Boeing Machinists Strike
Despite warnings that doing so would bankrupt the company, Boeing machinists voted to go out on strike.
Machinists at Boeing Co. voted overwhelmingly Thursday to strike, rejecting a three-year contract proposal their leaders had deemed “insulting.” A Boeing spokesman said the strike vote meant the company would immediately stop assembling commercial airplanes, dealing a blow to the jet maker just as business at its commercial airplanes division appeared to be picking up. “We don’t intend to assemble airplanes during this strike,” said Charles Bickers, a spokesman for Chicago-based Boeing.
The strike will affect about 18,400 Machinists who assemble Boeing’s commercial airplanes and some key components in the Seattle area, Gresham, Ore., and Wichita, Kan. The union last went on strike in 1995, when workers walked out for 69 days.
Union leaders said their members voted 86 percent in favor of a strike beginning at 12:01 a.m. local time Friday. Under union rules, the contract would have been automatically ratified Ã¢€” and workers would have stayed on the job Ã¢€” unless two-thirds of the union members voted to strike.
Company officials had earlier said they feared a strike would send customers to competitors, notably rival Airbus SAS, and questioned whether the commercial operations could recover. Bickers called the strike decision “disappointing.” He said the company could continue to do other work, such as designing new aircraft, but that there was no way to build airplanes without those workers.
“If the company wants to talk, they can call me,” Mark Blondin, president of Seattle-based Machinists District Lodge 751, said after announcing the strike authorization. Union leaders were unwilling to provide actual vote tallies for the strike authorization and a separate vote on the contract offer. Leaders had urged members to “reject this insulting Boeing proposal,” saying it fell woefully short on their top issues including pension payments and increased health care costs. District Lodge 751 is negotiating for employees in all three states, although some terms differ based on location.
News of the strike vote was met by a chorus of cheers, hugs and backslapping by hundreds of workers gathered at the union’s hall in south Seattle. Larry Weckhorst, a 16-year Boeing veteran from suburban Seattle, said he anticipated a strike was coming because “the mood was just different from three years ago” when the Machinists accepted what they considered a sub-par contract because of the airline industry’s dismal state after the 2001 attacks. Now “the production rates are going up, the stock price is going up,” Weckhorst, 47, said. He added: “That pension (issue) is huge. Look at how old our work force is.”
The company offered Machinists Ã¢€” who average 49 years of age Ã¢€” a pension of $66 per month for every year worked, up from $60 currently. The union says that falls woefully short of what its workers deserve. Late Thursday, Bickers continued to defend the defeated contract proposal as a “comprehensive contract that compared favorably with others in our industry and in the regions where we operate.” Workers represented in the talks now receive an average of $59,000 a year. The company had said they would earn about $62,500 a year by the end of the new contract, excluding overtime and other extra payouts.
The union also was critical of increased health care costs and a proposal to eliminate retiree medical benefits for workers hired after July 2006, with the exception of laid-off workers who are recalled. For about 900 union-represented workers in Wichita, the company offered no general wage increase but a one-time payout of $2,800, which would increase to $4,200 for employees who chose to deposit the money in a Boeing 401(k)-type retirement account. “They wanted us to turn our backs on our brothers and sisters in Wichita,” Blondin told the Seattle union hall crowd, to a loud chorus of boos. “They wanted us to sell out future hires.”
While I am not a fan of unions generally and strikes in particular, I understand the machinists’ frustration here. A $60,000 annual salary is not bad in Seattle–although it’s terrific in Wichita—but these are highly skilled laborers. And health care costs are going through the roof and Social Security is in trouble, so the non-salary issues are huge. They signed what they considered a bad contract under duress the previous go-round and thought they would do better this time because the company is doing better now.
Of course, if Boeing goes out of the commercial airliner business, the machinists will find it hard to ply their trade. We’ll soon see whether company officials are bluffing when they say they simply can’t afford to pay more in the current climate of competition. Airbus has a huge advantage because of EU subsidies and the much higher likelihood EU companies will buy from them. With the American airline industry continuing to struggle, there’s unlikely to be a huge demand for Boeing’s commercial product–let alone the ability to raise prices to absorb these added costs.