Boeing to explore options on 777X

Boeing issued this statement late last night on the news the IAM likely won’t approve the contract offer in exchange for Boeing siting the 777X assembly in Everett:

All of our options are still on the table, including those within Boeing and other interest we have received from outside.

We chose to engage in Puget Sound first, but without full acceptance by the union and legislature, we will be left with no choice but to open up the process competitively and pursue other options for locating 777X work. If this is not ratified per the scheduled union vote on November 13th, we will begin taking the next steps.

Our comment: Some IAM members evidently think Boeing is bluffing. This view is fantasy. Boeing will put the 777X elsewhere (Charleston being the obvious choice).

This is an extremely negative turn of events for Puget Sound, for Boeing and the IAM. If the IAM disapproves this contract and Boeing puts the 777X in Charleston (or Texas or anywhere else), we see open warfare between the union and Boeing, with union payback coming in 2016 when the current contract expires. The 2008 57-day strike was payback for prior outsourcing. We can easily see a strike in 2016.

Boeing will continue to move jobs out of Washington State if this deal is rejected. As distasteful as contract provisions are, it seems the IAM membership would rather cut its nose off to spite its face than to save and create jobs. We’ve seen this before. We hope we won’t see this again.

To set a flavor of member sentiment directly from them, see IAM 751′s Facebook page. When we looked last night, there were more than 400 comments, all but a handful negative.

This is a very negative, discouraging turn of events.

Other news:

Some Washington Legislators say that in exchange for tax breaks for the 777X, Boeing must commit to build all 777Xs and derivatives in this state, reports The Seattle Times. This requirement was absent from the 2003 tax breaks Washington granted Boeing for the 787 final assembly line, leaving it open for Boeing to place the 787 Line 2 elsewhere.

South Carolina is ready to step up on 777X, Tweets the Charleston Post and Courier.

It’s perhaps worth reading a couple of our own posts from 2009 when Boeing chose to put 787 Line 2 in Charleston:

46 comments on “Boeing to explore options on 777X

  1. Seems someone at IAM 751 who thinks Boeing is bluffing is stirring the pot. Unions all over the US have a long and proud history of voting themselves out of a job.

    When Boeing announces the B-777X will be built in SC, watch the IAM try to aggressively unionize the Charleston plant, and leave the WA Boeing workers home alone. For the union it will be more about the IAM survival than representing their Washington state members. The union bosses will want to keep all their perks and high paying jobs.

    • You know. It’s not as if Boeing is a failing company. What part of “record profit’s” don’t you understand? Is to much to ask of Boeing to let everyone share in the good times? Take away’s have their places, in times of low or no profit, national emergency, etc. But, take away’s in an extended period of good times, hard to believe anyone would let that happen. This may very well backfire on Boeing. The company will come out looking like it is unable to handle it’s workforce if it is bluffing. If it were so enticing to move this work elsewhere Boeing would do it without all this drama. It’s just a ploy to cut costs and weaken the union, nothing more.

      • The profits Boeing shows today are “time machined” from the 2020..2030 era taken from a timeline where every gamble turns out as planned.

        How big is Boeings ever growing deferred cost “bow wave” today ?
        $40b ? .. $80b ? or even more? ( just the 787 project alone seems to be worth ~$33b )
        You get a more realistic picture when you look at the alternate bookkeeping numbers
        under the “unit cost” tag.

  2. As distasteful as contract provisions are, it seems the IAM membership would rather cut its nose off to spite its face than to save and create jobs. We’ve seen this before. We hope we won’t see this again.

    The same remains valid if you replace “IAM” with “Boeing” here and just rephrase slightly:

    As distasteful as some union statements are, it seems the Boeing management would rather cut its nose off to spite the unions than to save and create jobs and retain their existing pool of skills and know-how. We’ve seen this before. We hope we won’t see this again.

    Funnily enough, this also works with the summary of kc’s post:

    For Boeing it will be more about the management’s survival than valuing their workforce. Boeing’s management bosses will want to keep all their perks and high paying jobs.

    As for Boeing’s proposal: It really is distasteful and their actions so far seem primarily geared at finding an excuse to build the 777X elsewhere (because they believe they can easily substitute the skills from WA, and because management would rather not have to put up with workers rights representatives that occasionally question their decisions) while putting the blame at the unions’ doorstep.

    • I completely agree with anfromme, I always find it depressing when people regard unions trying to retain decent payment, benefits and support for their workers as blackmail and extortion. Boeing are looking to cut costs by reducing, or at least controlling increases, in pay and benefits in order to maintain share value and dividends, that has a direct and massive impact on the quality of life of thousands of union workers who pay Boeing with their blood and sweat to build those aircraft, all to allow people who make their money from gambling on the hard work of others to maintain their gains.

      Full disclosure, I hold no Boeing stock and am not a union member, KC135 and Leeham, do you perchance hold Boeing stock, the value of which is directly affected by the issues on which you comment here? That would be interesting to hear…

    • Yes, and it makes the most sense to put the work where there is a reason to believe it is actually possible for it to be completed in the time the product is promised in.

  3. ‘Bluffing’ is the wrong word.
    It is fact that moving the 777X out of Washington would add tremenduous risk that a Boeing management concerned about the long-term future would never take.
    What the IAM has to consider of course is that Boeing management may not be interested in long-term prospects at all. The business model of Boeing execs is to grow stock value in the near-term future (convert assets into cash, mortgage the next two decades). This is not to be mixed with the long-term business model of a Boeing worker (stay employed for a decade or two and have a decent pension)
    It’s not that the IAM thinks Boeing is bluffing, they just cannot accept the thought that Boeing management is a bunch of looters and takers who could’t care less about what Boeing is going to look like in ten or twenty years.

    • well put. But the truth is, that is the business climate that we live in. The boards of directors of companies like Boeing have no care about what the company will look like in 20 years, and will fire any executive who is not looking out for the current stock price first. You can’t make any changes if you aren’t in the room, and the boards aren’t letting people in the room who care about the future.
      That all said, the executives at Boeing have a plan ready to use if they need it to move all this work somewhere else, product impacts be damned.
      Lastly, pensions in modern companies are a myth. People are just living too long, there is no earthly way a company can fund those pension obligations for the life of that many employees. These pensions that the union guys are forcing on Boeing are going to end up on the US Taxpayers, and those pensions are going to get a haircut anyway. Better to keep the job, and save for retirement, and count on yourselves than have your pension expectations blown up when Boeing declares bankruptcy, and the bankruptcy court judge pledges 25 cents on the dollar for the pension obligations.

      • Rob D. You make some good points. But, there are other ways to cut costs and also other formula’s for amending pensions. Boeing has always been heavy handed with their unions. Flat taking away pensions and forcing rank and file to pay upwards of $400 a month premiums on healthcare rolled up into one take it or leave it offer does little to calm people. It’s either role over or bite the bullet. The older guys could pass this, but al least they care about the younger workers and what they will be faced with. Enough to stand with the younger guys in withstanding this so called offer. Back in the 20′s and 30′s this type of scheme was used many times. We live fairly well now because of Union work then. Let’s not sell our kids down the river. Our parents didn’t.

  4. The IAM has worked themselves into a frenzy that can only result in their own doom. A far better response to Boeing’s “take it or leave it” position would have been to start some very long and very private meetings to hammer out something that could be sold to the members. But, considering Boeing’s record, can the Machinists be blamed for not trusting their employer? Not when you look at the record of the 2009 move to Charleston.

    According to news archives, Boeing had been in talks with the IAM for “several weeks” before their October 28, 2009 announcement that they were going to build the Charleston factory. However, ground-breaking was only 3 weeks later, on Nov 20, 2009. So in only three weeks, Boeing finalized their deal with South Carolina, purchased the land, met all the environmental impact requirements, selected and paid their architects, obtained construction permits, approved the architects’ final designs, and selected the construction contractors.

    Impossible! That process would have taken months. During the time that Boeing’s Board of Directors was supposedly discussing a new long-term agreement with the IAM, Boeing probably had already spent millions on the South Carolina site and may already have been contractually committed to spend millions more.

    Here we are four years later. Can anyone from Boeing tell us:
    • When in 2009 were all the above-listed steps taken?
    • As of October 28, 2009, what were the financial arrangements between Boeing and South Carolina?
    • When were those arrangements made?
    • How much land had been purchased, and when?
    • When were the construction permits obtained?
    • Who were the designers and builders of the new factory, including the date a contract was signed with each.
    • Which of these business agreements, if any, could have been cancelled at no cost to Boeing?

    A response, if any, will probably be “Boeing does not discuss its private business relationships.”

    In the meantime, let’s hear again why it was the IAM’s fault that Boeing went to South Carolina. There are many indications that Boeing had made substantial and irrevocable financial commitments to go ahead with the Charleston factory weeks if not months before the public announcement of October 28, 2009, no matter what the IAM could or would have offered at that time.

    The intro to the 1930’s radio drama “The Shadow” said “Who knows what evil lurks in the hearts of men? The Shadow knows!” 2013 version would be “ . . . in the hearts of Boeing’s Board”.

  5. Know what, I am torn between being a Boeing fan and a man who respects the rights of PEOPLE, they aren’t robots. Can’t we Europeans give work visa’s and eventual citizenship to the last few smart American engineers in the Northwest? Those guys can join the ones in Britain designing wings, and the rest in Toulouse and Hamburg. The machinists, well, they might move elsewhere, but the engineers we can use. It’s very sickening to see a company threaten it’s workers in every step. Guess what, Boeing used to build the best jets in the world, ALL of them in the Northwest, without QUESTION. Now since the late 90′s, it’s a pathetic shadow of it’s former self. Even SUKHOI can have it’s planes more reliable. Like a lottery, they gave away the plane’s thousands of components to any idiot who would bit, regardless of engineering skills, and now have a plane that’s a lottery in and of itself. Nothing to do with fault tree’s, every time one lifts off it’s a gamble, will it fly or crash? Sad sad sad. The 777x isn’t viable long term anyway, Boeing should finish it’s current models and close shop (mcnerney has already done it). Finish the 737 for a decade, 747 is dead already, finish up the 777 in 7/8 years and finish the tankers and close shop. ‘Branch out’, like Lockheed, into making chairs and voting machines or whatever. Sad this cowboy capitalism.

      • No really, study Boeing’s corporate history and explain me what is trolling? Downhill doesn’t begin to describe it. Now explain Airbus, a mingling of disfunctional small companies, only investing more and more as time goes by, instead of less and less. Look at what Boeing did in the 40′s through 80′s and also the 777. Between 1982 and 1995 just ONE new airplane, while airbus did the 320/330/340 in that time frame. Call me an idiot thanks.

        • Boeing wasn’t standing still during the 1982-1995 time period. They worked on derivatives of their product lines, the B-737CLASSICs, B-737NGs, B-747-400 (and derivatives of it), the B-757-300, B-767-200ER/-300/-300ER/-300ERF/-400ER, the B-777-200IGW, which became the -200ER.
          Airbus had to work on new airplanes as all they had was the A-300 and A-310 back then. Both were getting killed by different versions of the B-767. The A-330/-340 were the same airplane program, a stretched A-300. The A-320 started out as British Aerospace’s JET program before Airbus took it over.

      • You are right Topboom, true. But a derivative isn’t a new aircraft. I find it sad that Boeing did the silly thing instead of long term thinking and did a 737 NG. Instead of that, they could have either launched a new narrowbody in the late 80′s, like the a320 (just the sheer production capacity AND Boeing’s EXCELLENT reputation would have pretty much left the a320 in the margins, let alone Boeing’s ability to do an aircraft that was AT LEAST on par. Otherwise, they could have done it right after the 777, instead of firing half their workforce, we would have had an all new NB in 1998 or something, pretty much doing about 10% better than the a320, and no problems with ground clearance etc, and would have sailed through the late 2020′s, without anything other than a simple re-engine. Now how expensive was that mistake? So why not repeat it again with the 777x. Idiots.

    • In Portugal, this “way of capitalism” would be a crime of damaging management. Jim McNerney should be fired (and put him to a court and arrested for this mismanagement). In fact, we need someone to be able to stop this Union war and someone to do a more tight quality control in airplane materials, and someone to create innovative aircraft (ex: 777X will be redesigned and automatically passed to 797, and use Al-Li plates “á lá CSeries”) and promothing more american jobs in future. So, this will be a plan to save Boeing of collapse, as it’s time or even TAAG (Angola Airlines) will going to change to Airbus, and kill a 38-year old relationship, which started just after it’s independence from Portugal in 1975. Or the Boeing “corpse” would be sold to Bombardier, Embraer or a Chinese or Russian manufacturer, or even Lockheed returns to commercial aviation. Time Will tell.

      • Ok. I understand the point of view, and I also think that Boeing has a very low probability of collapsing, but I made this proposal “only” if they have to.
        Well, in this case, rests only waiting to James McNerney getting 65 to be in “mandatory retirement” age, and then, only time will tell.

  6. One option would be to build a new building in Everett with a faux suburb on the roof as an homage to the old plant 2 and as a also have a planted green roof. Why the new building? Is the wingspan too great for the current buildings.

  7. I see this as excellent news for AirbUS!

    The cost of moving everything out will not be offset by any incentive received, incentives which will be contested by the oponent.
    The 777x may not be in the end the same cash cow as the 777 is. This is really a shame.

  8. Workers rights? Who has a “right” to an infinite defined benefit pension plan today?

    Let the negotiators negotiate. Meanwhile, as a shareholder I would certainly support diversifying manufacturing further as a long term objective in itself. Why stop @ Texas/SC? Why not evaluate producing a substantial model in Japan and China? Airbus is doing the same (oh, by the way, in a right to work state; BA could also look at stealing some of that workforce now by locating 777x nearby!)

    Why not allow a simple contribution toward purchases on the state health exchange also? The days of full pension and functionally zero-cost medical are over, whether both sides realize it or not.

    Yes we can!

    • Or Airbus could build some extra capacity in Puget Sound or nearby — a trained workforce, competent suppliers nearby, government incentives, a good business environment etc. Seems like a good choice to me!

    • You know not much about rights, I’m a jurist on the other hand. It’s breaking up of CURRENT contracts what Boeing is after. That’s like waking up every day and getting a gun put to your hear. All consistency goes out the window. That’s NOT the way to treat your workers. Cutting benefits and hours etc is ONLY acceptable when the company is in TANGIBLE financial danger. Not with stock prices at all time highs and profits too. They want to squeeze the last penny out of it. Why not invest more? Why no 797, why are they md-11ing this magnificent plane?

      • ” … etc is ONLY acceptable when the company is in TANGIBLE financial danger. Not with stock prices at all time highs and profits too.”

        There’s your problem ;-)
        Neither stock prices nor profits are real.
        Stock value is very carefully ( and imho fraudulently) managed and todays profits are an advance taken on overly optimistic future predictions.
        Then, pissing on your workforce invariably boosts stock valuation ( never understood how that works out. Must all be “takers and looters” on the stock market. )

      • I know where the problem is. I’m perplexed why the US government doesn’t interfere with any of this. We would have seen 200 heads roll at the hands of Merkel and Sarkozy and now Hollande if Airbus was to re-re-re-re-engine and rewing it’s old models, or if they fire thousands of engineers when having record orders and profits. I’m not TOO much in favor of government intrusion, but in such a strategic and long term sector? Color me a socialist!

  9. I do not see anything wrong in Boeing asking their Union to get into a defined contribtuion scheme in place of defined benefit existing- .I am not an interested party as a B shareholder. Those times of defined benefits are over. The workers I think are well paid by any standards and in terurn get the 777X program for the next two decades. You can bash Boeing management on many other issues , not in my view on this one.

    • Yes, the pension business should not be intertwined with the company. Recipe for hurt feelings. Low risk indexed pension funds should be available to all U.S. workers. I think John Bogle knows what he is talking about concerning the answer to pension and retirement stability.

      • I agree that retirement funds should not be tied to the company, but feel it is illogical to say that the remedy to that problem is to reduce the retirement risk pool down to the individual, rather than expand it up to the state.

        Populations, unlike individuals, are governed by averages which makes it possible to at least know within some degree of certainty how much money will be required to provide them a particular income from a particular age. An individual has no idea how long they will live in retirement, and so it is impossible (barring their having an income totally beyond their working years’ needs) for them to know how much they need to save to provide for a sufficient retirement. Forced to guess, most guess too low.

        Individuals are, as a rule, terrible at playing the markets (this might partially be addressed by low risk index funds as you suggest, but the market distorting effect of directing all retirement funds into such funds seem to me likely to have unintended consequences for equity markets), and have to choose between passive low-risk management strategies where their gains are eroded by fees, and active strategies where they on the whole function as a very lucrative flow of suckers in a rigged casino that is good at nothing so much as taking money from small players and piling it upon the big ones who happen also to own the house.

        Pundits tend to look at these issues, and say well we live longer today, so people will just need to work longer. That might be a viable answer for some, but the labor marketplace can be very unfriendly for people even below today’s retirement age. Experience a major career displacement after, let’s say 55, and someone today may find that they are effectively retired whether they want to be or not far earlier than they ever intended.

        Finally, unemployment happens. Careers are interrupted, changed, and require expensive periods of education to get re-started. Employer contributions are tied to long vesting periods, greatly limiting employee mobility that would be critical to the labor markets functioning as a market at all. At every opportunity of market distress, employers operating without the constraints of collective bargaining opt to discontinue or greatly reduce retirement contributions, and unsurprisingly find themselves in no hurry to resume the expense. All of this means that the real percentage of income that one needs to contribute to retirement in good time is probably substantially higher than it would be if one were assured of full employment throughout their working years.

        Any of these factors alone would make individual management of personal retirement funds a policy with a high rate of failure. Taken together, they are the recipe for a looming retirement crisis.

        So, by all means disconnect long term retirement funding from companies, but lets not pretend that saying retirement is solely the responsibility of the individual is any kind of retirement system at all.

      • Matt B, good points. I agree that individual responsibility for retirement is not stable. Some greater pool is needed. I hadn’t thought about the pension insurance component where funds from people who die early are used to support longer livers. While I see how using a portion of a person’s pension fund for this would be fine, hopefully another portion would be a secure part of their estate for those who die early.

        • We already have such a system in the US. It is called Social Security, and the US Government management of it has been a dismal failure since President Johnson robbed the system to help pay for the Vietnam War and President Carter gave it away free to new immigrants who never paid a dime into the system..

    • The most paternal of the big, old-time companies, IBM, went to defined contribution years ago. And, recently, the medical plan was totally gutted. Union demands for perpetual continuity of benefits won’t carry the day, long term.

  10. Pingback: Boeing Threatens to Build 777X Outside Washington State : One Caribbean Radio | The Global Mix

  11. Being seems hot to get that contract signed before the Dubai Airshow where we may come to find out if the 777x can be successful, or not. So far, Boeing doesn’t have a single firm order for the 777x (I read that Lufthansa is not firmed ordered yet) and yet Boeing wants the Union to give everything away for the promise of a 777x future. And…the question still remains: Will there even be a 777x? And if there is a 777x Program, what real changes have been made in Boeing Management that will keep it from becoming as financially successful as the 787? (massive sarcasm)

    Seriously….somebody please tell me why a company like today’s Boeing can be expected to ever design and build a 777x and make money doing it when thy are doing such a wonderful job with the 787. I mean, if it had been said two years ago that the 787 financial break-even analyses of the time were wildly optimistic, would you have believed it? Two years later, and Boeing is now admitting to Deferred Production Costs (DPC) of $25 Billion. And what’s going to stop the DPC from getting bigger…a lot bigger? The Learning Curve? Squeezing the Suppliers? Lean Production? The awesomely-efficient Charleston Plant ? The return of Alan Mulally from exile? The resurrection and second-coming of Bill Boeing!?

    Point is this: Why should the unions take ongoing cuts when it won’t make any difference?

  12. None of this should come as a surprise to anyone who has watched McNerney. From day one he has stated he wants to remembered as the guy who wrestled control away from the unions, i.e. “bust the unions”. The 2008 labor negotiation with the IAM were carefully orchestrated to ensure there would be a strike to hide the fact BCA had supply chain problems that would otherwise halt production. The IAM took the bait and emerged a much weaker entity. Now, Boeing is in a can’t lose position. IF the IAM votes “yes”, it’s essentially busted, if it votes “no”, it’s unlikely to recover.

    Boeing is willing to spare no expense to ensure the unions are busted, or at least rendered toothless.

    Regarding the union’s position on “total compensation”, the is still stuck in the “value based” paradigm. US business has long since moved on to the “market based” paradigm, as this will, by definition, drive down worker compensation and drive up executive compensation. That appears to be irreversible.

    Glad I’m retired, but I really worry about my grandkids.

    • “Now, Boeing is in a can’t lose position.”

      True, going from their (managements) objectives.
      Only problem these objectives are also instrumental in B’s loss of market share.

      One core issue imho is that fundamental values are endangered making sane negotiations nigh impossible. ( Then there is the trend to style every decission as a “live or die” issue on both sides)
      In Europe unegotiable workplace fundamentals ( healthcare, pensions, .. ) take a lot of hysterics out of management {—} workforce interaction.

      • What? In Europe the labor issues are very different. In the US unions have an option, negotiate, offer, counter offer, negotiate, accept. The US has changed and non union states are waiting in the wings for all the deals the unions say no. It used to be that southern states had no ability to counter offer union power. Today, corporations have more options and the Europe you speak of was the principal cause of that happening. Ask BMW, Mercedes, and now Airbus why they showed up in the Southern US. Because a new laborforce exists and it ain’t in the 3rd world. In the developed world the New South is going to win because they have spent hundreds of millions US dollars to prepare their communities to be ready willing and able to make this a corporate welcome environment. IAM can go to South Carolina but the laborforce there will be hard to consider a unionization request. Ask the UAW how well it went for them at the BMW plant. Vote no and stand tall see where it gets you because America ain’t moving offshore it is moving south.

        Uwe- Europe’s manufacturing jobs are going to be coming too!!! The truth is already evident and we are living in the New Normal…… The Southern US!!!!!

  13. Recently the University of Ottawa recalculated the Gatsby Curve – the measure of social mobility between generations – simply put the “wealth divide”. It turns out that three countries (we are only talking here about industrialised western ones) sit squarely at the ‘top’ – the area with the least social and income mobility. They are Italy, the United Kingdom and – surprise – the United States. Of course class distinction has always been associated with Italy and the UK but this confirms that the myth of upward mobility in the US is just that.

    I will not comment on the causes – just that episodes such as this Boeing case confirm the steady erosion of income classes and the insistent increase in those of management and finance.

    Incidentally France, Japan and the three Commonwealth countries sit in the middle, followed ‘down’ by Germany and with the Nordics at the bottom.

  14. I though negotiation were about give and take.?

    This was a take it or leave it offer. And cleverly done at the last minute just before their biggest customers look to commit to the 777x. Brilliant, just birdbrain ( I miss typed that and spell check change it to birdbrain but it looked so good I left it)

    Good luck to out of touch Boeing Chicago with building an entire industry with an ALUMINUM fuselage aircraft and a never done composite wing ( billions in unneeded cost, growing pains and lost customers). Its sort of like doing the Titanic over and over and over again. Icebergs, what icebergs?.

    They have just assured the success of the A350 line. Which would you buy, a paper airplane rife with production uncertainty or a know quantity that is being made now that you know it works?. A working bird in the hand is worth two in the bush for sure.

    So, we now go for short term losses on top of long term losses spewing endless billion out of profits, you have to wonder where the board and shareholders are in all this while the CEO takes the company down the toilet.

  15. I’m really puzzled about some of the comments here. What does the 787 have to do with any of this?? Lets keep this about the 777x and the IAM and the prospect of it being constructed Washington or CHS or Cuba or wherever.

    I understand the tone of the IAM and how they want better concessions but what about Boeing? Who better than Boeing to know what will work and whats costs need to be trimmed and scaled back in order to run the company correctly. Yes, management has had better days with some of the programs that have passed through and some that are still on going. But my point is Boeing doesn’t make money listening to what people think what they should do.

    As an example, kinda, Walmart has low prices. You know this when you shop AND when you decide to work there. If Walmart decided to pay its employees something close to what is acceptable or the industry standard, who do you think is gonna pay for the new raise and employee benefits? The consumer. Boeing knows how much, like Walmart how they work the intricacies of what employees rights benefits and so on. So while Boeing might seem like the big bad wolf, it is still a free enterprise and UNions don’t give a @@ about the worker, only the revenue the worker generates. Let the 777x work be transferred to CHS, the attention shift will be to CHS, not the workers at Washington State who are now jobless.

  16. Let’s look at the auto industry for a moment. The (used to be) big 3 were all based in SE Michigan, then diversified into many states, but basically all have UAW contracts. The transplants, say Honda, appear to have equal or better quality, and have efficiencies the Big 3 only wish for. Have the transplants gone into Michigan and the Rust Belt for their new plants or more like Tenn, Kentucky, Georgia, and NC / SC. They were scoffed at that a farmer in TN couldn’t build quality. Why can’t the UAW successfully unionize the transplants, because the company basically pays the same as the contract would, but makes it up with easier work rules.

    Even the Federal Government has switched to defined contribution (FERS around 1986 for those hired) and there are huge risks for a company to commit to defined benefit plans. They may be killing the company down the road with the burden of these costs (the big 3 were paying 2K of benefits on each car to people that no longer worked for them).

    Boeing may feel it is time to make that decision.

    • Transplants or complete new setups ?
      Doesn’t the difference depend more on management and how they interact with the workforce than on location?
      ( Chrysler’s PT Cruiser, one of the few cars with a presence in Germany sporting US design and manufacture was known as a 24/7 lemon.)
      Japanese and European manufacturers all set up shop far away from
      areas with established management {–} union relations going for a “sane” environment.
      No idea what emotions US workers attach to their “European ( or Japanese ) Overlords”
      and in comparison to the regular “Local Overlords” ;-)

  17. Pingback: IAM 751 Local rejects Boeing contract, say many members; still awaiting word | Leeham News and Comment

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