IAM 751, in dramatic reversal, accepts Boeing 777X contract

The members of the International Association of Machinists District 751, in a dramatic reversal of its November 13 landslide contract rejection, today approved a revised contract offer from Boeing by a vote of 51% to 49%.

Approval means Boeing will produce the new composite wings for the 777X and undertake final assembly of the airplane right here in Puget Sound (Seattle). The 777 Classic is assembled at Boeing’s Everett factory, home to all wide body assembly since it was built specifically for the 747. The 777 Classic’s wings fuselage panels are produced in Japan and shipped to Everett for assembly to the fuselage.

The outcome was in doubt as 751 members began voting at 5am today. Rallies leading up to the vote were largely anti-acceptance. Pro-acceptance rallies were lightly attended.

Sentiment on blogs and in Comment sections of the Seattle papers overwhelmed positive comments. Reports from the field polling places suggested the contract would be rejected.

The vote secures jobs for the IAM members at the expense of ending the defined pension plan in 2016 in favor of a 401(k) approach to retirement benefits. It also extends of Letter of Understanding (#42) providing that 737 MAX and KC-46A tanker production remains in Puget Sound through 2024, to which is when the 2016 contract has now been extended.

The controversial contract may bring mixed feelings to union members, but it brings unfettered job to elected officials, the Puget Sound supply chain and other interested parties who feared Boeing would take all the 777X production elsewhere at the cost of nearly 30,000 direct and indirect jobs and huge hits to the local economy.

But make no mistake: when Boeing proceeds with a new airplane design to replace the 757, followed by one to replace the 737, we’re going to see another round of efforts to browbeat the union and the state into more concessions or give-backs in exchange for production to be located here.

The timeline for decisions for a 757 replacement should begin around 2017. Decisions for a 737 replacement should begin around 2020.

112 comments on “IAM 751, in dramatic reversal, accepts Boeing 777X contract

    • I’m surprised too … I thought it would be a repeat of last November almost.

      But apparently this signals a generational shift among the workers and the threats of moving the work elsewhere did not fall on deaf ears. Probably a mix of both.

      On one hand I think Boeing got exactly what they wanted: a split union. But I think that’s the wrong way to look at it. The way I see it is, the era of pensions is over. Plain and simple. Pensions made sense in one era. Now they don’t. Not when the average life expectancy is out to 83+. If I were a CEO, I wouldn’t want my workers retiring at 60 only to live to 90. That’s 30 years of pension payouts for what is realistically 25 years of productive service. That makes zero sense. It’s also a liability: I remember when Ross Perot wanted to buy Boeing and raid the pension fund. The world would be a lot different today had that happened.

      Anyway I’m stunned that the vote actually came out as a “YES.” Simply stunned. But not in the sad way. You should never let a union dictate the economic health of entire cities. Detroit learned that lesson the hard way.

    • Doubtful. SPEEA already gave up the pension for new hires. During the next contract cycle in 2016 they will ask to freeze the pension or buy them out in exchange for … well, not losing as many jobs, basically. SPEEA is resigned to the fact that they can relocate (and have relocated) hundreds of R&D jobs and some design jobs already.

      • Defined benefit pensions aren’t iron-clad guarantees. Just ask the retirees of Delphi Automotive. They would have been better off with a defined contribution plan. As you say, the Ross Perot’s and Mitt Romney’s of the world are always ready to raid the pension fund to enrich themselves at the expense of the workers.

      • There are several factors re the Freeze game which may make a push on SPEEA to freeze in the near future

        1) With the elimination of IAM- the BCERP will not become as TOP HEAVY as it would have been with the IAM ( more participants getting Higher benefits ).

        That in turn may allow the company to shut it down or close it – with ONLY SPEEA being the big kahunas stopping it. Recently a ‘ modification” to the long standing rules which said in effect “IF the plan is top heavy or unbalanced, you cannot shut it down” – that rule is now waived for about 2 years…

        From my friends at IBM- a MS. Cooper of COOPER V IBM ( major case re Pension Plans )- Posts as justa bean counter which is well known for over a decade- and a good friend going back to late 90’s

        Her post follows – link about ABC ( American benefits council )

        http://finance.groups.yahoo.com/group/ibmpension/message/80547
        Ms Cooper …
        I always thought that the only legal thing keeping IBM from implementing a derisking plan was the problem of running into the antidiscrimination rules. (pot get small for employees while pot gets bigger for execs = a legal no-no)

        Well, I’m no longer certain the antidiscrimination rules are protecting us. ABC (not our friends) has been working diligently against us. Looks like it is working.

  1. Well, I call this significantly better than defeat for Seattle and PS.
    I know it is a bitter pill for a lot of workers. Hopefully Boeing management can be a gracious winner (but that would be turning over a new leaf for them).
    Now if we can all just “bury the hatchets”….
    …and I DON’T mean in each others backs!!

    • Biggest winner is clearly Boeing management. They finessed the offer juusssst enough to get it approved by the thinnest of margins and to split the local and international union leadership. They didn’t spend 1 penny more than they had to to craft an offer that would barely pass. They took a gamble and got lucky.

  2. I’m happy that this is now over. But with a near 50-50 split of the vote and some 9000 who did not vote, for whatever reason, there still could be some friction on the production floor.

    • No there won’t be any friction for more than a day or two tops.

      The problem will be the flight of older, experienced line workers. They are now going to bail out as soon as they can.

      • Short of retiring, where will the older workers go? I have found in my life my age was viewed as a liability, not an asset. On an interview, one of the first questions was how old are you. Now I know its against the law to ask that question, all the interviewer had to do was look at the application.
        Point is that while the contract falls short of what many wanted, the pay checks will continue, medical costs will be covered, and retirement funding builds up.
        The times they are a changing, and we all better get used to the new normal.
        To talk about the good old days and what the wage and benefit situation used to be is pointless, welcome to the real world.

  3. Welcome to the world of total corruption, corporate welfare, and extortion, didn’t we fight wars in foreign countries to free their people of these things? I guess none of that really matters anymore- all praise the almighty dollar your new master.

    • “.. , didn’t we fight wars in foreign countries to free their people of these things?”
      That is what you were told but not why it was done.

      • a few data points re the pension and 401 K – from the secret site on the IAM page found after 30 seconds of search ..

        http://www.iam751.org/pages/t2013/ARTICLE%209%20and%20ARTICLE%2010%20Final%20Nov%204%202013.pdf

        There are several dates involved for newbies- and oldies as to contributions to ?? fund ( same as VIP ) and also when basic rate changes , no mention of alternate calc other than inferred to be under the same rules as BCERP, pus IMO may other ????. A possibility that further definitions should be forthcoming – but a neat loophole that allows BA to change in accordance with ‘ best practice in industry “.

        And thats what 51 percent agreed to for the next decade !!

        hopefully BA will be ethical enough to enter into some sort of meetings to iron a few details with knowledgeable people from or hired by IAM.

        AFTER ALL – everyone at BA signs an ethics pledge . .

        Perhaps the pundits and others will take the time to see IF they would sign such a document- good for 10 years ??

    • This is capitalism at its best. Sacrifice everything and everybody for the shareholder. Its been this way for many years and will continue so.

    • Just to clarify my question Sophie – 10+ years from ‘decision’ to EIS seems an abnormally long time (ie, 2020 – 2030)?

      By contrast, the 757 replacement timeline implies a c.8 lead time (ie. 2017 – 2025).

      • I doubt there will be a 757 replacement as such. The NSA will range in size from 737-800 to 757-300, with the smallest of the current 737 range dropped.

      • Bouncer, you’ve got it. We now have 757RS EIS c2025 and 737RS two years later. We have launch-to-EIS at 7-8 years. 787 planned launch-to-EIS was five years and turned out to be seven. 777X, a derivative, is ~seven years. 737 MAX, a derivative, is six years.

        Roger, Boeing is studying a true 757 replacement (the “New Airplane Study,” or NSA) and a 737 replacement (the New Small Airplane, or NSA). We’ve written about this several times dating to 2012.

      • the 757 replacement seems the optimum size for a radical departure to a BWB configuration. the 220-250 seat single aisle is awful for gate efficiency, passengers and requires extremely tall (and therefore heavy) landing gear. but twin aisle tube and wing is too draggy for the number of passengers..

        a 20F/200Y configuration with 8 wide x 32 pitch econo and 5×60 first class would have a ~100-105 foot long cabin (including toilets and galleys), enabling short and light landing gear while still getting good rotation, the passengers would not be exposed to non-tube and wing like movements during banking as they would still be close to centerline, and with ld3 cargo either side of the passengers, an extremely efficient aero design would be possible, big open rotor turbines up on top between the vert stabs would result in a ridiculously efficient (and quiet) airplane.

        sadly, the odds of Boeing doing anything radical under current management is near zero.

      • So what will happen when Boeing begins the NAS (B-757RS) and NSA (B-737NG/MAX/RS)? Will we again see the battle for FAL(s) only in WA, as we did for the B-737MAX and B-777-8/-9? Boeing will eventually need to expand production outside of WA, perhaps to SC, then TX, AL, and others. At some point the Boeing facilities in and around PS will reach max capacity with the current and near future production of the B-737NG/MAX, P-8, B-747-8, B-767, KC-46, B-77L/F/W/X. Yes, some of these may be out of production and currently have slow sales, or may have slow sales in the future, but that capacity will be replaced by better selling models, thus keeping the PS FALs at or near max capacity. The NAS and NSA hold the promise of being big sellers, based on the current back order books of both Airbus and Boeing. Plus the NAS will have no real competition unless Airbus comes up with a true B-757 replacement before Boeing does.

      • Studying a 757 replacement doesn’t mean they’ll build it though. They may well conclude that a separate frame in this space in the marketplace doesn’t make sense. The 757-300 was probably at the limit of a practical narrowbody, and arguably was intruding into smaller widebody teritory. It would make a lot more sense to replace both the 737 and 757 with a single model skewed towards a larger size range than the current 737.

  4. Mr. Beardon’s views are parochial, narrow, and out-moded. This vote was not just the Local’s business. No sane country would let a few thousand disgruntled workers decide alone the economic fate of millions of citizens and it’s aerospace industry. Our aerospace industry is a national treasure and strategic asset that is vital to our national security, and neither robber baron corporate bosses (think Stonesipher and the 787) nor obdurate workers should be permitted to jeopardize it’s future, free from input and pressure from relevant interested parties.

    Mr. Beardon and the rest of the Local claimed they were fighting to retain gains hard won in the past. But the primary sticking point was defined benefit vs. defined contribution 401(k). What is so horrible about a 401(k)? It has been used by millions to very successfully plan for retirement. Also, what is so bad about a contract that guaranties that the 777X wing will be built in PS area, when the similar 787 wing was built in Japan? This will mean that PS workers will learn a whole new skill set that will make them unique in the world, given the unprecedented size of the wing. I would think that any worker would jump at the chance to gain a skill for which he/she has very few competing workers worldwide .Also, to my knowledge, the Local never disputed B’s claim that the new contract would still be industry- leading. So, many are left to wonder, Why are these workers with great jobs and a real future whining about a pension change that would bring them in line with the current US retirement mainstream?.

    It is clear that the Local refused to grasp the obvious truism that nothing lasts forever and therefore change is necessary. In a nutshell, what has changed is that today we as a nation, including workers, face competition all over the world which did not exist when the current contract and its forebears were entered into, so we have to adapt. The International understood that the Local had lost it’s way, and was therefore justified in stepping in to impose the discipline they deserved.

    Lastly, IMHO this dispute is a microcosm of the larger position we as a nation face. For the first time since WWII we face a world we do not dominate economically, politically, and militarily, and in which there are several powerful national competitors, particularly China, who are potential, dangerous enemies. Our security therefore depends much more on a strong national balance sheet and economy than military might, and on our ability to form alliances, particularly economic ones, to replace the decline of our prior system of military alliances. Doing this will mean that the relationship between capital and labor will have to change, as it just did at B and has done in the automobile industry. How it changes will be a matter for trial and error, but most of all will mean that all of us will have a place at the table, not just the corporations, employers,and workers. This why, Scott, whatever happens re the 757 and other B projects, B will not be browbeating anyone. They and the rest of us will be trying to find the changes we need.

    • Very well said. Could Boeing have learned some things with the 787, also the IAM. The only real win-win is for the 777X to be a big success.

      • Which means a win for the workers who have have plenty of work spanning many years. In less than 4 months, almost 300 orders for the 777X. Widebodies are the real money makers for Boeing.

  5. What we have witnessed is a vote on the past vs. the future and Cub 3 has briefly, but well, summarized some of the major issues that were underlying the conflict.

    I wish there had been more discussion and clarity on the wages that Boeing offers relative to this and comparative industries. Are they truly leading industry and should job security weigh in also as an tangible benefit . Most workers and executives always feel they are being underpaid ..but some clarity about IAM wage rates would have been helpful.

    Also, Labor has little sympathy for the large Corporate salaries at Boeing, but here too there is a comparative scale for management and Executive pay….competition exists at all levels for talented people .

    If Boeing was compared to other Industrial corporations, would the ranges of Labor Management compensation be similar or disproportionate.

    Finally, I do believe that Boeing Labor has been terrific over the past few tumultuous year and hope that this compromise can lead to the benefits that they rightly deserve. A decade of steady work with recognition for increased skills looks very attractive.

    It would be best for everyone, if the gauntlet of antagonism can be reversed and a new period of cooperation could be initiated so that the Company remains competitive and the Labor force feels appreciated

  6. I think/ hope Boeing will take action to restore loyalty on the floor. I think they recognize it is damaged, they weren’t on the sideline there, and they need the hearts of their workers, not their clocked hours.

    On 737/757 replacement, looking at orders, who placed them, and likely margins, the 737 is toast IMO. The A321 is rapidly overtaking 737-900/9i/757/762 markets. Also US markets.

    IMO Boeing needs an NSA first though, they can’t sell 737s on availability, price and commonality forever. If they will dimension it for 240 seats/4000NM too, it will be ignored as heavy for the huge 150-175 seats market up to 1500 NM. The times of one airframe fits all are over.

    So IMO a very light 150-200 seater NSA , optimized for flights up to 1500NM, able to incorporate openrotor sized engines later on (probably high wing).

    • The 737-8 and 737-9 still have a compelling edge on floor space versus the A320n. The A321n does seem to be opening new market potential, like with Hawaiian, plus, American and Delta ordered some. I think the 757 replacement is still first priority.

      • And Jetblue, Spirit, US already has 100 A321s already. The new AA has 300 A321s in service / on order and many further options. Maybe Boeing missed out already on the transcon market. Delta ordered A321s despite large 737-900 orders / fleet and preference for used aircraft. http://youtu.be/aAVy4Hj2nx4

        I see the market for 200-260 seat medium haul at about 2000-2500 in the next 20 years. Transcon,Intra Asia (China!), North America Caribbean, Europe Leisure, EMEA, high frequency city pairs Western Europe, US Eastcoast, Australia, Canada, etc etc. replacing 738s, 739s, A321, 757s, 767s, A300, A310, Tu154s, miss used A330s, 787s etc.

        This just ain’t about replacing a few transatlantic 757s. Maybe it takes a United Airlines 100x A321 Pratt GTF order (despite their MAX order) to wake up their Chicago neighbors?

  7. The post re changing the rules is below

    Well, I’m no longer certain the antidiscrimination rules are protecting us. ABC (not our friends) has been working diligently against us. Looks like it is working.

    http://www.pionline.com/article/20131213/ONLINE/131219916/irs-issues-testing-relief-for-closed-db-plans#

    IRS issues testing relief for closed DB plans, By Hazel BradfordÂ

    Corporations that sponsor defined benefit plans closed to new employees got some good news Friday from the Internal Revenue Service, which granted relief from non-discrimination testing rules through 2015.
    Defined benefit plan advocates wanted the IRS to allow plans to be considered in compliance if they were at the time of closing. The IRS agreed to the change, but only for 2014 and 2015, and only if benefits were not enhanced for some people but not others. The IRS left the door open for tighter rules in later years by asking for comments on possible new ones.

    Washington lobbyists had hoped to get permanent relief from the rules, which were written to apply to ongoing plans. Closed plans came closer to violating the IRS non-discrimination rules as participants’ income grew, and some sponsors were freezing their plans as a precaution, to avoid running afoul of the rules.

    “We applaud the Treasury and IRS for getting this out quickly and addressing in a very effective way our concerns,” said Kent Mason, an attorney at law firm Davis Harman, who is outside counsel for the American Benefits Council. “We have a number of questions about the approaches they’ve raised” for the future rules.

    +++

    I’m sure BA is WELL aware. .

  8. Reading the stories in the Seattle Times, it seems the older workers, who will be least affected by the pension freeze, were the one’s most opposed to the contract.

    They will get most of their pension when they retire. Yet they were willing to vote NO, and leave the younger workers to suffer the consequences of production moving out of Washington. I guess they think it is better to have no job at all, than to have one with a defined contribution pension.

  9. Uh oH – re my earlier comments on vote and let the courts begin

    From WSJ

    Wilson Ferguson, president of a local union lodge and one of the leaders opposing the contract, said the offer was approved by a margin of “around 600″ votes out of 23,900 cast. Mr. Ferguson said he has asked for a recount of the vote, but claims the request was rebuffed by international leaders of the union. He added that turnout was lower than for a Nov. 13 vote that resulted in an earlier version of the contract being overwhelmingly rejected.

    A spokesman for the international union could not immediately be reached for comment

    http://online.wsj.com/news/articles/SB10001424052702304325004579299610258941436?mod=WSJ_hp_LEFTWhatsNewsCollection

    SEATTLE— Boeing Co. BA +0.70% ‘s largest union voted to accept a new contract that will keep the aerospace giant heavily unionized for years to come and avoid a risky move to expand jetliner manufacturing further outside its base in Washington state.

    The vote, finalized late Friday, ends months of bitter contention over the eight-year deal, which takes effect in 2016, and will provide the union a predictable slate of work in Puget Sound while giving Boeing labor peace well into the next decade.

    The 51-to-49 ratification of the contract ends a nationwide search by Boeing for a new manufacturing home for the planned 777X, a 350- to 400-seat jetliner scheduled for delivery in 2020, and its carbonfiber composite wings. Twenty-two states had offered 54 sites for Boeing to evaluate, each hoping to win potentially thousands of high-value aerospace jobs.

    With the approval of the union, the chief executive of Boeing’s commercial unit, Ray Conner, confirmed that the 777X and its wings would be built in Washington state.

    “The future of Boeing in the Puget Sound region has never looked brighter,” Mr. Conner said. “This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

    The contract, which met fierce opposition from local leaders, was accepted by the union.

    “Our members have spoken…this is the course we will take,” said Jim Bearden, administrative assistant to International Association of Machinists and Aerospace Workers local district president Tom Wroblewski, who was simultaneously informing the members of the close result.

    International leaders of the union praised the agreement with Boeing. They had not explicitly endorsed the contract but appeared to be at sharp odds with the local leadership who advocated rejecting it.

    goes on . .

  10. Um – this talk of a new relationship between management and workers seems dangerously close to that articulated with far less grace in the late 19th Century. But it is none of my business – if the consensus is that in America ‘pensions are no longer needed because we live longer’, well the best of luck. Fortunately the rest of the industrialised world, with the notable exception of the ineffably ungoverned United Kingdom, is not following the same pattern – rather recognising that with longer lives more protection, both financial and social, is needed.

    And I do understand that in the United States today, where companies are granted the same rights as citizens when it comes to financing campaigns and where the difference between the few and the many has reached unmatched levels, that support for and admiration of the tactics of the senior management in Boeing is the norm.

    • “unaffordable”
      Without these funds having been plundered by the trustee the situation would already look different. ( I am still flabbergasted that this betrayal is met with such meek protest )

      How do you propose to fix this life segmentation problem ( i.e. grow up, learn a trade, work in that trade (maybe more than once) , grow old, die )

      • The new pension plan can provide a decent retirement. I played with some numbers using this calculator:
        http://dinkytown.net/java/Retire401k.html

        First I took a Boeing pension contribution rate of 4% for someone earning $85K/year, and assumed a 3% pay raise per year. I assumed a 7% return on investments. If somebody worked from age 30 to 65 they would have about $693K at age 65.

        Then I took the 401(k) program and assumed a worker contributing the full 6% and Boeing matching it. Assuming a 7% return that will grown to about $2 million at age 65, So the employee could retire with $2.7 million dollars. Taking 4 percent of that a year would give the employee nearly $9000/month plus their Social Security.

        This type of plan shifts the risk to the worker. There is investment risk, inflation risk, and longevity risk. Although the worker could mitigate the longevity risk by annuitizing a portion of their nest egg and purchasing an inflation rider.

        • Uhh TOM ?? i assume you are not a Boeing employee, nor do you understand the Boeing Plan at Issue

          Nor the real annual ‘ raise’ situation NOR the Boeing existing VIP.

          yes I’ve looked at that calculator – and it is fair – but your assumptions are way off base re BCERP

          Stick a few numbers in my spreadsheet made to mimic the BCERP with estimates form 2016 to 2024 re standard benefit- Alternate benefit has not changed since early 90’s

          Look at the delta between 2016 and 2024. Spfreadsheet is interactive. That typical 1200 to 1500/month needs be made up from the 4o1K plan (IAM ) which starts in 2016? and try what happens with someone less than about 20 years.

          Lets not forget most will not draw SS until 66 67 or later age

          And at 70 1/2 required RMD of 2 to 4 percent increasing each year

          and average returns of ??? 3 to 5 percent ??

          This spreadsheet can be downloaded and used to compare the Freeze date versus continued to 2016. Inputs are estimated
          percent increase for alternate benefit, and 5 year average as of march 2012 and credited service as of march 2012.
          Age can be input but does not enter into calculation Your union should have provided this.

          NOTE : Goggle docs does not allow for some reason a view of my excel files. BUT they can be downloaded. Two ways
          Browser says ‘ try again later ” Look on upper left with down arrow- hover says download current version – click on it
          Browser says cannot view — upper left under FILE – down arrow

          http://tinyurl.com/BCERPPENSIONCOMPARE

          AN EXAMPLE OF A GOTCHA IN BCERP RE ALTERNATE FORMULA AND COVERED COMPENSATION AND BONUS
          GOES BACK TO EARLY 90’S AND HAS NEVER BEEN CORRECTED
          http://tinyurl.com/SISTERSALLYRETIRES
          THE STORY OF JOELUNCHPAIL WAS DONE IN 2008. IT STILL APPLIES
          http://tinyurl.com/JOELUNCHPAIL2
          DOL ON 401K ISSUES
          http://www.dol.gov/ebsa/publications/401k_employee.html

          13) BOEING CASE STILL IN COURT RE EXCESSIVE FEES

          http://tinyurl.com/SPANO401KBA

          And whatever else will help on

          https://sites.google.com/site/baunionhelp/home

      • Don,
        Your comments are so full of typos and grammatical errors that it’s impossible to follow what you are trying to say. Sorry, I don’t fell like trying to untangle them.

        OK, I get it. You don’t like the new contract. I think I would have voted for it if I had been in a position to do so. Let’s leave it at that.

        • re typos ??

          HMMM- AS IN Tom Bucceri
          January 4, 2014 @ 2:40 pm

          What doe they use?
          ++

          Sorry if FACTS and DATA are a bit much for you

          Enjoy the weekend

      • Tom, IMHO your outlook mimicks Boeing presentations in being exessively selective to the positive.
        Traditionally you start with low wages that rise with seniority.
        Your employment probably will not be continuous.
        You’ll never make 7% from a reasonably crash proof investment. ( You will probably have difficulty making even half of that.) Lastly what about inflation?

      • Tom, IMHO your outlook mimicks Boeing presentations in being exessively selective to the positive.
        Traditionally you start with low wages that rise with seniority.
        Your employment probably will not be continuous.
        You’ll never make 7% from a reasonably crash proof investment. ( You will probably have difficulty making even half of that.) Lastly what about inflation?

        Uwe, I tried to present a realistic scenario of what a worker could achieve with under the new system, if they were saving 6% of their salary and Boeing was contributing 10%

        You’re right. A new worker will not start out at $85K. But on the other hand, they will likely be making much more than that 35 years from now.

        You say you never make 7% on investments. You obviously don’t know much about investing. How do you think traditional pension plans work? They take the contributions and invest them, hoping to make a big enough return to fund benefits. Those returns are usually more than 7%, otherwise the pension fund would become insolvent.

        Seven percent is a realistic return for a balanced portfolio of stocks and bonds.
        https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

        As I said earlier a 401 plan shifts the risk from the company to the worker, and that includes the risk of inflation. Traditional pension plans are even more exposed to inflation risk, if the benefit is fixed, and doesn’t include cost of living adjustments.

        I’m not knocking traditional pension plans. However, not all traditional pension plans are created equal. Some are better than others. And when a company goes bankrupt, workers may be better off with 401 type plan. If your employment is not continuous and you are moving from job to job, a 401 type plan is better, because you take it with you.

    • I suggest that those who think the 401K is a better deal for everyone take the time to read Ellen Schultz ” retirement heist ”

      While it CAN BE a good deal for the younger in that it is portable – it really depends on the choices one gets in the company 401 K – combined with IRS regs – AND A LUCKY OR BETTER than average returns.

      There is IMO no doubt the company will ‘ majke ” bucu bucks from the freeze – see Joe lunchpail

      HE STORY OF JOELUNCHPAIL WAS DONE IN 2008. IT STILL APPLIES
      http://tinyurl.com/JOELUNCHPAIL2

      But it is a bit unclear why BA did not offer the hybrid pension value plan- which devolves into a 401k style over time ..

      MY SUGGESTED PENSION CHOICE IF MELDED WITH BCERP BY SUBJECT MATTER EXPERTS- NOT UNION BRASS

      http://tinyurl.com/APENSIONCHOICE

      read the company response in the above to my shareholder proposal in 2004 re Choice.

      Far from being usustainable as many claim, then Boeing plan had extraq funds in many years. While it is true that being backloaded resulted in ‘ aluminum handcuffs” it had advantages since 1972-73 under ERISA that made it ‘ dependable” income even without a cola.

      The story is NOT yet over- and I have no doubt SPEEA is next – within the year or a few months.

      But for both the IAM and SPEEA – they need to get OUTSIDE SME involved to keep from getting rolled on thye new 401k equivalent or whatever

      For example – use a company like vanguard with low to minimum fees- instead of ING, etc.

      • While it CAN BE a good deal for the younger in that it is portable – it really depends on the choices one gets in the company 401 K – combined with IRS regs – AND A LUCKY OR BETTER than average returns.
        It also depends on the formula used in determining the defined benefit pension.

    • .. Yes. The expense ratio on the Vanguard Total Stock Market Fund (VTSAX) is 0.05%. This is 95% lower than the average expense ratio of funds with similar holdings..

      But AGAIN – BA VIP Plan currently does NOT use or allow VANGUARD !!


        • What doe they use?

          The current BA VIP/401k plan uses ING ( they bought out State Street) proprietary funds.
          CURRENT SAVINGS PLAN – WILL THIS BE THE SAME PLAN PROPOSED TO REPLACE BCERP FOR IAM
          http://www.boeing.com/boeing/companyoffices/empinfo/benefits/spds.page

          BOEING CASE STILL IN COURT RE EXCESSIVE FEES
          http://tinyurl.com/SPANO401KBA

          Regarding the BA 401K claims that ‘ you control “- Its as usual only partly true

Here is why

1) VIP/401k currently uses only ING- limited choices and generally higher rates than fidelity or vanguard

2) You will get access to planning, etc. Well, sort of. You will be charged a 50 cent/month fee for access to a computer program suggesting how to allocate your $$. but of course only with ING funds. And if you are within a year of retirement or retired, the program doesn’t work. YOu pay the 50 cent fee, use it or not. 

You also get access to a ING financial planner of sorts – cost a percentage of your total $$- reasonable rates. But if you had the same amount of $$ say over 100K, depending, and were outside the Boeing plan, you could do as well or better and have more choices

3) This fee structure was offered to the IAM several years ago – and wisely, they declined. Not so for SPEEA. 

4) And don’t be surprised if Boeing then decides to apply those fees to ALL IAM current members, retirees, etc who were ever in the bargaining unit from day one and who still may have funds in the Boeing system ( yep thats retroactive OK- and really a no no ) For those who say BA cannot do that – I have news for you- they can and did !!

http://www.boeing.com/assets/pdf/companyoffices/empinfo/benefits/savings/spd/spd_76.pdf



        • Really tom ? Please oh please check the news and other posts before such comments. The LOCAL UNION had NO choice – NO real negotiations – and was against the whole deal from the get go. It was the International behind the whole mess

          Why not go to http://www.iam751.org/
          and read up on the whole mess first ?

          Thank you

      • This is an emotionally charged issue, but I remind Readers to observe the Reader Comment Rules against personal attacks, cracks about grammar and spelling and personal attacks.

        Among others, this means you, Tom Bucceri.

        Everyone: Knock off the violations or I will close comments.

        Hamilton

  11. At the end of the day, this move was about the pension plan which was going to start costing Boeing a lot of money in the next decade or so.

    We’ve seen how many cities, states, municipalities, etc. have been hit with funding the pension plan and Boeing was being proactive on this part.

    I don’t understand why so many people have a problem with Boeing (and other companies, cities.etc.) moving towards a 401k-stye retirement program?

    Tens of millions of people are not in it and it has proven to be quite successful.

    • ..”I don’t understand why so many people have a problem with Boeing (and other companies, cities.etc.) moving towards a 401k-stye retirement program?

      The difference between public and private DB plans is enormous- publIc have COLA- private do not

      If 401k plans are so wunnerful – one could assume that then FEDS and POLS and the rest would be jumping up and down and converting just like Boeing…

      Why not ?

      try reading animal farm – SOME ARE more EQUAL than others . .

      • Donl. The Federal Government’s generous pension plans have always been a big incentive for employment and an attractive draw to work in the Government ..

        Yes, some plans are more equal than others. That is just the reality of the competitive American private workplace. 401-k style retirement plans have been offered to provide other benefits such as controlling your pension and moving it to other jobs if you so wish.

        The increase in life expectancy , as you know, has created long term liabilities for Company pension plans that have crippled the economic health of many companies making it unfeasible to provide this coverage. Of course the FEDS and POLS are not converting but they are probably making less compensation ( legally) than their counterparts in private industry. These are all part of employment tradeoffs.

        Boeing’s plan only affects new workers….all other employees are covered as they have been in the past. The high moral ground that is claimed for “future generations” is really disingenuous. The responsibility of the Unions is to protect their existing members. Those who choose to accept a job and join the Union do so on their own accord.

        You are really arguing for more income equality between Labor and Management. I understand that desire but our Capitalistic system is a competitive one ( for better or worse) and inequalities are or can be provided by the same Government through legislation or Judicial review.

        I know you know this .

      • BA Investor
        Boeing’s plan only affects new workers….all other employees are covered as they have been in the past.

        That’s not my understanding. The new contract “freezes” the defined benefit pension plan in 2016. So whatever you have accrued up to that point, will be paid, but going forward, all new contributions will go into the new defined contribution plan.

      • 10 year job security is included (B737 line to 2024).

        As I’ve mentioned previously, millions upon millions are going 401-k style. Also, many companies (including Boeing) allow how aggressive/non-aggressive one wants to be.

        As I’ve also mentioned as well, the old pension plans are completely obsolete and unsustainable.

        What’s there to not understand?

        • UHH JACOBIN….As I’ve also mentioned as well, the old pension plans are completely obsolete and unsustainable.

          ++
          I dont think you are responding to me ??

          But suggest you read Ellen Schultz Retirement Heist

          and also note that DB plans dropped over the last decade by about 1500 from 46 plus thousand to 45 thousand according to WSJ a few weeks ago

          and please don not mix public plans with COLA with private plans

          DB plans are alive and well in the executive suite

          And in Gov agencies ( using OPM)

          And they are often profitable due to surplus in the plans being pencil whipped under the rules into operating earnings.

          FUNDING STATUS OF BCERP AND OTHER PLANS
          http://active.boeing.com/companyoffices/empinfo/benefits/news/pension_fund_2012.pdf

          MY SUGGESTED PENSION CHOICE IF MELDED WITH BCERP BY SUBJECT MATTER EXPERTS- NOT UNION BRASS

          http://tinyurl.com/APENSIONCHOICE

          and read both my proposal and the BA BOD answer.

  12. There will be no direct 757 replacement.

    The market for it is gone. The 737 and the A320 now occupy at least the bottom 85% of what slot the 757 served.

    What is left is some of the upper range capability and the 757-300 size.

    When the 737 is finally replaced in 2030, they will simply move upsize and take over the 757 and drop the lower end of the single aisle lines (which will be better served by optimized aircraft not a single aisle that can fly to Hawaii.

    The only real current demand was FedEx converting 200s to freighter (and they could have done the same thing with 737s or A320s, it just worked out better for 757s and they were available) FedEx is not going to pay new prices for that class aircraft. UPS will convert 200s if they need more.

    The other users have like Delta found that paid for equipment is pretty competitive to the marginal fuel improvement over current aircraft (the first time you save 20% it is a big number, after that the percentage sounds impressive but is the same percentage from a smaller base

    For all the fooderah on the 757 (and I like it and I think it should have been upgraded) it’s now a passing era like the 747. There may be 200 actual routes and operations that you can’t do with anything else. Those routes are thin profit routes. As the LEAP and GTF improve on the engine performance that segment that is not served by the new generation single aisles will keep dropping.

    Boeing is not going to build an all new aircraft just for that small market, there is no return. It will continue to be served by whatever you can manage be it from the bottom with a Single Aisle or the top with a 787-8 or 767 (only if it pays). Basically any comments by Boeing it will is Corporate lip service

    If you look at the price different, call it $55 million for a single aisle and the $150 million for a 787 you can see that the economic viability of a marginal route for single aisle simply is not served by an aircraft designed to fly 7,000 miles.

  13. “I don’t understand why so many people have a problem with Boeing (and other companies, cities.etc.) moving towards a 401k-stye retirement program?”

    Don’t know. Corporate greed, opportunism, self enrichment and disrespect?

    • How about long term planning, awareness of costly liabilities , recognition of effects on Cities, Municipalities and other Companies, desire to keep the enterprise competitive and growing………….I do not believe there is any disrespect or excessive corporate greed,,,those are trite accusations that mask more complex and serious choices facing many American Companies..Boeing has not “exploited” its workforce.

      Has there been any Union Greed, opportunism, self enrichment and disrespect ?

  14. Interesting re the Pension issue. An alternate to BCERP, the pension plan under discussion has since 1999 been the PVP ( cash balance type plan ). And As Iv’e mentioned and posted ( ad nasauem ) in 2001-thru 2004 I pushed via shareholder proposal a ” free choice ” for employees.

    MY SUGGESTED PENSION CHOICE IF MELDED WITH BCERP BY SUBJECT MATTER EXPERTS- NOT UNION BRASS

    http://tinyurl.com/APENSIONCHOICE

    Boeing of course resisted – see the BOD statemernt against.

    Now AFIK, BA never pushed for IAM 751 to accept/transfer BCERP to the PVP

    BOEING BCERP (PENSION PLAN FOR IAM, SPEEA, AND OTHERS
    http://www.boeing.com/assets/pdf/companyoffices/empinfo/benefits/pension/spd/spd_58.pdf

    However- a close examination of PVP pages 73 and on reveal that in 2011, a relatively small IAM union of BA workers in Florida WERE transferred into the PVP
    see page 98-99 in November 2011.

    http://www.boeing.com/assets/pdf/companyoffices/empinfo/benefits/pension/spd/spd_94.pdf

    The plan basically vests past benefits in whatever previous plan you were in ( sich as SCEPA in Southern calif in 2003, MDC people in 2007-2008, etc and then converts into a 401k type partially based on service, etc

    So Why didn’t BA offer the same deal to IAM751 instead of the freeze.

    The answer for sure may never be known- supercalifrigstic top secret known only to a few power point rangers, a battery of experts in ERISA, and of course a few legal staff.

    The answer may well be due to the high level games played in Congress re ERISA and IRS rules

    http://finance.groups.yahoo.com/group/ibmpension/message/80547

    • had a minor problem earlier re posting- here is the remainder

      The answer may well be due to the high level games played in Congress re ERISA and IRS rules

      http://www.pionline.com/article/20131213/ONLINE/131219916/irs-issues-testing-relief-for-closed-db-plans

      Hazel Bradford | December 13, 2013 3:57 pm | Updated 5:25 pm

      IRS issues testing relief for closed DB plans, By Hazel Bradford
      Corporations that sponsor defined benefit plans closed to new employees got some good news Friday
      from the Internal Revenue Service, which granted relief from non-discrimination testing rules through
      2015.
      Defined benefit plan advocates wanted the IRS to allow plans to be considered in compliance if
      they were at the time of closing. The IRS agreed to the change, but only for 2014 and 2015, and
      only if benefits were not enhanced for some people but not others. The IRS left the door open for
      tighter rules in later years by asking for comments on possible new ones.
      Washington lobbyists had hoped to get permanent relief from the rules, which were written to apply to
      ongoing plans. Closed plans came closer to violating the IRS non-discrimination rules as participants’
      income grew, and some sponsors were freezing their plans as a precaution, to avoid running afoul of
      the rules.
      +++

      OK it should be obvious that the old BCERP plan is on the verge of being topheavy as salaries of both SPEEA and IAM increase- and there are still many leftover supervisors/managers and execs in the plan who either have retired or will retire ( albeit under PVP )

      So to cut out the lower paid types as IAM – BA freezes the plan- especially since they get a free pass if not balanced as required under the law- at least for a year or two .. The higher average for SPEEA versus IAM for a few years would serve to slightly reduce the top heavy problem.

      And to put IAM into the long running PVP would not fix the balance problem either ( especially a few years down the road when the free pass above expires )

      Add to that the demonstrated love for the IAM by Jack welch wannabees – and his keep the worker bees stressed and get rid of unions mantra.

      Add in a bit of collusion and great PR chance re the 777X

      And voila – we have the new version of the progressive vote methods demonstrated in the WA state governors election a few years ago for christine- keep voting or counting till you get the ‘ correct’ answer.

      And meanwhile BA shakes down the state for a few Billion $$

      Score BA 8 billion plus- IAM and unions ZIP.
      ++
      And yes I agree with Scott and others that the next target re the FREEZE will be SPEEA,

      SEE seattle times sunday article by Dominic Gates

      And IMHO .. followed by the BA PVP which covers the bulk of employees…

      Now about that Global Warming issue ;-PP

  15. Now 3 active NLRB complaints against Boeing or the machinist’s union, my understanding is there will be more to follow this week

    19-CB-119657
    8(b)(1)(A) Duty of Fair Representation, incl’g Superseniority, denial of access

    19-CA-119268
    8(a)(1) Concerted Activities (Retaliation, Discharge, Discipline)
    8(a)(3) Discharge (Including Layoff and Refusal to Hire (not salting))
    8(a)(1) Weingarten

    19-CB-119267
    8(b)(1)(A) Duty of Fair Representation, incl’g Superseniority, denial of access

  16. So Boeing basically gets exactly what it wants now (with derivative model production and WA tax breaks, plus long term stability this decade w/ labor strikes in WA) and gets to do whatever it desires with 757-next/Y3 etc. All of this union foaming at the mouth was just, in retrospect, loud noises.

    Half of the present-day grumblers/loud mouths “on the union side” will be too old/deceased in 2020-2025 when 757-next production is decided, and present corporate leadership, of course, will be comfortably retired.

    • Well Buffenbarger will not resign- but he probably will be kicked out by not being re elected. seems the DOL caught him and buddies with a phony election process.

      This time it will be by the rules.

      And Poor Tom W will be toast – but a recall is difficult under the rules

      Some wags are now referring to the 777x as the 777XTORTION…
      IMO very appropoe

  17. BA Investor January 4, 2014 @ 11:14 am
    I do not believe there is any disrespect or excessive corporate greed,,,those are trite accusations that mask more complex and serious choices facing many American Companies..

    Sorry but I may have understood it all incorrectly. What was the cause of the big bust of September 2008?

    • Aero, I was only addressing Boeing’s motivation for adopting a 401-k style retirement plan in response to Keesje’s suggested reasoning.

      Was not intending to address the larger question of Corporate and Banking excesses which certainly raises many eyebrows..

      Large Companies, both private and public have been tremendously burdened by their Pension obligations as the retiree’s life span has increased. It crushed the automobile industry, as an example, so it has been far more sensible to initiate a less burdensome plan that still provides retirement coverage but does not obligate these Companies to incur liabilities that could put them out of business.

      I was just emphasizing that it was not exploitation or greed . These Plans have been adopted throughout American Industry as well as in Cities and Municipalities. It is simply a feasible ( and reasonable) solution to a changing world.

      Capitalism and its merits and demerits was not the focus I assure you I was not intending to be blind to Corporate greed and excess

      • Okay, I see your point. I do find it however, very difficult to reconcile the exponentially increasing, disproportionate salaries and bonuses of executives with the desire to save on pension plans, employee salaries and this love of outsourcing to countries where the salaries are a fraction of those in the US.

      • Aero, I also understand your sentiments. I think there are approximately 130-140,000 employees at Boeing, Some very small percent of them receive what you would categorize as “disproportionate salaries and bonuses” I always thought it would be helpful if an analysis was done during negotiation comparing executive salaries with Boeing and other US Industrial companies.

        Each industry has its compensation levels …just think what leading athletes and celebrities get paid! Running a major Company like Boeing requires enormous knowledge , skill and experience. Forbes magazine has a list of the compensation of US Corporate Chief Executives and some of the salaries and benefits are just astonishing.

        That having been said, we hear a great deal from the IAM Labor force ( which I think is around 32,000 and earns around $167,000 base with overtime bringing it to $200,000), but never from the large administrative , clerical,supervisory, accounting , etc staffs that also help build and maintain the enterprise. Are they being exploited too?

        Lastly, outsourcing could have been a very successful endeavor but, unfortunately, was not managed or supervised sufficiently . That was an egregious mistake on the part of Boeing and a very costly mistake. It appears that the outsourcing chapter is over and the 777X wingspan will be produced in Everett.

        I just hope many of these lessons have been absorbed by Boeing and their continued success will benefit not only shareholders and executives but the entire workforce .

        • BA investor …” That having been said, we hear a great deal from the IAM Labor force ( which I think is around 32,000 and earns around $167,000 base with overtime bringing it to $200,000), but never from the large administrative , clerical,supervisory, accounting , etc staffs that also help build and maintain the enterprise. Are they being exploited too?.

          Sorry – you are totally off by a factor of about 2 re IAM base

          Take a look at the wage card for IAM at http://www.iam751.org/

          http://www.iam751.org/pages/currentwagecard.htm

          And for comparison – SPEEA with 20,000 members- mostly in NW has about 2/3 techs and 1/3 Engineers

          And on the average, their wage scale is slightly above the IAM

          http://www.speea.org/Join_Our_Union!/SPEEA_Dues.html

          Dues for 2013 – $39.75

          Dues are recalculated each January with the new rate taking effect with the first pay period in February. The calculation is based on a percentage of the average hourly rate of employees in all the SPEEA bargaining units combined. Per the SPEEA Constitution, dues are set at 85% of the average hourly rate.

          A simple calculation based on 2080 hours/year yields
          $ 46.75 /hr ( unburdened ) times 2080 or 97K year.

          That hourly rate is about $6 higher than the mmaximum IAM rate- which applies to a very small percentage of IAM – probably with more than 25 years of service

      • Leehamnet, re; IAM salaries (below),

        You are right about my salary figures being” double reality”..I stand corrected..Based on info from various blogs, IAM base salaries are around $67,000 and can get to over $100,000 with overtime. (The sympathetic pro labor side of me added an additional 1 to the base salary and overtime possibility).

        Again, I raise the question how this squares with other comparative skilled industrial manufacturing positions and whether there are any valid grounds for complaints of inadequate compensation

        Sorry for the unintended distortion

      • Don, re: (IAM compensation) Thank you too for the correction.

        The comparison I was curious about was not with SPEEA but with the Labor force of companies like Catipillar,… who also build industrial products that require similar skills to the IAM machinists . Perhaps the needed skills are higher at Boeingr? That’s the issue…what is a measurement of fair compensation.and besides a comparison to Executive compensation, is the scale “fair”.or “good”

        Again, I know very few working people who do not think thy deserve more compensation.

        Thanks for any clarification

        • Unfortunately- most outsiders to an aircraft assembly , test, and flight test environment still believe the average-( most ? ) machinists drive rivets ( Rosie) pound metal (file fit or pound to suit ), run lathes, drillpresses, and drill holes with your average home drillmotor. _And they are mostly wrong. That was sort of predominant until the 60’s and 70’s on could argue, but even then the skill levels needed for final fit and rigging, alignment, test, flight line, etc were far above most tractor manufacturers then. People would believe that the Apollo-saturn lunar lander , and similar programs were designed, built, assembled, tested by engineers in white coats and crew cuts while they assembled the lunar rover, the space capsules, etc.

          I’ve got news for you !! ;-P If your CAT tractor spits and breaks a tread, or simply fails to work as you plow a field – it is a pain in the ****. And it probably happens sometime in 20 years hard, daily use, say 10 hours a day, every day.

          Now consider the same reliiabilty for an aircraft at 30K feet in mid atlantic or pacific ors even over land alaska, greenland, or mid continent. With 100 to 200 people aboard. parking places to call AAA or J adam tractor repair or BA customer services are sort of hard to find.

          And theres only the thickness of a dime between you and the outside, riveted together by the same people ??

          My point is- BA has already demonstrated the problems with a greenfield approach to building airplanes, it takes a few YEARS or perhaps a decade to come close to the reliability and safety of todays airplanes- ASK BA,Airbus,Cessna, etc

          Faster, better,cheaper, Boeing has picked faster and cheaper..

      • Don, Not wanting to belabor the point, I agree that the CAT example is probably not the appropriate comparison. Northrop Grumman is probably a better one and I wonder if their compensation structure and Unions produce more favorable wages./ employment

        I, and probably many others, are not aware of the range of compensible skills that IAM brings to the process. We have to admire and respect the quality of .f the excellent accomplishments such as the Apollo Lunar Lander or the Lunar Rover, etc. It is why we believe in Boeing as one of America’s great Companies.

        What we are trying to understand is why Management and Labor have such an antagonistic relationship and what the basis of that tension is. It is the salary/compensation structure that is the focus of this discussion. ( I am familiar with the Welch/GE explaination and do not dismiss it) Strikes and anger have been so damaging that you have to question where the animus comes from. Good salaries can make up for alot of discontent and is $46.75/hour inadequate and the source of the discontent?

        It is just this narrow issue of IAM wages that I am trying to understand. What role does compensation play in the ongoing tension between Labor and Management. Please do not introduce comparison with Executive compensation as there are 32,000 -40,000 people in the IAM Labor force and only a handful of Corporate Officers.

        This is really an attempt to understand better the hardball dynamics that we have just witnessed with the 777X vote. Your voice on this subject has been very informative but does infer ( or states) that the whole “game” has been one of Corporate exploitation. What would it take to bring Labor and Management back to a balanced equilibrium? Long term job security is certainly helpful.

        Thanks for bringing your experience and familiarity to this subject,

        • BA INVESTOR ? Thats quite a question to answer- just slighty better than ‘ how high is up ” :-P However I’ll try to provide a bit of insight- re my OPINION mixed with a bit of ( insert bias type here).

          For starters – a very good analysis that delves into the ‘ reasoning ” behind the game of cut wages to improve profits ” as relates to the current and past animus and specifically the pension game can be found in the Book by Ellen Shultz ” Retirement Heist”

          and the opening statements at that URL that starts
          ” “‘As far as I can determine there is only one solution [to the CEO's demand to save more money]‘, the HR representative wrote to her superiors. ‘That would be the death of all existing retirees.'” — and includes the following points

          Drawing on original analysis of company data, government filings, internal corporate documents, and confidential memos, Schultz uncovers decades of widespread deception during which employers have exaggerated their retiree burdens while lobbying for government handouts, secretly cutting pensions, tricking employees, and misleading shareholders. She reveals how companies:

          Siphon billions of dollars from their pension plans to finance downsizings and sell the assets in merger deals
          Overstate the burden of rank-and-file retiree obligations to justify benefits cuts while simultaneously using the savings to inflate executive pay and pensions
          Hide their growing executive pension liabilities, which at some companies now exceed the liabilities for the regular pension plans
          Purchase billions of dollars of life insurance on workers and use the policies as informal executive pension funds. When the insured workers and retirees die, the company collects tax-free death benefits
          Preemptively sue retirees after cutting retiree health benefits and use other legal strategies to erode their legal protections.
          ++++++

          I became aware of Ellen back in 1997-98 and followed her articles on those issues. It should be used as a textbook for ALL union negotiators and those interested in the ‘ backroom deals ” etc. You will some of my comments in the reviews sections as she attracted a bit of animosity from certain industry segments.

          +++
          That being said – the other side ( Unions ) have for the last 3 to 5 decades have abused the members, the federal laws, and in some cases the companies. IMO the problem is as much due to member apathy and the real issue of retaliation against those who dare question the union bcrats. So most of the members put survival first and shut up instead of stand up. I can now stand up since I am retired, and neither the union nor the company can seriously retalitate.( very much )
          Employees can not risk it. On the company side – it is unfortunate but true ( and admitted by some very high level types ) that unions ARE needed to keep the mid level and shop floor supervisors from ‘ beating the hell” ( physically and mentally) out of the workers. ( and thats virtually a direct quote I have in a letter from a long ago program manager since retired for example )

          Its doubtful those ( Union and Company ) dynamics will change unless and until a clean sweep is made in the Board and Board equivalent in the Unions. And the chances of both happening in the near term or longer are IMO very poor.

          This is getting a bit long- so I’ll stop here and start a second section in a few minutes

      • It sounds like there are too many factors that contribute to the Labor -Management tension i.e. history, attitudes, unique Union activities, confrontational management outlook, etc to reduce it to questions of compensation only.

        I still wonder if the pay scale at Northrop Grumman is similar and whether they have a better working relationship with their Unions and work force.

        From what has come out of this dialogue is that there is a built in adversarial nature at Boeing between Labor and Management that goes back many years and there is little optimism that it will be overcome. Seems to me there is a bigger burden ( and incentive) for Management to take purposeful steps to try to abate this tension .

  18. A Singapore a380 had to make a emergency landing in Azerbaijan today owing to cabin depressisation problems no injurys.
    yesterday a Boeing 767 crash landed in saudi arabia with landing gear problems on the right hand side reports afterwards are saying that body parts fell out of the landing gear bay on the flight path before landing.

  19. I’ve got a question. The people at WA have been trying to diversify from Boeing and woo other people like Airbus right? Just wondering, but why do they think Airbus who has no doubt been watching the mess that Boeing and the unions entangle themselves in every two years or so, would see this and still want to move their business there?

    • There have been no genuine attempts at economic diversification. A little grandstanding here and there, But the State Legislature always takes the easiest way out, which is to bow to Boeing’s demands.

      To diversify would mean they actually have to do something.

      As to Airbus I think their attitude towards unions is not knee jerk negative.

  20. In God you trust!
    BA Investor,salaries in the States have always been higher than in Europe (double?). The reason being that you have to pay for everything. Education is expensive. Health is expensive. Houses are expensive.
    Now you state that because the life expectancy is longer the retirement system is no longer valid. People are supposed to save for their retirement. I have been travelling to the States for more then 30 years (Still work for a US Company), and I have never seen so many people living so badly.
    Is it really necessary to earn milliopn dollars? Does it make you more happy?
    In God you trust! B******T

  21. How to layoff employees for fun, profit, and union busting.

    Several years ago I made a plot based on std benefit data available in 2008

    THE STORY OF JOELUNCHPAIL WAS DONE IN 2008. IT STILL APPLIES
    http://tinyurl.com/JOELUNCHPAIL2

    The concept still applies, but a recalculation shows even MORE $$ for Mother B with the freeze.

    BTW h ow many know the official name of the Boeing Pilots Assoc for many years was ” the lazy B ” ?

    Anyhow, I’ve made a first pass

    JOE LUNCHPAIL ( AKA JL ) NOW CONTRIBUTES EVEN MORE TO THE BOTTOM LINE

    JL hires in in 1996 at 20 years of age.
    JL has 20 years of service in 2016 what with bonus other pay that counts averages 3 percent/year
    BA sticks 6 pcnt/year of JL pay into BCERP fund
    JL gets layoff end of 2016 ( makes no difference by the way since service is frozen in Oct 2016)
    JL has vested pension from BCERP of $ 1900/month- available when JL turns 58
    But we will assume for ease and rounded calcs that JL does not file for his BA pension until age 62.

    During the time JL works, BA sets aside ( invests inBCERP fund ) a total of $ 51K dollars
    However Boeing claims anyone can make an average of 6 percent or better, and surely in a large managed fund like BCERP, BA can do as well.
    Which means that although out of pocket contributions are 51K, IF they made 7 percent/year on the increment deposits the 51 K is now about 102 K $$
    Now the 102K stays in the fund for 22 years , and earns an average of 7 percent, at least as well as Joe can do according to BA … and is now about 425 K $$.

    Now Joe is probably a family man- and wants to leave some to his spouse, so Joe, at age 62 takes 85 percent of his 1900/month = $ 1615 or 19380/year from ” his” fund starting at age 62.

    Now not being a Seattle Stoner- Joe lives till 85 or 90.
    If he gets permanent wings or perhaps free pitchfork at 85 or 90 how much is left in his account.

    Well we can assume that his account still makes 7 percent/year on the balance or about half that per year due to ongoing depletion or a conservative 1/2 of 7 percent or 3.5 percent

    At age 85 – remainder is about 270K and at age 90 about 216 K.
    Should be enough for spouse for a few years – at least about 10 years more not counting interest.

    Unless Boeing sends out a hit squad to terminate him at age 80, leaving a mere 315K

    BTW- forget the myth re BA or any other retirees dropping off within x years ( 2 to 3 typical ) of retirement. That comes up about as often as the sun. Its a MYTH !!

  22. Pingback: Dear Boeing: Next Time, Try Benevolence | We Report

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