January 2nd, 2014

WA State fetes Boeing which screws its machinists

Washington State Governor Jay Inslee was once a liberal democrat as Congressman. Now he fawns over one of the state’s two large employers — Boeing — as if he was once an executive there. After McDonnell-Douglas merged in 1997, Boeing became the only surviving American aircraft manufacturer. Its 787 Dreamliner model was fraught with problems when launched. It’s newest commercial project is to build the wide-body 777X model. Assembly is scheduled for the Seattle area. But before starting, Boeing decided to alter its contractual relationship with a big part of its laborforce — the machinists. The corporation is behaving as an unscrupulous monopoly.

Boeing moved its corporate headquarters from Seattle, its home since William Boeing bought his first airplane factory site in 1910. It settled contentious strikes, especially with its machinist employees (the IAM, Local 751 in Seattle) the most recent contract expires in 2016! However, negotiating for changing terms began in 2013. Boeing demanded more “givebacks,” concessions, by the union.

Boeing is unquestionably profitable: a 12% jump in 2013 third-quarter profits, 80% increase in its stock price in 2013, a 50% larger dividend paid to stockholders, a $10 billion buyback of stock to raise the price instead of investing the billions in employees, and its CEO was paid $27.5 million (with total compensation including $7.5 million in stock and options awards, as well as changes in the value of his pension benefits, according to the Wall Street Journal).

The 31,000 IAM local members had just been made aware that Boeing wanted a new 11 year extension with new concessions a week before they rejected (67% against) the proposal in a Nov. 2013 vote. Union leaders called the Boeing surprise negotiation tactic an ultimatum. Boeing demanded:

– an end to the defined-benefit pension as of 2016, ending accruals for all workers and replacing it with a 401(k)-type structure with very small company contributions.
– steep increases in medical payments
– change to the pay structure that would mean new workers would not reach top pay for 20 years (minimum pay is $15, maximum is $35.25). Wage increases would have been 1 percent every other year.

After the vote, the Washington State legislature met in special session to quickly offer $8.7 billion in tax breaks over 16 years to Boeing if it builds all of the 777X in the state. In the past, Boeing took State money only to manufacture wings in Japan and moved 787 production to union-free South Carolina. Boeing then accepted bids from 22 other states and cities willing to house 777X production with cheaper labor.

Then, a strange thing happened within the union. The International got involved over the protests of Local 751 officials. The International president and a shady “consultant” sided with Boeing. Boeing submitted another proposal in December. The Local 751 said it was the same offer, too little changed. The International union folks claimed it was a big, positive change and called for another vote, despite the 2-to-1 defeat in November. The date was set for Jan. 3, a time when most veteran workers would still be off work. The International changed the voting procedures, too. It all sounds nefarious.

Read the account of these internecine union dealings by Jim Levitt, a 35-year veteran Boeing machinist.

The Seattle area machinists have been blackmailed and extorted by both the employer and their International union office. Politicians have called publicly for a re-vote and acceptance of the contract demanding the end to fixed pensions, a staple of unionized life in America. The conversion to 401-K plans deprives workers of security after retirement. Huge 401-K fees erode the invested principal and workers lose everything when the stock market crashes (as it did in 2008, this is not a hypothetical outcome).

Because I live in the area, I heard a disgusting radio ad telling machinists to think of their children and grandchildren. By voting yes the ad copy read, they and all future generations will have jobs here. Bunk. There are no guarantees anymore.

Boeing’s history of finding cheap labor and turning its back on unions prove that by continuing concessions only encourages Boeing to respect its workers less, not more.

Read Local 751’s comparison of Boeing proposals to set the record straight.


<-- Read the complete WBI Blog

Tags: , , , , ,

This entry was posted on Thursday, January 2nd, 2014 at 5:23 pm and is filed under Commentary by G. Namie, Employers Gone Wild: Doing Bad Things, Fairness & Social Justice Denied, Unions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Having trouble? Click Here for Comments Guide

Facebook Comments


Disqus Comments

This site is best viewed with Firefox web browser. Click here to upgrade to Firefox for free. X