Boeing has faced a slew of negative news over the last six years, with nearly nothing but issues. Later this month, it may add a strike by 32,000 workers to its list of difficulties.
The contract between Boeing and the International Association of Machinists expires at 11:59 p.m. PT on September 12. Without a new contract, the workers who construct Boeing’s jets in Washington state are poised to launch the company’s first strike in 16 years. According to the chairman of the local union, the odds of reaching an agreement are slim right now.
“We’re far apart on all the main issues – wages, health care, retirement, time off,” Jon Holden, president of IAM District 751, told CNN last week. “We continue to work through that, but it’s been a tough slog to get through.”
Boeing’s Next Big Problem Could Be A Strike By 32,000 Workers
It’s just the latest in a string of serious and high-profile issues at a company that has dealt with fatal crashes blamed on a design flaw in its best-selling jet, accusations that it prioritized profits and production speed over quality and safety, plummeting aircraft sales, an agreement to plead guilty to criminal charges of deceiving regulators, and massive financial losses covered by soaring debt levels.
Both sides claim they want to reach an agreement without a strike. However, rank-and-file union members’ outrage at recent contract concessions and challenges at the once-proud company may make achieving that agreement in the short term challenging.
“We continue to bargain in good faith as we focus on the topics that are important to our employees and their families,” according to Boeing’s statement. “We’re confident we can reach a deal that balances the needs of our employees and the business realities we face as a company.”
However, Holden stated that any contract that would gain the approval of the rank-and-file must recoup some of the concessions the union gave up in two previous accords since 2008.
Both of these discussions were about contract extensions, not new deals. In both situations, the union felt compelled to agree to concessions, such as increased member payments for health insurance and the elimination of traditional pension schemes, or risk losing thousands of jobs. Boeing threatened to create nonunion plants to produce the 737 Max and 777X. Boeing, which already has a nonunion 787 Dreamliner plant in South Carolina, canceled plans for new nonunion facilities as part of those agreements.
Boeing enters these discussions with a new CEO, Kelly Ortberg, who took the job on August 8. He said that he intends to “reset our relationship” with the union after meeting with Holden and other union leaders during his first week on the job. However, Holden stated that he has noticed no differences in Boeing’s negotiating position.
In July, Ortberg’s predecessor, former CEO Dave Calhoun, likewise told investors that Boeing’s objective is to avoid a strike, implying that the company is willing to pay whatever it takes to avoid a work stoppage.
“We know the wage demands will be high,” he said. “We are not scared to treat our staff well during this process. So, we’ll just work as hard as we can to avoid a strike.”
According to the corporation, IAM members’ incomes have climbed by 60% in the last ten years due to regular wage increases, cost-of-living adjustments, and incentive compensation. However, the union remains dissatisfied with the previous compromises. It also seeks increased time off and better employment guarantees to avoid losing jobs to nonunion plants.
“We cannot go through another period where a year or two from now where our jobs are threatened,” Holden pointed out.
Several unions, including the Teamsters at UPS and the United Auto Workers at GM, Ford, and Stellantis, received double-digit salary increases in recent union agreements. However, in those cases, they were bargaining with firms making record profits and had ample resources to meet union requests.
By comparison, Boeing’s issues have resulted in $33.3 billion in core operating losses over the last five years, driving the corporation into deep debt. It is in danger of having its debt downgraded to junk bond status, but Holden argues that the union still has bargaining power in these negotiations.
Despite its issues, Boeing remains a huge power in the US economy, and shutting it down will have far-reaching consequences. Beyond the 32,000 union members among the almost 150,000 US employees, the corporation calculates its economic impact at $79 billion, supporting 1.6 million direct and indirect jobs at more than 9,900 suppliers in all 50 states.
Boeing’s Next Big Problem Could Be A Strike By 32,000 Workers
However, more critically, Boeing is one of just two main providers of commercial aeroplanes to the airline sector. The industry is already coping with Boeing’s delayed deliveries, which cannot be resumed until the company addresses concerns about the safety and quality of its aircraft.
“They haven’t said they can’t afford our proposals,” he told me. “They’re reasonable. We’re in a difficult situation due to their actions to continue boosting dividends and share repurchases while reducing R&D. They have been unable to launch a new airplane. We are in this position as a result of such judgments and crashes.
One of the union’s negotiation objectives is to have a union representative on the Boeing board of directors, which has been heavily criticized for the company’s numerous issues.
“The board certainly deserves to be criticized,” Holden added. “We do not want to run the company. However, we want to ensure that our perspectives are heard regarding the decisions. We adore the Boeing Company. The board members don’t. They compromised its integrity.
SOURCE | AP
