When a new owner called Wabtec took control last month of General Electric’s historic locomotive manufacturing plant in Erie as part of an $11 billion deal, the bosses must have thought it was going to be easy to bully 1,700 United Electrical workers into a less favorable contract that would have started any new hires at much lower wage than factory veterans.
Why wouldn’t the union accept this shotgun marriage? Pennsylvania-based Wabtec (formerly Westinghouse Air Brake Technologies) called on the same playbook that manufacturing execs have used to hold down America’s blue-collar paychecks for decades. The locomotive plant wouldn’t be able to compete with rivals in Mexico or China without major givebacks, management insisted. And if the union didn’t cave immediately, Wabtec could just shift the work to other lower-cost plants away from the Great Lakes.
So those bosses must have been stunned when union leaders didn’t sign on the dotted line. Instead, their 1,700 members walked out — the first U.S. labor strike by manufacturing workers in nearly three years.
“They thought they could steamroll all the existing employees,” Brad McCurdy — one of those rank-and-file workers, an electrician with 14 years at the Erie plant — told me by phone this week. He said today’s workers heard the echoes from the last major strike at the former GE facility, an epic 102-day walkout in 1969. “We’re fighting for this community. In the strike 50 years ago, our union brothers didn’t sell us up the river, and we’re not going to sell future workers up the river.”
Some local observers thought the strike was foolish — didn’t Wabtec hold all the cards? — but so far the strategy has worked for UE Locals 506 and 618. Late Wednesday, the two sides agreed to a 90-day interim agreement that essentially preserves the current union contract while allowing some time for a new deal that could satisfy both blue-collar workers as well as management.
The high-stakes Erie showdown caps a year that’s been remarkable in America both for the number of labor strikes — the most in more than three decades — and the success that middle-class workers have gained from walking off the job. The 485,000-plus Americans who took part in work stoppages in 2018 was the most since 1986, and the highest number in the 21st Century by a long shot. And so far, 2019 is off to even more ambitious start for organized labor.
In Oakland, a 7-day teacher strike just ended with workers seeing major concessions, including a pay raise that was double the district’s original offer and a promise of more hiring and support for counselors, school psychologists, and nurses. That came on the heels of January’s similar job action in Los Angeles, where a strike over issues like reducing class sizes was largely a win for the union, Indeed, the bulk of 2018′s initial strike wave driven by — to Oklahoma.
Now, walkout fever is spreading elsewhere. In late 2018, a 7,700-worker strike against the nation’s largest hotel operator, Marriott Corp., led to major gains for housekeepers and other staff. Here in Philadelphia, SEPTA transit police are — as I write this, anyway — on the picket line over a variety of workplace issues, while some 1,200 faculity and support staff at Community College of Philadelphia have authorized a potential strike that could begin in a matter of days.
There’s something in the air. Many labor experts say that strikes — not unlike the global waves of political unrest that occurred in 2011, 1989 or 1968 — can be contagious, as workers see and adopt winning tactics from elsewhere. But in America right now, the uprising has been compounded by mounting frustration over income inequality, and how buying power for the middle class has stayed flat for years while incomes from top executives and investors have skyrocketed.
“The word ‘strike’ has again become part of the American lexicon,” Erik Loomis, the University of Rhode Island labor historian and author of A History of America in Ten Strikes, told me. Loomis disputed one argument over the rise in labor unrest recently floated by Trump administration officials, that the current low U.S. unemployment rate of 4 percent is giving middle-class workers the courage to take risks. Instead, Loomis sees rising outrage over a system where most income gains are falling to the top 10 percent.
Loomis said “strikes are actually scary — especially when you’re a worker and you have a family and you don’t know what the impact’s going to be. But if you see them [strikes] working elsewhere, that can give you confidence.” He said many workers— squeezed by taking on extra jobs to make ends meet -- are thinking, “if this is ‘the good economy,’ what happens in the next recession?"
There’s more than a little irony that Erie — the northwestern Pennsylvania city that puts the rust in the Rust Belt —would be the site of the nation’s first manufacturing plant strike in a while. In 2016, the city where the then-GE Transportation locomotive plant — erected by the company in 1910 along with the historic Lawrence Park neighborhood that surrounds it — had become the last remaining large factory was a frequent stop on the campaign trail for candidates like Donald Trump.
Here’s what Trump told a rally there just two months before he was elected 45th president: “So Erie has lost a lot. Right? You know that, right? Hang in, don’t leave. I promise we can fix it so fast. We will stop these countries from taking our jobs.... Now, I came up with a great plan. I’m lowering corporate taxes so our companies stay, so I don’t even have to make the call.”
Big corporations like Wabtec, which last month projected a 2019 profit of about $1.2 billion, got that big Trump tax cut in late 2017, yet it still plans to reduce labor costs rather than share any of the benefits with workers. After buying GE Transportation, the company informed the UE it wanted a new contract that not only rankled the current workforce with a requirement for mandatory overtime but demanded the right to staff the Erie plant with as much as 20 percent lower-paid contractors, and to hire any new union employees at a 40 percent lower paycheck than what current workers get.
Wabtec calculated that long-time employees like McCurdy — a 42-year-old father of two — would jump at the deal since their pay and benefits would be little affected. That proved to be a major miscalculation. Instead, the factory workers saw the offer as an arrogant example of what McCurdy called “corporate greed and Union Busting 101.” They voted to strike, huddling on their picket line around flaming “burn barrels” against frigid blasts of wind off Lake Erie.
The Erie workers took their cue from other recent strikes that appealed for — and received — wide public support. The signs brandished by picketers read “On Strike for the Jobs Our Communities Deserve” and were modeled after a similar slogan used by Chicago schoolteachers in a 2012 job action. They said the lower salaries that Wabtec wants to offer new hires would be a crippling blow for the already hard-hit Pennsylvania city. The lower wages, they said, would suck $17 million out of the Erie economy — just a tad more than the bonus Wabtec CEO Raymond Betler got for pulling off the GE buyout.
“This company is exploiting the fact that we have a low medium income and not a lot of good paying jobs” in Erie, McCurdy told me, referring to the Wabtec demands. As the strikers braced against the cold this past week, they took support from their neighbors who honked or stopped to donate some hand warmers. It’s hard not to think that strikers winning the public relations war is what helped drive Wabtec — which had initially begun shifting work to other U.S. facilities — back to the bargaining table instead.
That’s not surprising. U.S. public support for labor unions has spiked to 62 percent — the highest it’s been in years —since Trump was elected in 2016. After decades of seeing paychecks erode, more and more workers are looking at their options and asking themselves, what have we got to lose? For America’s CEOs who were so quick to pocket their Trump tax cut or spend the money on buybacks that enriched their investors but not their workers, the forecast for 2019 is a long hot summer.