Friday, September 5, 2008

Boeing Strike

Boeing Unless something crazy happened during the one and a half hours after I wrote this post, approximately 27,000 assembly workers are now striking against Boeing (as of 3:00am).  As our previous post and the Washington Post notes, this story, which involves a failed mediation attempt, shows how an employer insisting on cutting back compensation from its employees may be asking for trouble when its stated profits are rising at the same time:

Members of the International Association of Machinists and Aerospace Workers were prepared to strike just after 3 a.m. EST, a move that could paralyze Boeing's manufacturing plants as the company is experiencing record profits and working on what the union says is a seven-year backlog of orders.

Angry union negotiators called the strike last night after talks aided by a federal mediator failed to produce an agreement. Union members had voted overwhelmingly to strike Wednesday night but grudgingly agreed to a 48-hour contract extension to try to reach a deal.  Most of the workers affected are based at plants in the Seattle area; others work in Gresham, Ore., and in Wichita, Kan. . . .

The strike marks a critical test for organized labor, which has struggled to make gains as competition for labor has expanded across the world, diminishing workers' leverage. But the Boeing electricians, riveters, painters and others are in an unusually strong position because they are skilled laborers working for a company that has been highly profitable in recent years. "This is a case where a union does have significant leverage," said Robert A. Bruno, an associate professor of labor and employment relations at the University of Illinois at Chicago. "The employer is very profitable and has the capacity to pay. And they are in a critical industry that you cannot afford to not have functioning."

Boeing officials said their three-year contract offer, which included an 11 percent wage increase and a 3 percent cost of living increase, plus potential bonuses, was generous for workers who earn an average of $56,000 a year before overtime. The union, however, had pressed for more, including a commitment to limit the use of outside contractors. The union also said the company's proposal was riddled with givebacks -- on pensions and the cost of health insurance, for instance -- which infuriated workers who expected more from a company that reported more than $900 million in profit in the last quarter. . . .

It'll be interested to see what happens.  As highly skilled workers, the strikers have more leverage than most workers.  On the other hand, Boeing isn't exactly known for capitulating for union demands.  I remember living in Seattle the year that Boeing managed to tick off its engineers--who aren't usually known for their rabble-rousing unionism--enough to go on strike. 


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800,000 jobs lost, homes forclosing, families hurting to pay bills, but low and behold the unions are striking. When are people going to get that many unions are hurting us more than helping us? Makes me want to to outsource even more, what's the point anymore. We are getting forced to pay for whatever government and unions want, sounds a bit like communism to me. U.S. Labor is becoming so exspensive that our products are becoming non valuable to the rest of the world. The american people are getting taxed to male money, taxed to spend it, taxed to save it, taxed to invest it, taxed to give it away, and even taxed when we die!
And now people are in love with this presidental canidate that wants to charge us more taxes and eventaully have a full govermental workforce. Sounds great. What happen to our free country? I think our country has become a redistributional insitition a d that makes me sad.
In retrospect to unions striking, I get they are trying to take care of the American worker. However are they really hurting the country as a whole? We can't even get some airplanes built without a bunch of people who are making a decent living complaining about raises. What a joke.

Posted by: john | Sep 6, 2008 9:22:12 AM

Unions Are Bad for Business. After reading that Boeing offered the IAM members at least $34,000.00 in financial increases over the next three years of the proposed new contract and the union took this offer as an insult is unvbelieaveable to me. I know a Boeing engineer who quit the company because he felt that he wasn't being treated fairly and after three years he gladly rejoined the company during a recent hiring opportunity. During the three years he was away from Boeing this ex-Boeing engineer could not get WA state unemployment compensation because he guit his last job. He was being supported by his Boeing employed wife during this time. He could never find work using his civil engineering degree and he had a few seasonal jobs that never offered pay or benefits anywhere close to what he left behind at Boeing. If you look at the big three auto manufacturers you will see the damage these unions have brought upon the big three. Each is now close to being bankrupt and out of business and most of the blame can be placed at the door of unionhall. The unions at Boeing are no different than any other union, they are all out for the most they can take and the heck with the company. I think every union employee on the picket line should be fired as soon as they pick up that strike sign. Most of the training and skills acquired by these union people have been acquired on the job, all paid for by Boeing while they drew a nice pay check from Boeing. They seem so proud to be on the strike line. May God reward them by seeing that they have no job at the end of the day. After seeing how unfairly the union members play ball, I endorse Boeings right to outsource work. Who needs these thankless people around. There are millions of men and women that would love to have a job that offers a great wage and provides the complete retirement and health care package as gravey to boot. I would like very much to see Boeing use it's 10 billon dollars cash on hand to lock these union people out for good.

Posted by: D. J. Truman | Sep 6, 2008 9:23:35 AM

Boeing employees are spoiled rotten, they already make way above the average person and all they are is assemblers? What a joke they should be thrown out on their ear and Boeing should hire those of us who would appreciate a job averaging $56K a year plus the best benefits anywhere.

Where do I sign up?

Posted by: Doug Warren | Sep 6, 2008 9:40:15 AM

I am a machinist with Boeing. I studied my trade at community college and had 6 years experience before being hired by Boeing. Some reading this would be surprised at the level of training required to make aircraft components or assemble them, including ongoing certification on tooling, materials, document control, and safety.

I am not anti-globalization and less protective of American products than many executives of some industries, for instance agricultural products or the timber industry. Some work must be outsourced to maintain flexibility and keep people throughout the world working so they can afford to fly on our aircraft.

When our union was in a weaker position, Boeing used its position to place language in the contract allowing contractors to work in Boeing facilities doing work previously reserved for our union members, including inventory control and delivery and some maintenance. As our skilled millwrights, electricians, etc. retire, Boeing is not replacing them with skilled union members, but rather more contractors. We like to say that the best wages and benefits do you no good if you are laid off or can't advance because the jobs are held by a non-union workers.

Starting wages at Boeing range from $9.72/hr. to 19.72/hr. Only after six years employment does one earn the top rate from $25.58/hr to $35.13/hr.

Now here's a poke at all the Reagan worshippers out there-a rising tide lifts all boats, and our tide is high. The workingman's wages truly rain down upon the community, not "trickle down" like some CEO's bloated, deferred salary.

Posted by: scott harper | Sep 6, 2008 7:40:28 PM

Do not believe everything that you see in the media. Blue collar greed and stupidity are not what decimated the American auto industry. Corporate greed/ shareholder greed put the nails in that coffin. Joining the Boeing Company in 1977 when the company was rising to become the dominant player in the world of large commercial aircraft, I was hired with no aircraft skill, but with a strong work ethic and a deep respect for the integrity of the people who teamed together everyday to build the 747 legend. In 1983 in the midst of a deep layoff cycle, Boeing and the IAM made a pact to install a second tier wage schedule that would exploit new and rehires to the company by paying them less for their first 5 years, while expecting equal output and top performance. It is my belief that Boeing's two tier wage denies us the most talented and capable, condemning us to fall behind in the global economy. This 25 year mistake has contributed to Boeing's decline as they are no longer attracting and retaining the most qualified workers in the industry, of this I have first hand knowledge. Working in the local fish industry before I took a job at Boeing, I learned that job security can only be won by outperforming all others who would be willing to do the same work for less. A strong union, with industry leading wages and benefits is vital to strengthen this company and to prevent more manufacturing jobs from being outsourced overseas. My knowledge, skill, and sweat helped build the jetliner that your family may travel on, and to be accused of greed and stupidity while I fight for our future is insulting.

Posted by: Bernard Svendsen | Sep 7, 2008 8:59:24 PM

I am a long time union supporter and, over the years, have been a member of the Teamsters and AFSCME. So, I understand all of the issues that these folks are concerned with, but I don't understand three things about this strike:

First, why start out with a hard line in the sand with no room for negotiating? That ties the hands of a negotiating committee and leaves no room for negotiating. Perhaps they should be called a demand committee.

Second, why are people complaining about Boeing making a profit? Aren't companies that employ people suppose to make a profit? Doesn't each employee own stock in the company or have some form of profit sharing? If so, then why are people complaining about their stock making money?

The last thing is how 87% of the members voted to strike when only 80% of the members rejected the contract. Doesn't that mean that 7% of the members who voted for the contract voted to strike? If so, that doesn't make a whole lot of sense. I can understand that 87% of the members who voted against the contract, voted to strike; but that is not what I am hearing. So, which is it?

I am confused!

Posted by: edewaters | Sep 7, 2008 11:09:39 PM

and why should we let Boeing re-compete for the DoD tanker biz? I see a risk if these workers like to strike whenever they like.

Boeing's whole argument during the protest of the award was that the french could control our supply of spare parts. Seems like the unions are a bigger risk.

Posted by: Ron | Sep 8, 2008 11:17:10 AM

I am a retired Boeing worker & not particularly economically affected by the strike. These machinists, IMHO, are the most arrogant, spoiled bunch of employees in history. With unemployment rates as they are, I'm guessing there are plenty of qualified workers who would be ecstatic to receive the pay and benefits of the average Boeing employee. This bunch believes all the hype they are getting from a the overpaid union execs who will not suffer from the loss of pay. The most likely result of a prolonged strike, will be to see a whole lot more jobs outsourced.

Posted by: Terry | Sep 9, 2008 11:38:23 AM

Please remember that you are entitled to your opinion about unions, about Boeing, about politics and about the issues at hand. But, these are people you are talking about and lumping every IAM member into the same category, tearing them down with your spiteful opinions, does not benefit anyone! My husband has only been with Boeing for one year as a Level 9 airframe mechanic. He has many years of experience, went to school to learn his trade, has an extremely strong work ethic and has been stunned at the hatred spewed about him and his coworkers. This strie will hurt our family with two young children and so many other families, but at the end of the day, there was an overwhelming majority that voted for the strike. People will talk. I just ask that you each keep in mind that these are husbands, Dads, grandpas, moms, grandmas,wives, friends, etc. that do take what you say to heart! How would you feel to be out of work, not by choice, and then to have the public spewing their hatred for unions, which comes as out as hatred of the people who make up the union. Think before you blog! Respecfully, a Boeing workers loving wife

Posted by: ctaylor | Sep 14, 2008 11:31:03 AM

this strike is effecting evryone in the aerospace world..this is why our work is going to mexico!! why wont you union folks take what is there? you have taken it before in the past. i think its greed and afraid of geeting you out of your comfort zone. does anyone feel the same way????????

Posted by: juanpepe | Sep 14, 2008 7:11:24 PM

This is in response to D. J. Truman's remarks:
Hey do you know what the starting wage is? If you are lucky 12.75 per hour.
The average wage 56,000 per year is AFTER YOU WORK 6 FULL YEARS. Until then you will have to work 40 hours overtime per WEEK to make that kind of money working 7 days a week.
I would shut your mouth and find out more information before you open your STUPID mouth.
Go ahead and sign up, if Boeing does let you in to the BOEING labor force, YOU WILL BE THE FIRST ONE TO BE BITCHING ABOUT LOW WAGES THAT BOEING PAYS. You will have hoped you had kept your trap shut!

Posted by: MD | Sep 15, 2008 1:20:48 PM

Working for a Boeing non-union site I'm more than happy to enlight the public about these union guys with FACTS. The union does not make boeing stronger, it weakens it. Most of these individuals refuse to do more than job, operate more than one machine at a time (that would mean that they had to do more, or at least some work!)therefore forcing Boeing to hire more union workers to do the same job as fewer non-union workers. These gus are greedy and do not want to share a piece of their pie with anyone, especially non-union sites.Although we both work for Boeing , we get treated like lower class citizens by these idiots. They sabotage our work, rejecting it and sending it back, "see their work is inferior" they cry. They complain when we send them packages that weigh over 30 lbs or contain too many items, and the list continues. Boeing provides an opportunity for me and my family that no other company can, that is why I work my tail off every day for them. Most of these IAM guys "work" for the almighty dollar and nothing else.If you doubt that you need only read union members comments about having to work those extra two days. I know boeing paid them for it, I doubt if many if any earned the pay. They have been taken care of by Boeing for so long in some cases that they have no idea what the real world is like. I say give them the chance to find out, let them all walk and replace them with people would die for the opportunity.

Posted by: Theetruth | Sep 16, 2008 12:07:15 PM

To be honest I really didn't care about the outsourcing issue, as boeing has every right to do it they own the business. There is no love in business or morals just greed. 60 percent of the 777 is outsource, 99 percent for the 787, we are the only ones left other than SPEA also going to india. The only thing keeping boeing from outsoucring us is the cost of the huge factories and who would fly made in china jets KAboom Airlines. China can't make babyfood that is safe. Iam not worried about my pee on job going somewhere else if it does then fine. For me the strike is for getting a fair pay increase for all employees not just new hires only as inicated in the new contract. Also the numbers are skewed to make it look better than it really is I would make 60 cents more per hour thats it period.

Posted by: Chris | Sep 16, 2008 11:27:00 PM

This is about corperate greed. As a Boeing employee (formerly Mcdonnell Douglas) through the years Ive seen Boeing squeeze americans out of their job with extreme prejudice kicking 50 year old workers damn good workers at that to the street. In order to give some chinese or indian an american job, its discraceful and hedging or childerns and our countries future. This madness has to stop and we all need to make a stand and say no more to coperate greed. I have no problem with Boeing making money I just ask at "what cost"..........

Posted by: dan | Sep 17, 2008 6:17:35 PM

This is in response to Bernard’s post of September 7th.

Bernard, I understand your confusion – and the answer is probably just as mind boggling as the reasoning behind the explanation.

The IAM specifically asks their employees to vote yes on a strike because it takes 66.7% approval by the membership to authorize the union to strike.

Why is that important you ask? You need only look back to the contract of 2002 when the union membership voted to reject the contract offered by Boeing - but only 64% voted to for a strike. Since there were not a sufficient amount of votes to ratify a strike – the membership were mandated to accept the contract by default….. yes, even after we voted the contract down.

That leads us to the present day vote - and the real reasons the employee’s are striking against Boeing. I am sure if you are reading any of the major publications – you have heard about this incredible financial offer being proposed. What you see if a one page, Boeing generated, PR release. The figures they use are grossly overstated – going so far as to include the taxes they pay (as required by the State of Washington and federal government) as part of our compensation package. I won’t bother getting into all of the takeaways in medical and dental and such.

One of the major sticking points on that contract was an item called (letter of understanding) LOU-37. That particular letter is the real center of controversy in this strike. It basically gave permission for Boeing to outsource our jobs at its discretion. As many have said before me – getting a great raise does a man/woman no good if you aren’t around to collect it.
Boeing has been screaming poverty – and at the same time they are saying they can’t come up with money to contribute to our retirement program – yet over the same period of time they have managed to dump over a $500,000,000.00 into the executive retirement program. Yes, you all read that correctly – that’s over half a billion dollars.

We have shared in the bad times – with no raise in the last contract at all. Now times are good – all we are asking for is for Boeing to back up their media claims of how proud they are of our hard work and the record profits we have been such a big part of helping them create. We are a major part of their team they say, so show us. Don’t just talk the talk – walk the walk.

I hope that helps you out a little Bernard. Thanks for asking.

Posted by: My Two Cents | Sep 17, 2008 9:20:06 PM

I am a current non-union Boeing employee who loves where I work. There are pros and cons to everything. For example:
free health insurance (I actually pay $6 dollars a month for my daughter and me) Where else do you find that benefit. Yes I have a deductible of $200 per person per year, but it is so low and reasonable. My last job I paid $300 a month for the two of us.

Free education. As long as it is accredited, it is free. If I wanted to be a pilot, I can get that paid for, or sailing on top of college tuition PAID. How many companies in the US pay for that?

Tobacco free. As of Oct. 1st 2008, we will be an tobacco free company. As a non-smoker, this is wonderful.

401K matching. as salary we don't get the same as union members, but for every dollar a union member puts into the 401k account, Boeing will match .50 cents up to 8%. I'm not thirty and I have a grand total of 15% of my income going into my 401k. I am not going to rely on someone else saving for me including the US government. I also put away $100 month in bonds, that we can sign up for.

Pension. Currently, union members get $70 per month per year of service after three years to be fully vested. If they worked 20 years, they would make $1400 per month on top of social security. I get $60 per year of service, but that is fine with me.

Gift matching. If employees want to give to NPR, PBS or other non profits, Boeing has a gift matching program to make your donation go further.

EAP. Employee Assistance Program. Free counseling, free legal advice, free accounting advice. If you call one of the programs up to tell them what kind of child or elder care you need, they do all the legwork for you for FREE.

They have a Boeing Daycare in the Northwest, a recreation building to play basketball and work out.

CONS; low wages to begin. my argument. OK, raise the minimum wage rates to match the industry. now make the health care costs match the industry standard as well (cant have your cake and eat it too) They will make less money per month.

I believe the PROS out way the CONS so much it is sick. Union members get better benefits than we do ( I am happy with what I agreed to when i became employed with the company, unlike most)and still gripe. They don't even utilize as a collective group the benefits they do have. I hope they don't mess this up for the rest of us. i would like these jobs to stay in the US. I appreciate my employer and want them to continue to make money to entice them to stay and invest into it's employees. IAM union is not the only union in Boeing. There are many more.......Lets move on and actually appreciate what we have before it turns into the same old line. You never knew what you had until you finally lost it......

Posted by: elizabeth | Sep 23, 2008 2:19:53 AM

For any American to believe we do not live in a global economy is nothing more then being sadly uninformed. The more these machinists demand the more jobs we will loose because the company can not remain competitive in a global market. Although America would like to close her borders and pretend we exist by ourselves it will never happen.

For example the defense contract went to Air Bus not Boeing for the first time in history and law makers stated they had to do so because the cost to build in the US were 4 times that of building it overseas. How did we get to be a group of people that are so disconnected from our employers? We have lost the realization that if our employer can not succeed then we ourselves do not succeed. What are you teaching our children when we expect a salary that does not match our education and experience? I guess when we are living at a lower comfort level because our jobs have left and other countries are flourishing on our greed we will learn.

I currently work for a supplier to Boeing and the result of this strike is we have to lay off employees. These are Steelworker members who also have a union contract with my company. Sadly the union group is the first (and historically the only) employees to be laid off because of their inflated cost. When times are good union demands seem ok however, when the economy turns union demands are too expensive and people have to be let go. You don’t have to look far to watch the mighty fall due to over expensive union contracts. Michigan will never be the same as thousands of workers have lost their jobs as the car industry crumbles. I can only hope that today’s pay for union members is worth the knowledge of knowing someday they too will be laid off or walking the picket line.

Posted by: Sad for Economy | Sep 24, 2008 8:24:39 AM

I have some suggestions for the members of the IAM on strike. First of all, if you don't like the benefits Boeing pays you, go work somewhere else. There are plenty of people unemployed these days struggling to make ends meet who would be more than happy to have your job. Second, if you think executives make too much money, go apply for an executive job yourself. If you don't meet the qualifications of an executive position, don't complain about them being paid too much because they are more valuable to the company than you are.

It's all about supply and demand. A company will pay you as much as they think you are worth to them. If you think you are worth more than what your company pays you, by all means, this is a free country... Go find another job.

A union is a cartel. A cartel tries to artificially force the value of something to be higher than what it really is in a free market. Cartels do no one any good as this strike does no one any good.

Posted by: John | Sep 25, 2008 12:25:48 PM

Why not just strike until Christmas is over, then go back!

Posted by: glen | Sep 26, 2008 2:30:34 PM

There are several things you all are missing.
1) The current benefits and rights that all workers (union and non-union) currently enjoy in America are ultimately the result of America’s Unions. If it weren't for unions we would all be living in company owned towns, working 7 days a week in poor conditions while owners get richer and we die slow young deaths and our children work side by side with us. It is the sacrifice and dedication of those early unions that is the basis for which the standard of living and working conditions that most of us now enjoy is based.
2) Some of the greed in corporate America has been possible due to the disintegration of those unions.
3) There is corruption on both sides, neither side is clean, but both have hurt the worker, and ultimately the business, and livelihood.
4) The IAM workers, many that are new to the job, are making less than they could as a checker at Safeway , union worker should not be a “dirty word” in America, and this is not right.
5)During the last few contracts, and notably hard times for aerospace, the IAM supported Boeing and gave concessions in good faith assuming that sacrifice would come back in the future, this being the future.
6) Boeing is greatly over exaggerating what the cost of the IAM demands are, See the Business Week 9/26 article “Boeing’s Strike: Go Figure?”
The reasons for the IAM demands are clear, but what you really are missing here is the real reason Boeing Management is not negotiating, essentially ignoring the strike and seem unconcerned are three simple numbers…
The longer the strike goes, the more “BCA leadership” can use this as the excuse to re-negotiate the billions in penalties they will owe due to the delay in the new 787 Dreamliner, which without the strike, was most assuredly not going to make the latest published delivery date.
So once again, the strike isn’t about the workers, the IAM payroll, training, benefits, contractors, it’s about money bigger than any IAM demand, bigger then months of BCA production loss, and perhaps as big as BCA managements embarrassment on a global level because of a few individual’s inability to execute good program management, planning and communication to deliver on a promise. The lies Boeing leadership has perpetuated to cover up their failure to listen to the skilled workers years ago that what they wanted to do, was possible, was the right plane for the right time, but was not possible in the time they promised the world. So until corporate greed and vanity is under control, we all will continue to take the hit for a few peoples inability to take responsibility and do the right thing by their workers (IAM workers, engineers, small business, foreign and local contractors, and local economy) and their customers.

Posted by: blame_Vanity | Sep 26, 2008 11:19:15 PM

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