Boeing 777X engineering assigned outside Washington State

The Seattle Times, Reuters and others are reporting that Boeing has decided to assign 777X engineering outside the State of Washington.

The news went down like the proverbial lead balloon in Seattle. The fear, of course, is that this is a precursor of locating the Final Assembly Line away from Everett, to either Charleston or the “undisclosed location” that is also said to be under consideration, which is thought to be Texas.

Boeing hasn’t ruled out doing engineering work in Seattle, but Boeing has been moving engineering jobs out of Washington all year as it clearly works to diminish the influence of SPEEA, the engineers’ union.

SPEEA Tweeted in response to The Seattle Times story, “This would appear to be work that had been outsourced on the 787 program…..not work being moved out of Puget Sound.”

We think this is an ominous development for Washington, but at the same time it could well be another of Boeing’s masterful chess game to extract incentives from Washington, South Carolina or the undisclosed state.

Update: The Wall Street Journal has this story. The WSJ broke the news.

This WSJ story from April is worth re-reading.

31 Comments on “Boeing 777X engineering assigned outside Washington State

  1. I can’t help wondering what kind of incentives Washington would be willing to give to get an Airbus presence now! SPEEA might not be to big a problem for a company used to dealing with European unions anyway. Lots of suppliers nearby as well.

    • I’m not sure that European unions are as unpredictable and damaging to companies as the SPEEA. I can’t speak for the French Unions, but I definitely know that Dutch Unions actually have constructive negotiations where the interests of the employer (and therefore the employee) are taken into account. A month of closure? Unthinkable. And I would guess unacceptable for a firm like Airbus.

      • A month of closure is a terrible thing, and obviously destructive to everyone involved. Why, though, is it only incumbent on the union to avoid such an impasse? What power does organization give you if you just will not exercise it when your core interests and demands are being totally ignored. People here talk about the militancy of American unions, but I just don’t see it. What I see is a militant American corporate class that is determined to eradicate any labor power or protections. Your observations about what Airbus would accept have little relevance to Boeing labor relations because Airbus (at least in its heretofore quasi-public form) would never wield antagonism and provocation against its employees just to demonstrate that it could.

        Desperation is not the same thing as militancy. Unionism is rapidly disappearing in this country, and there is no alternative labor protective institution arising to fill its place. In U.S. public dialog, the nonsensical idea, that our society has achieved a state of enlightenment in which no such institution is needed, is accepted as a serious idea and repeated endlessly. The IAM probably played their hand poorly in the last strike, but surely both parties to the impasse bear some blame.

      • The CEO of a large power distributing organisation once told me the thing he found worst was weak unions. When you are a large company it is a lot cheaper and easier to deal with a strong leadership which can deliver the agreement you make with them, instead of never ending small negotiations with every staff member or a weak leadership that can’t get the rank and file to pass the agreement.

        Always assuming said leadership is reasonable.

      • European companies know how to butter their bread, that’s why European workers have decent healthcare, 4 weeks annual holidays, humane working conditions and good pay.
        Would like to know how many American workers spend their short vacation gallivanting around the globe like their European counterparts? Not many I presume looking at the number of US passports issued?

      • Matt B,
        I agree with you that both parties share blame for the most recent strike at Boeing. However, I think there are still plenty of “militant” unions in the US.

        Even though I have never been a union member, several of my close friends and family members have had some fairly bad experiences with the unions they either were a part of or had to work with. One particular friend of mine experienced a good bit of harassment and intimidation when other union co-workers decided he was working too hard and making them look bad. I can’t remember the union but my friend is an electrician. A relative of mine did not want part of his union dues going to a political cause that he did not agree with, so he went to the firefighters union office to file the necessary paperwork. On the way out he had to endure disgusted looks and snide comments by other union members both at the office and then later on the job. Then there is the case of another relative, who worked for UAL as a low level manager and found a mechanic literally sleeping on the job. He rightly brought this to the attention of his supervisors only to later to have his boss tell him that nothing would be done about it. Apparently the union was protecting the worker from disciplinary action by threatening to file a racially based harassment claim against my relative.

        These kinds of stories seem to be still fairly common in the news, although for me, hearing them directly from people I trust carries much more weight than the stories often reported with spin in one direction or another. However, I will say that as far as this kind of militant behavior goes, the IAM and especially SPEEA seem to be fairly clean, at least from the new reports (or lack thereof) that I’ve seen.

        • major diff between old style trade unions and railroad featherbedding and current unions like IAM and SPEEA.

          For example- Seniority at SPEEA only has an effect on ranking
          AFTER 20 years, preventing bottom ranking unless well documented.

          few of the US unions have the 36 hour work week as in france or at least 4 weeks paid vacation from the get go.

          And no one has to join the union- but they do have to pay at least a portion of the regjular dues for membersip – they are called beck objectors and or agency fee payers depending

          The Biggest problem with SPEEA for example is membership apathy re their so called leaders, regular members not bothereing to attend board meetings or asking questions, and default putting up with incompetent and bullying staff.

          Just like the U.S democracy is hard work- it takes effort- which few are willing to provide- instead they just bitch – until they need the union to keep management from verbally or sometimes physically trying to harm them.

          Yep – been there dun that !

  2. Looks like the Jack Welch/GE and MDC takeover crowd are playing the same games that led to the 787 SNAFU. Why not survey those Engineers who have to redo a lot of stuff from Russia, and the issues with outsourcing critical stuff not only around the world but to essentially internal contract engineers. Most of the out of Seattle area Engineers are NOT used to commercial practices- and it becomes a tossup as to what detail kind of engineering is pushed across the country. It can be done, and can be worthwhile, but it takes a real management team to do it and understand it.

    Maybe they should re read the book ” Turbulence ” about Boeing and its workers

  3. Turbulence, the book never mentioned Boeing, or its employees. When I read the book, back in the late 1990s, i thought it was about MDD.

    • kc135 topboom ?? ” When I read the book, back in the late 1990s, i thought it was about MDD.’

      You must have a first class Time machine !

      Turbulence “Boeing and the State of American Workers and Managers ” was copyrighted in 2010 by Yale Univeristy

      Interviews were conducted at Boeing in 1998- 1999 and 2002-2003.

      Authors were Greenburg grunberg moore and sikora.

      It was ALL about Boeing- surveys internal to boeing, author interviews, etc

  4. Yes, because Boeing’s problems are its unions, not its stunningly incompetent management.

    Yes, I’m being sarcastic.

  5. Placing 777X engineering and/or production outside of Everett would be a strategic mistake that Airbus would certainly applaud. Sayonara, Boeing.

    • Why is it ant different than Airbus having the only FAL for the A-330, A-350, and A-380 in France, and not share the final assembly with Germany? Germany only gets to do the ‘cosmetic work’. Yet, Germany owns as much of Airbus as France does.

      • The FAL part of engineering and manufacture is small.
        That is why Airbus can set up an FAL in China ( or the US) with success.

        Compare with Boeings design bureau in Moscow, a rather unpleasant experience
        caused by not minding the gap ( i.e. Boeing unwilling/unable to handle the cultural differences )

  6. I am not exactly sure how the distribution of AB work is handled, but I think it’s pretty fair otherwise Germany wouldn’t be too happy investing money into Airbus? Germany being the most successful industrial country in Europe can put tits money and know how into anything.

    • Germany isn’t very happy with Airbus right now and is witholding money for the A350 until they get more work (as they claim was promised). Airbus is threatening to reduce the amount of work given to Germany. Look for some fireworks in the future. I think there will be a big blowup between France and Germany over this in the next few years.

  7. All the institutional knowledge of 777 is in the Seattle area, mostly in Everett. So let’s destroy all that expertise by letting the Everett engineers retire or lay them off.

    Instead, hire a bunch of newbee engineers from all over the place, and send them to Charleston. Plop them down at a CAD-CAM terminal:

    “OK guys and gals, the coffee break is over. Now go design a new wing for the 777. By the way, don’t compare your salary and benefits to those no-good SPEEA bums back in Seattle. Most of all, don’t talk to that evil SPEEA organizer waiting to meet you after work”

    A still small voice pipes up from the back row
    “Excuse me, what’s a 777?”
    “It’s an airplane.”
    “Oh. What’s an airplane?”

    Wow, what a great long-term save-a-buck at-any-cost business plan. Sure makes sense to me.

    What Boeing really needs is a big loud voice in Chicago “Excuse me, but are you out of your ever-lovin’ corporate minds?” Not b—-y likely mate.

    Yo, Airbus, bring it! There’s lots of room all around Paine Field, with a lot more to come

  8. … it could well be another of Boeing’s masterful chess game …

    Given how masterful it turned out to be the last time (and still is turning out), maybe it’s time to stop playing games and start to do some serious work? Eh, just kidding. The executives hate unions for ideological reasons and they will not back off as it would be tacit acknowledgement their decision was wrong. They have to continue with outsourcing out of Washington till the bitter end regardless of actual costs and benefits just to maintain the appearance of having a winning plan.

  9. “Why is it ant different than Airbus having the only FAL for the A-330, A-350, and A-380 in France, and not share the final assembly with Germany? Germany only gets to do the ‘cosmetic work’. ”

    Cosmetic work ?!

    http://footage.framepool.com/en/bin/2585804,Airbus_A380,Production_Hall,Finkenwerder,Germany/
    http://www.airnewstimes.co.uk/first-a350-xwb-aft-fuselage-built-14122-news.html
    http://www.airbus.com/fileadmin/media_gallery/photogallery/big/800x600_1317372910_A350_forward_fuselage.jpg

  10. Mike B said … I would be surprised to ….
    ” Riiight – I’m shocked, shocked, to hear about gambling at ricks “….

    Depends on if you refer to 1) SPEEA ‘ intimidating’ the company,
    2) or intimidating the members
    3) or the SPEEA Staff intimidating the SPEEA officers or members for asking embarrasing questions such as about finances or pay scales.

    AFIK, re 2) SPEEA does NOT intimidate workers into being members in any state.
    re 3) Yes that happens and has happened.

    • I was thinking about 2) when I made my comment. Your 1) seems to be commonly referred to as negotiation tactics, employed by all parties in the negotiation.

      I hadn’t really considered 3), having never been a member of a union. I take it you have personal experience with this and probably have a few stories to tell.

      • Yep but this is not the place. However, ,many years ago the then Exec director “glowered” at the non members in wichita who did not want to join the union- and made disparaging comments. The ultimate result of that was a significant portion of the SPEEA population ( Techs ) were decertified with the help of the typical anti – union. Partly for that reason, the Exec director lost his job …

  11. Decision to take advantage of engineers in other Boeing defense facilities is logical vs. nefarious. The upcoming spike in workload driven by “detailed” 777X engineering would be addressed by the following methods;
    1) outsourcing
    2) Seattle hiring binge, then layoff when design details are complete.
    3) Take advantage of surplus aerospace engineers in the defense segment.

    It would be a minimum pain opportunity to swing the upcoming peak in engineering workload to existing, experienced engineering teams at other Boeing location. Those teams are a known quantity, sharing same tools, processes and management visibility.

    Also avoids laying off of a bunch of experienced engineers as the military programs wind down.

    Boeing Seattle headcount is not being reduced. Just the quantity of new jobs being added.

    Also, “detailed engineering” is more akin to commodity work – go implement these design requirements. Seattle retains the configuration, lofting and integration.

    It also appears that Boeing management is not above capitalizing on the perceived location competition aspect to gain leverage all around.

    • you are partilly right IMO … BUT “..It would be a minimum pain opportunity to swing the upcoming peak in engineering workload to existing, experienced engineering teams at other Boeing location. Those teams are a known quantity, sharing same tools, processes and management visibility. ”

      There is a world of difference working to MIL specs and paperwork versus Commercial design parameters. When the Military ( st louis ) people took over the initial early 767 tanker contract(s) as with Italy and later with the fizzled for a variety of reasons, as in the 767 lease-buy fiasco, the mindsets were so different that FUBAR would not begin to describe it. OTOH, when the Commercial types got a chance to run the show on the Navy P8- 737 , the results have been very positive.

      It was a Military type mindset/management that made major screw ups on 787 btw

      It was then military types who virtually blocked for years the addition of winglets to the 737.

      This is not to say they can do some non critical design items the same as any outside contractor as long as they are closely watched by those with commerical experience- and yes it makes some sense if done correctly and helps to provide some stability re sliding defense issues.

      But given the current miss- management in the corner offices in the light years away planet called chicago, and their current/past track record, what is needed will be a near miracle for a dozen or so ‘ to see the l.ight “

  12. SPEEA FAILED IT MEMBERSHIP AND THE MEMBERSHIP FAILED THEMSELVES.
    Since I have been with the company the only time anyone is interested in the union and for that mater the only time the union shows its face is at contract time. Contractors continue to work while SPEEA represented employees get layoff notices.
    During the contract negotiations the union nothing to secure work like 777x! They pounded on the Pension and medical points though important mean nothing if there are no jobs! Right after the contract was signed the company announced reductions in the SPEEA workforce. The SPEEA leadership are a bunch of fools! The best they could do was to tell the company “we’re not respected” Wow those are real fighting words. SPEEA should be decertified! Or at least through everyone in the leadership put on there rear ends!

    • Partially right- the problem with SPEEA has been apathy on the part of members who ” let “tom” do it- for over a decade plus a few others long since gone. The SPEEA structure using an executive director instead of an office manager is also to blame. But the biggest mess was joining AFL-CIO and sending a few hundred thousand a year indirectly to Trumka for non union issues.

      Those few who tried to correct the mess were sandbagged by a few staff- and members paid zip attention. Some of the newbies to leadership seem to be in it for the perks and not willing to pay attention- or let the Exec director overreach.

      still – the damage is done- and yelling for decertification would be of no help.

      Pay attention- IMO- it will be a few months before SPEEA gets the same ‘ offer’ as IAM.

      would you be willing to stand up then ?

  13. Yes Absolutely. Ultimately the companies want to get rid of the unions obviously. Their new tactic is shift work away and offer retirement bonuses on the bet that the older membership will volte yes so they can get their parachute and leave. Not all but a good many. Where the companies are correct though is that unlike many years ago we are in a global economy and I think the unions instead of studying how to adapt to that fact and use it to their advantage resisted that fact for many years.
    At best the Exec Director needs to go! Also as soon as Boeing announced that part of the engineering work was going to Russia, the union should have taken advantage of that immediately, via media an protest that Boeing is shipping work overseas to a country that supports the Syrian Regime and is harboring a Trader. The Boeing design facility in Russia is nothing but a place to pass Boeing design work over to Russian aerospace companies. They also do not really buy anything from Boeing.

    • but boeing buys truckloads of titanium/ ore ( indirectly of course ) from russia, along with other goodies- old rocket engines, etc

      and plays games with H-1B visas for “training ” the russians

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