Under the Hat: Leverage - WICU12 HD WSEE Erie, PA News, Sports, Weather, Events

Under the Hat: Leverage

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For Erie's unionized General Electric workers, leverage is something in short supply these days.

The latest example of that is the company's announcement that one of its premier locomotive lines will be moving from Erie to Texas; more than one thousand jobs will be lost here as a result.

What happens next is a negotiating period with UE 506 and there is some hope that the process can mitigate some of the damage.

Local lawmakers are also holding meetings to see if any tax incentives can be scraped together to help reshape GE's thinking.

Let's hope for the best but…

Erie's sprawling GE campus with its cavernous buildings is inefficient by today's standards.

Erie's wages at between $26 and $36 an hour is significantly higher than the $16 to $22 an hour paid in Texas, where a modern plant also requires fewer workers.

And perhaps most importantly, inflexibility in work rules prohibits Erie workers from doing different jobs that different contracts might need. There are no such concerns in Texas.

People in the know tell me that even more important than the wage gap is the productivity gap.

Companies like GE measure productivity using many factors, including how efficiently a place is laid out and how the workers can be re-purposed to handle the task of the day.

Taking in all those factors, GE's Erie workers are productive about 4.5 hours of every 8 hour shift.

The Texas workers, by contrast, can stay productive over 7 out of every 8 hours.

Does that mean Erie workers are lazy or don't work hard? Absolutely not.

What it means is that the system down south is set up to keep workers on task longer, and that fact alone does not bode well for our long term GE prospects.

 Erie has always been known as a place that makes paper and trains. The paper mill is now gone and while we continue to hope for the best, it may be time to begin preparing for a future, where we no longer make either one.

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