Healthcare costs are likely to be the main sticking point in General Electric Co's next round of negotiations with its big US labor unions, which kick off on Monday, both sides said.
The largest US conglomerate has about 15,200 union employees represented primarily by the International Union of Electronic Workers/Communications Workers of America and the United Electrical, Radio and Machine Workers of America. Their current four-year contract is due to expire at 11:59 p.m. ET on Sunday, June 19.
"We absolutely expect to get to an agreement at the end that's fair to both parties," said Susan Bishop, a spokeswoman for the Fairfield, Connecticut-based company. "Certainly there are some issues that are going to be contentious, healthcare among them, pensions."
GE, which employs 287,000 people worldwide, with 133,000 in the United States, has been through a round of aggressive cost-cutting since it reached its last contract in 2007.
Its overall US headcount is down by about 22,000 people since then, a decline that includes both layoffs and the sale of some large units, including plastics and NBC Universal.
"We are going to have some uphill battles, particularly in the area of health care," said Lauren Asplen, a spokeswoman for the IUE/CWA, which is leading the negotiations for the union side. "General Electric has made it very clear they changed their plan for their salaried employees last year and they want to move us into that plan which is one of those high-deductible plans that we think would really unfairly burden our members."
While GE's overall headcount has declined in the past few years, the company says it has added more than 3,000 new manufacturing jobs in the United States since 2009. US President Barack Obama in January tapped GE Chief Executive Jeff Immelt to head a White House advisory board on job creation.
The last GE contract, which passed with the support of 79 percent of the membership, provided 16 percent wage growth over its term.
Unions represent GE workers in New York, Massachusetts, Pennsylvania and Kentucky who make products ranging from railroad locomotives to dishwashers.
GE and its unions have negotiated their 12 contracts without a strike, Bishop said.
That track record should leave investors sanguine, said Daniel Holland, an equity analyst at Morningstar.
"I don't necessarily see a huge problem or issue coming out of the meetings, but I'll be watching it," Holland said. "It's a fine line to walk between making sure that GE has great labor relations ... but also making sure you keep your long-term costs in line with where you see the business going."
Later this summer the United Auto Workers union is due to open talks with the three big US carmakers ahead of their contracts expiring in September.
That union, which made big concessions in its last round of talks as General Motors Co, Ford Motor Co and Chrysler Group LLC Fiat struggled financially, now aims to seek a share of the Detroit automakers' profits.
Boeing Co in 2008 faced a two-month strike by its Seattle machinists, which the company said contributed to its extensive delays in releasing its forthcoming 787 Dreamliner jet.
