June 20, 2011 / 1:23 PM / 7 years ago

UPDATE 2-GE labor deal calls for cash payment, pay hikes

* $5,000 cash payment for each worker

* Annual pay increases of 2.25 to 3 pct over four years

* GE calls contract fair and balanced

* New hires ineligible for defined-benefit pension plan (Adds details on health costs)

NEW YORK, June 20 (Reuters) - A tentative agreement between unions and General Electric Co (GE.N) calls for a $5,000 cash payment to each worker upon ratification and annual wage increases of 2.25 to 3 percent over the next four years, one of the unions said on Monday.

Hourly union workers will pay a higher portion of healthcare costs than under the prior four-year contract, but less than salaried GE workers, according to the International Union of Electric Workers/Communications Workers of America (IUE-CWA).

GE on Sunday reached a tentative, four-year national labor contract with two key unions that cover more than 15,000 GE workers. [ID:nL3E7HK07U]

The contract would provide a $5,000 cash payment in July, followed by general wage increases of 2.25 percent in June 2012, 2.5 percent in 2013 and 3 percent in 2014.

New GE hires would be ineligible for a defined-benefit pension plan, instead getting cash payments and contributions into a 401(k) plan. GE agreed it will not propose any freezes in the pension plan in its 2015 negotiations with unions, a commitment the IUE-CWA called “unprecedented.”

    The agreements are subject to review by union negotiating committees and must be ratified by June 30.

    If ratified, the deal calls for hourly workers to pay 24 percent of their healthcare costs, up from 21.5 percent under the previous contract. That is below the 35 percent paid by salaried GE employees, according to the IUE-CWA.

    GE, the largest U.S. conglomerate, said the tentative agreement was fair and balanced and allowed the company to remain competitive.

    About 15,200 union-represented GE employees in the United States are covered by the negotiations that began on May 23. GE employs about 133,000 workers in the United States, which accounts for slightly less than half of its global workforce.

    Shares of GE, part of the Dow Jones industrial average .DJI, were down 11 cents at $18.38 in early trading. (Reporting by Nick Zieminski; editing by John Wallace)

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