ERIE, Pa. (AP) — Building 10 at GE Transportation, a massive brick structure where generations of Erie workers have built locomotives, was eerily quiet Friday.
It’s no mystery why.
“We used to build 20 locomotives a week in this building,” said Richard Simpson, vice president of the company’s global supply chain. “Today it’s more like two.”
Simpson and other company leaders place the blame for that change on a handful of factors, including a global freight slowdown that has a record number of locomotives parked in rail yards.
But that’s only part of the problem, he said.
Simpson, who is in the midst of decision bargaining negotiations with union workers, members of Local 506 of the United Electrical, Radio and Machine Workers of America, said the Erie plant has the highest wage scale within the company and is the least efficient.
That perspective — one the union does not share — explains why GE has made its new Fort Worth plant the main manufacturing site for its cutting edge Evolution locomotive.
And the company’s concerns about high wages and low efficiency are why GE Transportation has proposed a tentative transfer of work that could eliminate up to 180 jobs.
Decision bargaining is the union’s opportunity to convince the company to reduce that number.
But the company wants concessions that include lower wages for new employees, a reduction in the number of job classifications, the elimination of two 10-minute breaks and a shortening of the paid workday to 7.5 hours and changes in other policies, aimed at cutting costs and boosting efficiency.
What the company is offering in return can be found in a stuffy third-floor space in Building 10, at the top of a rickety flight of wooden stairs.
Simpson and other company officials have been working there for months in a room filled with a collection of wooden models arranged to represent the 4 million-square-feet of manufacturing space on GE Transportation’s Erie campus.
It doesn’t look like much, but Simpson suggests it is nothing less than a plan for reinventing the way locomotives are built in Erie.
The details of what the company would change are mind-numbing, but the philosophy behind those moves is far simpler.
Ray Nicolia, the plant’s lean manufacturing leader, said key locomotive components travel as much as three miles, sometimes by rail or truck and other times lifted by crane, as they move through the manufacturing process.
The proposed reconfiguration of the plant, dubbed Reinvent Erie, would establish a more logical assembly line structure that would move parts into immediate proximity of where they are needed.
Simpson acknowledged what union workers have been saying for years — that work in the plant sometimes grinds to a halt when parts aren’t available when needed.
A reconfigured plant, which would establish Building 12, a 357,000-square-foot space, as the main assembly line, might help address some of those issues.
Improving efficiency has become increasingly important, Simpson said.
“We have a fierce competitor in Caterpillar and now the Chinese,” Simpson said. “Our technology advantage is no longer enough.”
Randy Biletnikoff, site leader for the Erie plant, said the changes aren’t simply aimed at improving the company’s profit margin.
Simpson said changes are aimed at bringing a measure of stability and possibly some new work to the Erie plant.
“This would require a huge investment,” Simpson said of the Reinvent Erie plan.
Left unsaid is the suggestion that GE Transportation’s ties to Erie would be cemented by spending to improve the plant. The company isn’t saying just how much money it would invest in the Erie plant, but the union has pegged that investment at as much as $40 million.
Scott Slawson, president of UE Local 506, said the union is open to the idea of a more efficient plant.
“What they are rolling out is stuff we have been talking to them about for years,” he said. “If they would have made this commitment to Erie back in 2011, rather than investing in a new plant, competitiveness, efficiency and things of this nature wouldn’t be a conversation.”
Slawson said he’s troubled by the company’s request that the union surrender cost-of-living increases and $4,500 in cash payments agreed to in a four-year contract signed less than a year ago.
Slawson said the company is also proposing a 44 percent wage cut for new employees and for any laid-off workers called back to their jobs.
“That is a bitter pill to swallow when you look at $16 an hour for what it is we do here,” he said.
Simpson does see an upside for Erie workers, whose primary mission is building locomotives for the international market.
“North American sales are slow,” Simpson said. “But there is an opportunity to win international business.”
Simpson, who has helped reconfigure other Erie plants and to establish the plant in Fort Worth, said he’s excited about what the redesign could do for the local workforce.
But the investment isn’t a given.
“We have to reach an agreement to address both the culture and the layout issues,” he said.
Slawson said the union shares that wish.
“We want to see investment into this community and into our membership,” he said. “This is huge to us. We want to know there is some kind of future in Erie.”
The two parties are expected to continue negotiations through July 25.