As Profits Soar, Boeing Demands Concessions, Driving Machinists On Strike

Boeing profits have soared 828 percent, but the company demands concessions. Photo: Jim Levitt

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.

boeing strike - ballot
Boeing Machinists rejected the contract offer and voted 87 percent to strike. Photo: Jim Levitt

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.

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“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.”

POSTPONE DREAMLINER

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.

Comments

I believe the contracts at Boeing should be able to stand on their own merit. Why do union members have to be bribed to accept contracts, usually because they are sub-standard. I too like money as most people do. But a GWI is by far superior many times over a bonus.
A GWI is a benefit that gives for the rest of your career at Boeing, a bonus although pleasant will be eaten up with taxes and spent in a blink of an eye for most members. That said it does come in handy. I would propose first going for a real GWI since we haven't had one in 4 years and then add the bone-us to the mix. Now that we've been on strike how about $1,000 for each week we are out. Just looking at the big picture long term verses instant gratification.

Anonymous (not verified) | 09/30/08

In MY opinion the crux of this contract is that there are so many issues that so many different factions of the membership can find something wrong with it. Either Doug Kight and Jim McNearny aren't as bright as their pay reflects, or they were welcoming of a strike for different business case reasons.
I'm fine with saying I want it all!
I want the Company to recognize the value of those who the Company has called on to help them revive the woes of the 787 program, yet within this contract they want to disregard them by wording that tries to replace them with lower paid inexperienced suppliers. I want the company to remove any wording bringing suppliers in the doors.
I want the EIP, I want GWIs, I want .75 company matching on my VIP, I want my overtime hours included within my wage in determining my retirement pention.
To those outside of Boeing it sounds as though I want a lot, but simply; I want Boeing to treat me, respect me, and offer me within my contract the things that the company offers every other group at the Boeing Company. I will stand up for the value of labor and the middle class! I will stay out "One day longer" in support of the company recognizing the value of those who are building the plane, and valuing those who the company turns to when they need the job done.

Anonymous (not verified) | 10/01/08

Kudos to you Anon poster. You probably said it best in 1000 words or less then I have ever seen written. You should send that to the local papers for their OP/ED. I believe this strike IS NOT about economics because obviously the company has surplus revenue, but for other deeper more frightful reasons that threaten the core of blue collar labor in this country. Look no further then what Vought is proposing to IAM 735 and what Spirit Aero is proposing to the Kansas folks. This is a concerted attack on labor across the aerospace industry. Period.

Anonymous (not verified) | 09/29/08

I agree with the above poster. Don Grinde does not speak for anyone but himself. He is NOT a Union official. His opinions are just that. HIS. I personally would have no problem taking a percentage production bonus plus the GWI that was proposed. The rest of the changes in the contract is why I voted the contract down. The money incentives were not enough, but not a deal breaker for me. Again. Just MY opinion.

Everett IAM Member (not verified) | 09/26/08

I'll have to disagree about not wanting a bonus. The minimum bonus offered would add up to the equivalant of an .80 cent raise over the life of the contract, I doubt we'll see a further general wage increase to cover that. Also, I suppose we're going to forget about the incentive plan that so many members were groaning about because it was uncertain how much we would get. Whether it would have amounted to $100 or $10,000, we can kiss that goodbye if we "don't want bonus money."