Boeing, 777x, and Machinists Union

[supernova72]

I thought the 'no' vote just meant that Seattle now had to bid for the work instead of being handed the work. I took that to mean that each location would bid on the 777X and the site with the best numbers would win the work.

Seattle is not out of the running entirely no. What is now off the table is the $8.7B tax incentive pkg which is dependent on a Yes vote. The day after the NO vote, Boeing exec site evaluation teams were out on the road talking to existing Boeing sites outside of WA state (Salt Lake, Huntsville, San Antonio, SC, Long Beach). Some of these are smallerish subsidiaries of Boeing and some are full on existing operations.

Long Beach is interesting in that the C-17 is currently produced there but winding down by 2015--timing would be about right and the workforce knows how to mfg large aircraft. Downside---state tax structure & UAW contract in place (not much labor savings potentially).

The current ave salary for the IAM is ~ $85K a year...a bit skewed right due to the senior existing workforce at the highend being quite a large pool.

Most new hires out of HS I'm told start at about $15 an hour (grade 4). 50 cent raises every six months, 2% GWI, COLA included. Incentive plan in place now as well. You can max out in your grade in 6 years as was mentioned by Ha.

IAM District 751 wage card

 

[samclem]

This could be a big loss for our region, our state, and likely also the USA.

If Boeing sets up production in another domestic factory where they can keep costs under control and thereby remain competitive for the long term, I don't think it will be a loss for the USA. And it will be a big gain for some other region where, apparently, people were more eager to have the work.

 

[NW-Bound]

+1

Boeing does not have a monopoly and has to compete with Airbus. A lower production cost helps.

If Boeing sets up production in another domestic factory where they can keep costs under control and thereby remain competitive for the long term, I don't think it will be a loss for the USA. And it will be a big gain for some other region where, apparently, people were more eager to have the work.

 

[tinlizzy]

The IAM's summary of the (now rejected) contract proposal FWIW.

http://www.iam751.org/pages/t2013/Proposal_Summaryweb.pdf

Third paragraph
The parties agree that the Company may subcontract or outsource certain 777X wing fabrication and assembly work packages, in whole or part, in order to create capacity for other 777X work packages in the Puget Sound facilities, and/or to efficiently utilize those facilities to accomplish the production and assembly of the 777X.

This is what I heard (Teamster gossip) was the reason for the no vote - subcontracting. Who's to say though whether Boeing really wants to use subcontractors or if they threw this language in the proposed contract to have a "concession" for future negotiations and make the end of the pension more palatable. Hard to say unless you're in the belly of the beast. Most everything you read in the media about rejected contracts is only conjecture.

 

[ziggy29]

If Boeing sets up production in another domestic factory where they can keep costs under control and thereby remain competitive for the long term, I don't think it will be a loss for the USA.

Not as much of a loss as losing out to Airbus, but every time jobs move to where labor is cheaper, we continue the race to the bottom and average real wages continue to fall. I'm not sure that's "good" for the USA either.

 

[haha]

If Boeing sets up production in another domestic factory where they can keep costs under control and thereby remain competitive for the long term, I don't think it will be a loss for the USA. And it will be a big gain for some other region where, apparently, people were more eager to have the work.

This may well be true if all goes well. But if the ball gets dropped, certainly not impossible with something this complex and perhaps with a less experienced workforce, it seems to me that Airbus might get a very good lead in this twin engine wide body market. As someone said above, it is not just hand skills, or even mostly hand skills. It is collected institutional knowledge about how things work.

Ha

 

[NW-Bound]

It is collected institutional knowledge about how things work.
Ha

Another twist is that with globalization, the suppliers to Boeing are also willing to sell to Airbus. Boeing itself buys from overseas suppliers, often as a way to win some support from foreign countries.

 

[Lsbcal]

This may well be true if all goes well. But if the ball gets dropped, certainly not impossible with something this complex and perhaps with a less experienced workforce, it seems to me that Airbus might get a very good lead in this twin engine wide body market. As someone said above, it is not just hand skills, or even mostly hand skills. It is collected institutional knowledge about how things work.

Ha

Don't some workers and managers move to sites that have been awarded contracts? Is all lost if a move occurs?

 

[explanade]

Not as much of a loss as losing out to Airbus, but every time jobs move to where labor is cheaper, we continue the race to the bottom and average real wages continue to fall. I'm not sure that's "good" for the USA either.

In these difficult economic times, there are always other workers willing to undercut your pay to take your job.

And it's easier to do so with characterizations of other workers as being "greedy," when they are negotiating with a company with some ridiculously large backlog.

Boeing is claiming the benefits changes are needed to remain competitive but under the old benefits structure, it's won all these contracts which will keep the company churning out existing aircraft for years.

While it continues to get new contracts.

 

[frayne]

When negotiations start again they will be driven by the upper levels of the management team and the union leadership at the national level. One might be surprised at how many labor contract negotiations get resolved in hotel conference rooms away from the lights and hoopla.

 

[Buckeye]

In these difficult economic times, there are always other workers willing to undercut your pay to take your job.

And it's easier to do so with characterizations of other workers as being "greedy," when they are negotiating with a company with some ridiculously large backlog.

Boeing is claiming the benefits changes are needed to remain competitive but under the old benefits structure, it's won all these contracts which will keep the company churning out existing aircraft for years.

While it continues to get new contracts.

+1

 

[ERD50]

Not as much of a loss as losing out to Airbus, but every time jobs move to where labor is cheaper, we continue the race to the bottom and average real wages continue to fall. I'm not sure that's "good" for the USA either.

More of this 'race to the bottom' talk?

If you were trying to feed your family in an area w/o much manufacturing, and a big manufacturing plant moved in, and offered you a steady job at better compensation than you could get previously, would that feel like a 'race to the bottom' to you?

Or would it look more like, 'Those greedy people in the old plant didn't know how good they had it. We're happy to work for less than they were asking.'

Is it bad to bring help to those who most need it? In other conversations, this is called re-distribution of wealth, and is applauded by many. Is it different when a corporation does it? Is it different when we do it (shop for the best value, rather than shop to support the highest wages on the producer side)?

I guess I don't see any reason to be judgmental about it. If we have freedoms, then we (and corporations) will make these choices. It's natural. And I think it is good for America. What long term good would it be to discourage efficiency and productivity?

-ERD50

 

[ShortInSeattle]

My work puts me in close contact with Aerospace companies in the area. And boy has this been the hot topic of the month! Here is some of the general chatter I've been hearing:

1) The consensus is that Boeing is NOT bluffing. They can easily take this work out of state.

2) It's not just about Boeing jobs. There are hundreds of aerospace suppliers who manufacture components and provide services to Boeing. So the loss of these jobs will likely hurt the local economy. Even if you ship parts, there is a big difference between a one hour drive and cross country shipping.

3) Our government has been seriously scrambling to provide incentives. Why? Other states are actively recruiting this piece of business.

4) The union seems to think our experienced labor force will make it impossible for Boeing to leave. The consensus is that they are wrong. There is plenty of talent available in other states.

5) Seattle recently elected a socialist city council person and she gave the union an impassioned speech to "take over the factories." This may just have added fuel to the fire.

Mainly what I am hearing is "the Union is being stupid and it will impact more than just them." Not a lot of happy campers.

SIS

 

[haha]

My work puts me in close contact with Aerospace companies in the area. And boy has this been the hot topic of the month! Here is some of the general chatter I've been hearing:

5) Seattle recently elected a socialist city council person and she gave the union an impassioned speech to "take over the factories." This may just have added fuel to the fire.

SIS

I listened to a playback of her speech today. Occupy Mukilteo! We don't need the executives! We have the workforce and we'll take the machines, and transform them to make nice peaceful buses instead of those war machines!(commercial planes I guess?)

Anymore I will believe anything around here. Another group is occupying a closed school south of where I live-Horace Mann School, which the school district wants to use for classes. It reminds me of movies I watched and books I read about anarchists a century ago,

Ha

 

[tulak]

I'm in Seattle and I think the message from Boeing has been pretty clear: we're gradually severing our ties with the PNW.

Corporate headquarters moved from Seattle: check.

Building planes outside of Seattle: check.

These two steps alone show they are ok with breaking ties to Seattle. This won't be an overnight change, but the reality is that it doesn't have to happen overnight, as others have pointed out. I don't think they enjoy being held hostage by the unions, who I believe will someday realize they had a decent offer.

Unfortunately future generations will be the ones most likely to suffer. I know if I was in my 20's or 30's, I would be hesitant to start a career at Boeing or anywhere dependent on Boeing. Unless I want to be in my 50's looking for new work or willing to relocate (assuming you could find a new job). No thanks.

Amen that Seattle isn't a one industry town anymore. It'll still hurt, but hopefully it will be gradual and can be absorbed by other industries.

 

[Gearhead Jim]

Having spent 36 years in an aviation union (Airline Pilots Assoc at United), I can tell you that the greed and stupidity of unions can be matched only by the greed and stupidity of management. At least 50% of the labor-management battles I observed, could have and should have been prevented by a little long term thinking on one or both sides.

Having said that, I suspect that the IAM is taking a gamble where the risk outweighs the reward in Seattle.

 

[Chuckanut]

Another twist is that with globalization, the suppliers to Boeing are also willing to sell to Airbus. Boeing itself buys from overseas suppliers, often as a way to win some support from foreign countries.

I believe some Airbus parts are made in Kansas. It's all part of making sure everybody has a positive interest in buying your plane.

 

[Chuckanut]

I'm in Seattle and I think the message from Boeing has been pretty clear: we're gradually severing our ties with the PNW.

Corporate headquarters moved from Seattle: check.

Building planes outside of Seattle: check.
<snip>
Amen that Seattle isn't a one industry town anymore. It'll still hurt, but hopefully it will be gradual and can be absorbed by other industries.

IMHO, the best thing our political leaders can do in the short and medium term is keep the tax concessions on the table, and get labor and management together to work this thing out. In the long term, they should work to get more diversity in the local business market so that as Boeing leaves the area as they seem to be planning, the state can shrug it off. The problem is that new businesses may not offer the kind of pay and benefits that the machinists just turned down.

 

[growing_older]

I think the message from Boeing has been pretty clear: we're gradually severing our ties with the PNW.

Well, and maybe no wonder. If the machinists turn down a commitment for decades of future work with angry rants about the company taking advantage of them, then the company will probably want the work to go somewhere else.

In an interesting twist, some big customers for 777x have been making public statements today that they want their planes built in ONE PLACE, whether it's the Puget Sound or elsewhere. But they do NOT want the kinds of problems the 787 suffered from being build by separate groups all over the world and then crammed together (sort of) in final assembly.

 

[NW-Bound]

I believe some Airbus parts are made in Kansas. It's all part of making sure everybody has a positive interest in buying your plane.

Yes. It's a game that everybody can and has to play.

Globalization is a great equalizer. One is in denial mode if he thinks otherwise.

 

[samclem]

Not as much of a loss as losing out to Airbus, but every time jobs move to where labor is cheaper, we continue the race to the bottom and average real wages continue to fall. I'm not sure that's "good" for the USA either.

Of course global competition is a reality, and so is the desire to be as profitable as possible even if a company has a wide "mote".
If a company is truly excellent (a history of reading the market right and building high-quality innovative products that meet market demand better than competitors do), it seems that the most sure-fire way to benefit from that excellence as an individual is to own some of that company rather than to work for it. Staying competitive and being a strong company may mean being very careful about assessing the value of everything that goes into the product and spending only what is required. Loyalty? I think it's more useful (and healthy) to be very objective and dispassionate about the employer/employee relationship.

 

[supernova72]

Just posted in the Seattle Times

"States Salivating for 777-X Feast"

States salivating for Boeing 777X feast | Local News | The Seattle Times

 

[tulak]

IMHO, the best thing our political leaders can do in the short and medium term is keep the tax concessions on the table, and get labor and management together to work this thing out. In the long term, they should work to get more diversity in the local business market so that as Boeing leaves the area as they seem to be planning, the state can shrug it off. The problem is that new businesses may not offer the kind of pay and benefits that the machinists just turned down.

As SIS pointed out earlier, we have a new council member in Seattle. I don't think anyone from Boeing is going to rush out to negotiate with her. Fortunately her actual ability to get anything done will be limited, since she's only one voice on the council. But she'll definitely get plenty of press.

http://www.votesawant.org/boeing_stop_the_blackmailing

"Boeing's attacks on its workforce, together with the company's demand for $8.7 billion in concessions from the State - to be paid for out of increased taxes on all workers and small businesses - can only be described as corporate blackmail. Kshama Sawant and Socialist Alternative stand in solidarity with Boeing workers in the face of these attacks. "

I understand not wanting to race to the bottom, but I think of this as running to the middle. These are still reasonably well paid jobs based on the educational requirements and locking them into our region for the next few decades is good. Remember the auto industry in Detroit. Where are these jobs now? And I don't think many in the southern states are complaining.

Just posted in the Seattle Times "States Salivating for 777-X Feast" States salivating for Boeing 777X feast | Local News | The Seattle Times

And I don't blame them. At some point we need to support job creators. If we don't, then somebody else will. It's great that the workers don't want to give in, but what will they say when they end up with nothing except an unemployment check?

 

[explanade]

It sounds like a lot of the workers already have good pay and pensions? Maybe a lot of them are near retirement?

So their votes are as much for future workers rather than themselves?

As far as the Detroit comparison, Boeing isn't in the dire straits that the car companies were. It's hardly in need of bailouts or concessions from labor.

 

[2B]

Dec 1969. My first layoff (from Boeing) and thus embarking on my cross country 30 yr career in aerospace. My apartment was the 46th to be vacated out of 90 total newly built within two years in Kent WA south of Seattle. 15 more after me had already given their notice and they were trying to void 700 plus teaching contracts because school enrollment was falling so rapidly. The ripple effect thu the local economy was huge. Our sister city Kobe Japan was sending us Care packages so the churches could feed 78,000 per week according to the paper.

You were layed off with my father. He was in the machinists union. That layoff let me see what poor looked like again. My father had been a machinist with a steel company that went belly up about a decade earlier.

I also graduated from high school that year. The high school was in Des Moines although we had a Kent address. There were no part time or summer jobs to be had. It made for a bleak start at college. I had a tuition scholarship and $600. I probably wouldn't have made it through the first year without the houseboy job I got.

Would the last person leaving Seattle please turn out the lights. I think that was the headline on the Seattle PI (or it could have been the Times).