember, I was paid 60% of a journeyman’s wage in a training program that lasted at least 4 years, pending successful completion of incremental steps to journeyman status. CIO unions have generally not used this type of plan.
The wage scale at Erie is not by a long shot the only or principle issue. WABTEC has in effect demanded that t he union roll over and expire. Moreover, they are suggesting welders starting wage at $16.00/hr in Erie while quoting $24.47 in Ft. Worth. Inconsistency? Despite company plaudits for Ft.Worth, Erie still uses fewer labor hours per dollar of salable production than Ft. Worth, albeit at a higher wage cost,
and has fewer warranty costs.
GE management never, ever made mistakes. Just ask Jeff. He borrowed money to pay “dividends” in 2016 when the company was experiencing negative cash flow. The last “dividend” of $.50/share in 1963 of PRR was also borrowed. Most of us dinosaurs remember how that ended.
GE bought the Ft. Worth warehouse (built on speculation by an authority) , vacant for 10 years since construction, for $50 million and then spent another $300 million making it usable (minor items like transfer tracks and locomotive capable cranes). In effect, the facility was rebuilt from the inside out. Ft. Worth recently shipped its thousandth locomotive–and had north of $300,000 of capital costs for each unit produced. How’s that for business acumen and “efficiency”? Maybe they’ll recover the cost eventually.
You’d think WABTEC would learn from the EMD-Progressive Raill-Catapillar debacle the cost of union-busting. They got cheap, publically- subsidized labor–and an empty order book. Of course, GE diesels are more technically refined than ProgRail’s, but WABTECS most recent venture into locomotive building at it.s MPI facility in Boise, Id didn’t end well, if memory serves.
And then there is increasing competition from minor builders. GE apparently didn;t even submit a proposal to replace it’s AMTRAK P42’s. And little Brookville Locomotive is building an array of locomotives, if on a small scale, to say nothing of Siemens and other minor builders.
Competition is out there and rail companies. are looking for answers.
How about a two tier wage system for management as well? New hires at a reduced amount..
Remember Lee Iacocca at Chrysler… regarding availability of union jobs with or without a two-tier agreement. Without, no one will have job; with two-ter, we may survive.
Hello, Fiat-Chrysler, following a myriad of corporate machinations to include U(ncle) S(ugar), Mercedes, venture capitalists (what a joke), etc. Point being this: find a new line of work.
Gary, I don’t know what part of the country you live in, but in many regions $22 an hour is not an excellent living wage.
Something that was not mentioned but will probably show up in the future.
The higher paid workers wage rate will probably be frozen at that rate and the new hires will get gradual increases.
Only when the new hires match the wage of the original worker will the originals get a raise.
Had something like this when I began work as a brakeman for the Soo Line. The difference was, you started at 75% of the hourly rate. Then each succeeding year, your pay was increased by 5% until five years later you were at the same pay rate as the “old heads.”
seems pretty reasonable to me as even a $22 an hour wage is an excellent living wage
Similar thing happened in Maine a few years ago at a bakery. Union leaders going around to the news media spouting off that they weren’t going to take a cut in wages and benefits, that they weren’t going to allow wages and benefits to stay the same for the length of the new contract and that they wanted increased wages and benefits and if they didn’t get them they were going to shut the plant down. Well, that is exactly what happened. Then 350 workers, about 300 of them union, were out of their jobs and scrounging for work in a state has has very little.
Having a two tiered wage is very divisive.
I agree with both Mr. Narita and Mr. Blaine. I’ve seen for myself the problems associated with two tier wage contracts. They will wind up costing more in lost productivity do to poor morale than they ever save in wages. And Mr. McGuire if the Bakery you are talking about is the one I’m thinking of, they were bought out with the intent of offering a crap contract and blame the shut down on the union. Unions are in place to give the working men and women a voice in the work place. This country needs them now more than ever. Wabtec management in Erie is trying to divide the plant workers so they can eventually kill off the union.
wabtec knew from the start, all about the erie plant. in my opnion, i’de take a GE over the other guys products any day, alot of skill and knowlage at erie, texas may put out locomotives, erie started the line. quivle over pay, and wabtec will suffer in quality in the long run. many companys say their union plants are uncompetitive, i say B.S., just another excuse to rip off the working man, again,
Hmmmm. Lower wages = lower dues collections. Let’s see whose interests the union leadership really represent.
It’s simple, either they take the two tier wage being offered by Wabtec or they’ll be out of jobs…not sure why the Union is so against keeping the place open…key point, new hires start at the lower wage, existing and those recalled from furloughs/layoffs would still receive the $35 wage…makes complete sense unless you don’t like working(it’s also prevalent in many other jobs, first responders included).