The Test of Wills at Boeing 40 comments
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Going on strike just as the global economy is headed into a recession is simply not a good idea. But that is exactly what happened Boeing (BA).
Sept. 6 (Bloomberg) -- Boeing Co.'s machinists went on strike today, seeking improved pay and job security as the planemaker benefits from record orders and tries to keep its 787 Dreamliner schedule from slipping further.
The union's 27,000 members in Washington, home to Boeing's Seattle-area manufacturing hub, Kansas and Oregon began the strike at 12:01 a.m. local time today. Machinists make parts and assemble planes for the Chicago-based company, which trails only Airbus SAS in commercial planemaking. ...
The walkout may jeopardize Boeing's customer relations amid unprecedented demand from airlines for newer, more fuel- efficient planes and keep the 787, its most successful new aircraft, from flying this year. A monthlong strike would shave 31 cents a share off Boeing's earnings and cost $2.8 billion in lost revenue, Merrill Lynch & Co. analyst Ronald Epstein of New York estimates. ...
Boeing engineers soon bolstered the machinists' outsourcing fight:
Sept. 10 (Bloomberg) -- Boeing Co. engineers today became the planemaker's second union to demand the return of work farmed out to contractors, an issue that contributed to the strike started by 27,000 machinists Sept. 6.
The Society of Professional Engineering Employees in Aerospace, representing 21,000 Boeing workers in Washington state, Oregon, California and Utah, presented its first proposal to Boeing executives for a three-year contract to replace the one that expires Dec. 1, Executive Director Ray Goforth said...."The fact the engineers are bringing up similar demands reinforces that this is a big issue for Boeing employees and strengthens the machinists' position," said Harley Shaiken, a labor-relations professor at the University of California at Berkeley. "We have a test of economic wills that could go on for quite some time." ...
BusinessWeek is reporting Boeing Strike: No End in Sight
Machinists face a loss of health coverage after three weeks, but anger over Boeing's power to outsource work may keep the strike going.
As the strike by 27,000 machinists at Boeing (BA) is poised to move into a second week, labor and management seem as far apart as ever. Estimates for how long the impasse will linger range from about three weeks, which would mark the time when health insurance coverage lapses for the strikers, to until a couple of weeks before Thanksgiving, when prospects for a lean Christmas begin to weigh heavily on both sides.
For now, both managers and union officials say, no talks are scheduled. Each is waiting for a call from the other and a federal mediator.
Just how Boeing and its workers went off the cliff, yet again, may be an object lesson in how tough it can be to bridge the gap between labor and management in a globally competitive, old-line business. If Chief Executive W. James McNerney Jr. wanted to use this go-round to break a nearly 60-year cycle of acrimonious relations between Boeing and the International Association of Machinists & Aerospace Workers (IAM), he certainly hasn't succeeded. ...
The BusinessWeek coverage of Boeing from all angles has been excellent. There is much more coverage and many more links in the above article for inquiring minds to consider. And even though the economy in general is heading into the dumper, both in the US and globally, things appear relatively rosy for Boeing.
Management Mistakes
The mistake management usually makes in these situations is to project those rosy forecasts forever into the future. GM (GM), Ford (F), and Chrysler continually gave into union demands, and that eventually and completely wrecked the automakers. To be fair, a string of incompetent management decisions on vehicles, leasing, and subprime lending have also taken a toll.
Unions nearly always want their "fair share" when times are good, never wanting to give anything back when times are poor. When it comes to the automotive sector, reality finally sank in when workers accepted buyouts out of fear of getting nothing if the automakers went under.
In this case, it is hard to say what "fair" is, but a bonus structure tied to profitability would arguably be more fair than other arrangements.
The longest strike at Boeing so far has been 69 days. So we will see who, if anyone, "wins" this test of wills. From my perspective, the fact that 78% of union workers voted to go on strike in spite of an offer that most unions in the country would die for indicates something seriously wrong with the mindset of union workers in this global economic environment. The unions were itching for a fight and they got one. Time will tell who, if anyone, wins the battle. Most often both sides proclaim victory even though no one does.
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This article has 40 comments:
Boeing, doing what is in their best interest as a wealth-generating entity, won't be satisfied until the workers at the US plants earn wages closer to the globalized average, or they'll continue to send work where wages are lower. The machinists, doing what is in their interest, are saying that hurts the people who live here, and it's not necessary.
These unions just do not have a clue about the global economy
But their union leaders, who have their OWN agenda (which is NOT that of the line workers!) won't let them. They promise the rank and file the moon. A few years later, when these bloated contracts inevitably go South, the workers are left holding the bag while their union leaders are still there organizing new dummies to take their place (albeit with lower wages and benefits).
You'd think these otherwise intelligent people would catch on after awhile, but history tells us this is rarely the case. Years later they are left wondering where their jobs, pensions and health care benefits went while their former employer files for bankruptcy (or a government bailout, where the rest of us get to pick up the tab).
I can only speak for myself on the issues that bother me, but I do hear my fellow coworkers and their concerns and they are for the most part the same as mine. Its more than just money! Its a future!
The money side of the story is the easiest for the non-Boeing employee to see and get wrapped around the axle about. For those people all I can say to you is, please try and remember WHO is leaking those numbers to the press. I for one would not have considered going on strike at all if there had been $65K in this contract proposal. Sorry paulk8756.
I have a family of 4 so I have a limited # of benefits offered. With all the "bonuses" and wage increases combined, LESS the new "out of pocket", and overall "deductables" for medical, and prescription plan additional costs combine to make the new contract a "wash" for me. Now I understand that all of these costs are going up for everyone everywhere and I do expect to pay my share for these services. Nobody gets a free ride.
What I don't expect from Boeing and their 13 Billion earned in the last few years on the backs of me and my fellow employees is to be expected to take this offer/contract for the next 3 years and be making the same money at the end of that 3 years, when the cost of everything around me is going through the roof. I'll end up going backwards.
Now if you'll care to look at what the upper crust at Boeing makes in saleries and stock option and the rest of the benefits it's easy to see that they have little or no guilt making sure they are greatly compensated for their efforts.
Now as far as sending work over seas or keeping it here in the states. The way it looks to me is as soon as corporate america can get our wages down to "a days work equals a bowl of rice" the fight will be over and the work will come home.
Until then it'll be up to people like myself who would rather go down swinging than bend over and take it. Besides, I'm not a big fan of rice, I prefer a baked potato.
Tell that to the UAW at Caterpillar in Peoria. They've been doing exactly this for 35 years. They would strike for many months when Cat had no business booked, which is what management was hoping for.
Re: IAM at Boeing - If not now, when? The short and intermediate term is all that's available. Fighting over offshoring is wasted effort and will only delay the inevitable.
When "workers at the US plants earn wages closer to the globalized average", then "a days work equals a bowl of rice".
In business, it's screw your competitor; employee; government; customer; your fellow employee. all to get you more money for that bigger payout. Now the company wants to deny union workers a just increase in pay or benefits, because that is the way to get higher pay for your exec's. Im sure Mcnerney had big checks for all exec's if the negotiating team had pulled this one off.
Why is the union striking; is it just about money? No, even thou the press can't seem to get past the front end numbers.
I can only speak for me; but my view is that we are striking not just for pay, but for the obscene amounts of disparity between Boeing workers and exec's. Union pension is 72 dollars a year; exec's is 400 a year. Top exec's is 4000 a year!
We all know that Boeing can't go back all the way and reverse outsourcing; it can do some, but not all. Airbus is outsourcing to.
China, may become the next big competitor. Didn't help with Boeing showing them how to build airplanes thou.
What is it that the average union member wants; job security improvements: jobs for future employees; Better retirement; a fair wage for trying to live the middle class dream. Most people understand higher costs to consumers; bad money management from our government; peak oil - hell peak everything! Were a nation that has prospered in good times and want
them to continue. The question is "can we?" Energy crises; food crises; benefit crises; corruption crises! Political leadership is gone; corrupted by big banks; the IMF and corporate drive to make wall street happy. But wall street is corrupt also; you have a better chance of winning in Vegas! Social security is 7 trillion in debt! Medicare is 34 trillion in debt! Derivatives are 100 trillion in paper (worthless paper?). Were not on the gold standard anymore; we have fees coming at us from all directions. Our rights have become privileges?
I could go on and on; but some would just label me a conspiracy nut; so I will let you find how the dots connect.
So, is it any wonder that were scared! Is the American way of life over? Can we wake up and stop blaming everyone else and look into the mirror and find, that we are the problem; that we are the solution! I sometimes wonder why Boeing and the union
are always at odds. Is it just a respect issue? Not seeing the other, as a useful component to the entire body, our symbol in the sky? Perhaps it's time to look at each other as a team and not as an adversary. But this would take a leap of faith and many
working at this company can't see anything but the past to condemn each other. With so much suspicion in the wings, it's hard to make a move first, in a direction other than one up man-ship or a sign of weakness.
I think the first place to start, is a state of being in the right mind to listen; not just the word itself - but the meaning behind it.
If we cannot change our way of doing, our so called business; then we are doomed to like Russia before us; in total collapse of our way of life and the future as we know it. There is to much at stake here, to just stand in the way of progress. I could tell
you it's the two party system; or the capitalistic system we live under. But alas, I think it's the state of man; his fear of the
unknown. But like a favorite episode of Star Trek, when the majority was afraid of the minority metamorphosing and what impact that would have on the other group, if the minority metamorphosis into something different; leading the majority to find it's self changing it's very nature. Would fear cause that potential nature to run for it's life or destroy itself. Would the nature of man metamorphosize into what he was meant to be all along?
One machinist view of many years in the trenches.....
2. Look back at what happened to steel companies, airlines, and now Detroit.
3.. Get a picture of the Boeing employee parking lot and tell me what you see.
Boeing management is not.
The outsourcing model the IAM is striking over has led to a 15 month delay to the 787, and a decrease in the share price of more than 40%.
There may come a day when Boeing's management can execute their outsourcing plan to profitability on an airplane program. But at the rate it has gone thus far, it is reasonable for shareholder to assume this day is more than 3 years away, so....
get the GD contract done, get your people back to work and stop arguing over castles in the sky outsourcing models you've failed to execute to plan for the past 4 years.
We are going into a recession, if we are not already there. Let's see if everyone can work together for a common goal- profitability... Hurting BA sales will just make both sides the loser.
And you know what? Executives make big salaries - that's how it works. They make more than you because they're WORTH more than you. Think about it...a machinist quits/retires/gets fired. Who cares? Shareholders don't notice, the company just hires another one, and they probably get more work out of him for awhile, because the new guy doesn't have seniority so he's not as free to sit around doing nothing all day. And life goes on. It's the same for engineers or middle management - union or not. But if the company loses an executive it's huge - it drives the stock price, along with investor and customer confidence in the company. So maybe McNerny did may $12 million last year - so what? If he's the face the customers (civil or government) and investors want to see, then I say let him have his money! Instead of bitching about it you could always get off your asses, get MBAs, and start applying yourselves so that someday YOU could be CEOs. But instead you'll continue to delude yourselves into thinking you're irreplacable and entirely responsible for the company's turnaround. I wonder though, have any of you stiking union members noticed that the stock price has dropped by nearly 50% in the last 9 months? Or that we haven't won a big military contract in quite some time - including the tanker, which was most likely overpriced due to the outrageous labor costs the company has to pay it's unskilled labor. Boeing may have a large backlog of orders now, but the only way the company can continue to be competetive is to keep it's costs down. So it is both thick-headed and short-sighted for the union to piss and moan about kicking in $50-$100/month for health insurance (like the rest of us), or having to, God-forbid, pay a $250 deductible at the hospital (like the rest of us), or whining about larger pensions when the plan that's currently in place for them is VERY good considering most companies have done away with pensions all-together - and not easy for the company to maintain, especially with people living longer.
So to sum up - you people need to get your greedy spoiled butts back to the assembly lines and be happy with everything you have. And leave your sense of entitlement at the door. If you don't think the company is treating you fairly, then f-ing quit and try to find a better deal somewhere else. Good luck, and don't let the door hit you in the ass on the way out.
So true.
If they cave, this company is headed in the same direction as the US auto industry. That means the stock will go down. A lot!
Let me understand this. The workers should accept whatever the company deems fair, without complaint, because that's exactly what you do.
it's exactly that kind of thinking that continues the downward spiral in wages and benefits in America.
I have to pay for health care, so why shouldn't you! I get crappy raises, so why shouldn't you! I have no job security, so why should you!
Your totally spineless, and unfortunantly, your not alone.
Thank You to the good brother and sisters of the IAM at Boeing for standing up and saying ENOUGH!
No disrespect,gettinghose... I hope you do get your bonus,but not at the expense of working people.
Whats wrong, the ventilation system not working too well in your cubical this morning.
"Fineprint" brought up the point of looking back at the last couple of contracts. (well put I might add and a good idea) Times were bad for everyone, and the unions as a whole asked for "nothing" to help keep the company in the green in those tough times. Boeing was happy to give us exactly that, "nothing". As I remember it, the only sticking point was that Boeing tried to cut off medical benefits to the retired folk and all new hires as well. The old "devide and conquer" tactic. We didn't fall for it. Boeing backed off, and the "nothing gained" contracts passed.
So now, after helping to pull this company through that time, and speed up production while we we're at it, "gettinghosed" thinks we're not entitled to any kind of a pay raise what so ever.
"gettinghosed" Maybe you should try and open a window for some fresh air. Oh thats right, your in a cubical, sorry!
I've over a quarter century of aircraft experience and not all of it is from working at Boeing. It is all hands on too. I have, and am required to have, licenses, certificates, qualifications, annual certs, bi-annual certs, documentation out the kazoo. Every task I do on an aircraft has to be exactly correct everytime without fail. I am proud of the work that I do and of the quality that it is. I've shaken the hands of our airline customers that accept these flying machines. Some of those customers know me by name and ask for me by name as well when there's a problem and they want it fixed right. Without going into details I can honestly say that I've saved this company "millions" through my work ethic and dedication to the task at hand. Our airline customers recognize this by coming back time and again, but Boeing would rather not.
I am like every other working stiff in america. I want to better myself and the quality of life for my family. I don't consider me or my fellow employees "worthless union pricks" as you so eloquently put it. You might try and look in the mirror, just scratch out the word "union".
I hope you never hold a union job. I'm sure you never will because there will always be non-critical jobs around for people like you. The kind of people that just roll over and pee on themselves instead of standing up and fighting for what's due them. Good Luck to you!
So when you go home tonight have your mommy make you a sandwich with the crusts cut off. Go to your room and type us out another story of the evil unions. This time maybe leave out the potty talk, it makes the story even more immature.
By the way, what do you like on your "Bowl of rice" butter or how about a little Soy?
This also applies to the obscenely high pay for US corporate executives. If they're that good, why the big worries over golden parachutes? Most of them are there thru 80% luck and timing, not business skills. Even if they opt to go down with the ship, these execs have a lot more job mobility.
Globalization is the great equalizer.
Keep in mind, we're competing against the top of the food chain in places like India and China. The botttom is lucky to get a bowl of rice a week. The disparity of wealth distribution is greater in these places.
Please go to boeing.com\careers Be prepared to work 19 days on and 2 off for the rest of your boeing career. You will only have to work 8 hour shifts on Saturday and Sunday, all other days may require 10+ hours. You will be required to document and fix all vendor supplied non compliant parts. You will do this on overtime. You will be required to work with chemicals known by the state of California to cause cancer, nerve damage, etc. You will be required to do repetitive tasks in unergonomic positions. You may be required to work in confined areas that require special ventilation. You may be required to work with your hands overhead all shift. You may be required to work on your knees all shift. You may be required to work in a squatting position all shift. Most likely your knees and back will give you problems after 20 years of this work. You will start out at $12.72 per hour but will work up at a rate of $.50 per hour every 6 months.
Just because you had the support to get an education doesn't make you any better than anyone else. The bottom line is Boeing can't find enough people to do airplane assembly. They have been hiring for the last 3 years. If the work was as easy as you make it out to be there wouldn't be a shortage of airplane assemblers and new hires wouldn't be quitting. We also wouldn't be on strike. It's not as good of a gig as you may think. You are free to apply and try it out.
It seems that everyone takes for granted that every person who works at Boeing makes the maximum amount. I am a new hire who will have 6 months in October. I bring 25+ years of experience to my job which is currently paying 11.93 per hour. I took a 60% pay cut to start at Boeing. Believe me, it wasn't by choice. I'm afraid I won't be able to make my mortgage payment again... seems having experience and being good at what you do doesn't mean much to Boeing.
If all of you think I am being greedy for wanting to make enough to support my family during the 6 years it takes to get to that pubished 65K per year.
Let's get out the ole' calculator...
11.93 x 1920 hours per year (typical) = $22905.60 before taxes....
$1800.00 mortgage payment x 12 months = $21600.00
I can't keep a roof over my families head and you think I am being greedy while the CEO of Boeing makes nearly twice that amount before his first break EVERY DAY.
Not only am I disgusted by that fact. I am appalled that the general public thinks people like me are being greedy. All I've every wanted was a home for my family, and now I can't have that anymore.
I am not proud to work for Boeing. I am ashamed.....
'prevailing wage and benefits around the country' is not light.
No where in the USA do people work like the IAM workers at Boeing.
If one where to extend your request, we'd need to look at EADS's Airbus.
Not even the IAM is asking for that.
The question is 'who needs to do what now?'.
Management made an offer. It was soundly rejected.
Currently, it appears we're going to burn thru ~$100mil/day 'cooling off'.
And never mind now 'cool' that'll make folks like "On Strike Too".
You want heat??? wait til this thing goes on 3 months and the share price drops to 30.
As a union member for over 16 years, I agree. The face we have put on the union tag is reprehensible. Union shops are run like dictatorships. You do as the leadership says or you get punished (not fun).
I did not vote for or against this strike. I think striking at this time is inappropriate and the goal does not justify the means. If I voted for the strike I would not be voting my conscious. If I voted against the strike I would have been on the s**t list of the union leaders. So I opted out.
Bottom line, the union leaders will continue to serve their own interests. They are the only ones holding the power in this entire situation. BA management is being attacked by a bunch of corporate terrorists and hard-working line workers are defenseless to stand up to the leadership at IAM751.
You are correct, I am there for the money and benefits. I do not enjoy working for Boeing. If I did my opinion may be different. I've been there for 20 years and it's only now that the cumulative effects of building airplanes are starting to show up on my body.
As far as looking for another job, I am. I have experience in other fields and have some college. I no longer need the Boeing pay to survive. I'm certainly in a good postion as far as job seeking goes, but I'm not going to take just anything.
As for taking the current Boeing offer, no thanks. I won't vote to lose money and benefits which is what the results would of been for me had this contract passed. I did the math, I read the contract. I don't trust Boeing or the IAM when it comes to things that affect my life this much. I make my own decisions for my own reasons. Same as you make yours.
As for the backbone comment, please keep it civil. You are the one who didn't vote because you were afraid of what your coworkers would think of you. I respect your right to vote for what you think is right. I'm sure you have reasons for thinking it's right to roll over on retirees and stick more costs on your fellow workers. Usually the only members who vote for less have financial problems and suffer severe hardship during a strike. If that's the case with you I can empathize as I've been there myself. It's very easy to get used to the big paycheck when working mandatory OT.
As for the selfish comment, well we just aren't going to see eye to eye on that one. When debate turns to name calling it's usually because the name caller has run out of logical points.
Good luck on your search. I am hoping to finish 20 years where I am. I hope my job will still be there.
One last note…I am working on my MBA which “evil” corporate Boeing is paying 100%...you have no idea how many workers in America wished that their “evil” company provided this benefit…I have worked for Raytheon and Lockheed Martin and neither one had a pension…Raytheon wanted $11,000 a year for family medical...unionites live in a world of their own and do not get the real world and how good they have it...I love quotes from 20 and 25 year union veterans that show their clear lack of knowledge of real world economics and business...saving American jobs my ass…you are part of the problem.
Good luck on your search and good riddance...the quicker we loose jack asses like you the healthier this company will be...what do you do...push premade wire packets into door frames, connect a couple cannon plugs and call it a day...skilled labor...what a laugh...whats the OJT 3 days?...
you have 25+ years of experience and come to Boeing obviously with your fired tail between you legs asking for a job...Boeing makes you an offer that you did "CHOOSE" and now you want to whine about it...please take you 25+ years of attitude someplace else...oh thats right no one else wants you...
Thank you for the insight by the way...if I could have started my career knowing that in 6 years I would be at 65k I would have been happy...that is what you idiots (I am using that as the nicest word I can think of) do not get...your whining sounds so pathetic to the rest of the country...so many people would be thankful to have the pay/benefits you have to do the labor you do...and if you cannot find enough GED candidates in Seattle than Boeing should move the plants to a better city/state...one that is not so nice to idiots...I mean unions.
The State of California's cancerous substance designations should prompt you to delegate this obviously too dangerous work to the same people who are now mowing the lawns and trimming the trees of Californians: the folks from South of the border and beyond.
Boeing clearly understands this need and does not wish to 'expose' you guys to the apparently unsustainable and unpleasant working conditions you so clearly complained about.
This leaves you and your buddies free to pursue other career options.
Quoted from seekingalpha.com/artic...
"With the labor strike at Boeing's now entering its third week, Cramer said the real loser is not the aircraft maker or its employees but the company's suppliers. He put Boeing, along with all of its suppliers; squarely in the Thursday "Sell Block" segment. Cramer said with both sides of the labor dispute gearing for the long haul, Boeing's suppliers just cannot be owned. Included are:
Spirit AeroSystems, which derives 87% of its sales from the now idled Boeing, has already cut its workforce to a three-day work week and said layoffs are looming. The company will see a 6% hit to 2008 earnings if the strike lasts a month.
Rockwell Automation depends on Boeing for 14% of its sales. The company has just laid off 80 people.
Precision Castparts is Cramer’s favorite. Cramer said the company gets 17% of its sales from Boeing and will take a 1.7% earnings hit if the strike lasts a month.
Goodrich, maker of aircraft wheels and brakes, and composite maker, Hexcel, are at risk of big losses from a lengthy strike."
The main point often missed is that the Boeing outsourcing model didn't work. At best is was poorly executed. More likely the very concept is fatally flawed. The Boeing execs should be proposing changing it - but they just can't fess up to being wrong. I am glad that the union is forcing the discussion.
I have a substantial stake in Boeing and Boeing's success through my retirement, my 401K holding Boeing, and my salary coming from Boeing. I want Boeing to succeed and thrive for my own personal and selfish reasons, as well as pride in Boeing itself.
Frankly, the current senior management at Boeing has made a number of mistakes that cause me to be concerned about the future of Boeing, which is tightly tied to my own future.
It is time for shareholders to consider forcing a management change.