As Profits Soar, Boeing Demands Concessions, Driving Machinists On Strike
Aircraft maker Boeing has been groaning under a $275 million backlog of orders for new airplanes that waste less fuel. The company booked a $4.1 billion profit last year, and its principal union, the Machinists (IAM), says Boeing’s profits have soared by 828 percent in recent years.
But all that cash didn’t stop the company from demanding concessions from 27,000 employees. IAM members called the company’s bluff and struck, after rejecting a final offer on September 4 with an 80 percent vote.
Members voted 87 percent to strike and started picketing September 6, although some members were in front of the plant days earlier, saying they’d had enough of Boeing’s arrogance.
The union prepared for the strike by mobilizing members in a series of workplace and out-of-plant actions. One contract-time tradition is an explosion of noise on the assembly line every hour on the hour, as workers bang on their machines and yell. Outside the plant, thousands of union members demonstrated. When one action was planned in front of the Boeing logo, the company took the logo down.
The union is using the strike to attack the company’s relentless outsourcing. In the 2002 contract Boeing won the ability to use non-union suppliers for more parts. The union wants a six-month window where it could bid on work before it is outsourced.
“If the Machinists can come up with a proposal and show that we can do it cheaper, better, that quality work is there, we should be able to keep that work in-house,” said Local 751A steward Steve Parsley.
Boeing hasn’t shown much interest in letting the union make its case. The company complained the union was trying to tell it how to run the business, and instead touted its proposed 11 percent wage boost over three years. Boeing negotiator Doug Kight reportedly called his proposal “the best contract offer in America this year.”
CONCESSIONS ARE SO LAST CONTRACT
The union disagrees. Concessions in previous contracts mean new hires in some classifications earn as little as $10 an hour, and have since the early 1990s.
Boeing is offering an increase of $2.28 to the lowest-paid, but without increases across the board, workers with a few years seniority will make the same as those fresh off the street.
“Their pay raises are moot,” Parsley said. “We haven’t received a raise in the last four years. You think about the next three years, and that’s 11 percent spread over seven years.”
The union estimates labor costs are 5 to 7 percent per airplane.
“Other industries would kill to have that,” said IAM District 751 spokesperson Connie Kelliher.
Boeing’s proposal, however, would increase employee-paid medical premiums and prescription costs and take away the family’s right to a pension if a worker dies.
“Boeing advertised the contract like they’re giving us money but there are all kinds of takeaways,” said Jason Redrup, Local 751A financial secretary. “They need to leave our medical plan alone and take the takeaways off the table.”
Boeing executives say a prolonged strike could wound the company, which is behind schedule on the fuel-saving Dreamliner 787 and has seen high demand ramp up production by 50 percent this year.
A four-week strike in 2005 reportedly delayed delivery of 21 planes. IAM members have walked out during three of the last six contract negotiations
“Everyone’s waiting to see who’ll break first and we doubt it will be us,” said Redrup. “We have a veteran workforce, with members who’ve been on strike three or four times in their careers.”
Nearly two weeks into the strike, industry analysts said Boeing was losing $100 million in revenue.
CLOSING THE WAGE GAP
Strike activists said they want to repair the growing wage gap between top-scale workers and those further down the ladder, and to increase new hires’ pay. Five thousand members make less than $30,000 a year, the union says.
“We really don’t want bonus money,” said 751A member Don Grinde. “We just want level wage increases for everyone so that no one’s getting locked out.”
Last month, engineers in the Society of Professional Employees in Aerospace joined the Machinists in asking Boeing to bring back jobs outsourced during early production of the 787. SPEEA’s contract, covering 21,000 Boeing engineers, expires in December.