Update: Boeing spokesman Tim Healy provided this response to us when we asked about the article:
“We were utterly serious about reaching an agreement. And we told the IAM quite precisely what we needed from them and when.”
The Everett Herald has this stunning story that virtually confirms the IAM’s allegations that talks with Boeing over siting 787 Line 2 were a sham.
US Sen. Patty Murray (D-WA), Boeing’s biggest supporter in the Senate, was aware of the situation and tried to persuade Boeing to choose Everett, according to the story–which explains why she issued a statement after Boeing’s decision to select Charleston to not blame the union.
Here is the story from The Herald:
By Jerry Cornfield
At least it seems that way now to Sen. Patty Murray.
Months of quiet diplomacy on her part ended in disappointment when Boeing chose Charleston, S.C., over Everett for a second assembly line for the 787.
Disappointing but not surprising.
Signs of the company’s intentions had been popping up for months say those familiar with conversations that Murray had with Boeing.
Boeing executives only half-heartedly penciled in Everett for the coveted production line, discouraged Murray from rallying on the city’s behalf, held bad memories of the strike and Gov. Chris Gregoire walking the line, smarted from battles with state legislators and purchased a South Carolina aerospace company.
Murray heard firsthand on Feb. 9 about South Carolina’s favored status from Boeing execs Tim Keating and Phil Ruter. Charleston topped the list of choices with Everett scrawled along the margin, its chances slim if not none. They suggested Murray not waste her immense political capital trying to alter the course of events set in motion by Boeing’s big boss Jim McNerney.
Boeing’s plan for a second production line somewhere in America — the third will surely be in China — had gone from rumor to fact weeks before that February meeting.
Everett’s chances already seemed next to nil given the bitterness stirred by the Machinists strike in 2008.
McNerney had reached wit’s end with the union. He had shareholders pressing for profits, customers demanding deliveries and little patience for a work force eager to strike.
Yet, he liked Murray and respected the gravitas she holds in the nation’s capital. If she got deeply involved, McNerney was going to press pause on the process to see what evolved.
Murray began in February working to open a line of communication between Boeing and the union. The two sides needed to be talking if Everett was to have any shot at besting Charleston.
It wasn’t going to be easy. Even if they did start chatting, Boeing wanted a guarantee they could run a second production line for years without fear of strikes.
They called it a stable work force. They demanded a long-term contract ensuring no walkouts, period. They wanted 10 years of guaranteed labor peace.
To ask any union member to give up their right to strike is heresy. To ask Machinists fresh from the picket line and full of mistrust for those running the aerospace giant is, well, crazy.
Murray didn’t go that route. She did urge union leaders to look at the big picture for the long haul and to hear Boeing out. She wasn’t trying to mediate or negotiate for either viewpoint only to keep the conversation going.
Boeing deliberately set the bar high. For weeks and months there was little movement from workers. Murray, meanwhile, kept in touch with McNerney, meeting with him in May and June.
Neither side wanted lawmakers in the room during talks. So it left Murray, others in the congressional delegation, the governor and local elected officials to preach patience to both sides as Boeing signalled more of its intentions by buying Vought and securing development permits in South Carolina.
On Wednesday, Oct. 21, the union did something Boeing never expected.
Machinists reached up and grabbed hold of the bar McNerney thought was safely beyond their grasp. They submitted a “best and final” offer with a contract extension assuring no strikes through 2020.
Workers had a few things they wanted in the way of wages, benefits and, probably most annoying to Boeing, a commitment from the company for future work at the plant. These were negotiations on a long-term contract extension so a counteroffer from the aerospace company seemed in order.
It didn’t come.
Boeing went silent. Two days later, McNerney and Murray talked. Over the weekend there was a phone conversation between union and Boeing leaders.
Come Monday, Murray was back on the phone with McNerney, stressing how success was in sight with the two sides within an inch of one another’s positions. She felt confident the union would modify its stance if Boeing responded. McNerney made no promises.
The next night, the eve of the decision, McNerney and Murray spoke again.
This conversation differed from all their others. He told her a stable work force was not the only issue to be considered, though he didn’t share what other issues concerned him.
The conversation ended and with it all pretense of a second look at Everett.
Murray’s spokeswoman Alex Glass said this week, “I think Boeing was surprised they got as close as they did and may not have wanted to get to the finish line.
“There was somewhat of a feeling the jig was up and if they sat down with the union again they might have got more from the union,” she said.
Wednesday morning, Murray invited union and Boeing negotiators to her office, publicizing the sit-down to the media. Intuitively, she knew the decision was a done deal and Boeing would not show up.
This was no last-ditch effort, this was a brush back pitch from a skilled politician.
McNerney was to call her at 3 p.m. that day but didn’t. He was on a plane to South Carolina. He phoned after 4 p.m. and Murray let him rest on hold while she considered her words.
Framed on her wall is the first speech she delivered on the floor of the Senate in 1993. It was about Boeing, its history in the state and its roots in the people.
Reading it again gave her a moment to get perspective and decide what she would say. She picked up the phone and spoke of how the Boeing she knew for years is not the Boeing she’s been dealing with for months.
She hung up, still one of Boeing’s best allies in Congress where Washington’s interests are at stake.
There is really only one surprise in this week’s decision: how long it took to be made.
Political reporter Jerry Cornfield’s blog, The Petri Dish, is at www.heraldnet.com. Contact him at 360-352-8623 or firstname.lastname@example.org.
I’m no Patty Murray fan, but a FAIR and honest republican (some may scream rino) and she’s right on this, and as a shareholder, I have to admit the union is as well. I’ve theorized this situation for some time now, and all the available facts support the idea that this was all a big show put on for the media and the public for use against Boeing’s unions, and an example of not thoughtful leadership, but a purely spiteful billionaire CEO.
James McNerney injected his personal emotions, frustrations and feelings into the arguement, and that makes him unfit. You could hear hin practically seething during the conferance calls. And even as the union tries to get over it and get on with building airplanes, Boeing keeps yanking it’s chain. They have made thier decision, why can’t they show some steadyness, some fraction of diplomacy, and just shut up?
Because that’s not the plan. The plan is to keep up with the heated rhetoric, profits be damned.
You know, if Boeing wanted to make the mistake of moving line 2, they should have just done it, coldly and efficiently. But instead, the deliberatly chose the most mendacious methodology and conflict creating way they could summon up. And they are maintaining it still. And I predict they will keep up this awe inspiring hate mongering for the next three years, trying to bring the Union to heel.
The policial far right, the talk radio fans, and the pathological union haters will be de-facto ground troops in Boeing’s cold war against it’s workforce.
It won’t work. The union will close ranks and snarl and fight like a wounded animal.
Boeing is good; good at deception. The public, the media, and politicians have been duped! Okay, first the last 3 of the 4 union strikes were planned by Boeing. Usually they were designed to allow vendors to catch up or other circumstances benefited by a temporary labor suspension. Successful negotiations usually came after the 45th day as delay penalties were waived. A media smear campaign of the union always works, by spending dollars to show all positives offered to the union while no mention of the negatives. The union will not spend that kind of money explaining to the public what the positives and negatives are; they only need to present that information to the members. It’s corporations’ way of pitting the public against the “greedy” unions.
Now let’s bring that union, err… ornery stepchild out again and use them as the excuse to pit states against each other to extract as much tax incentives as possible. Yup, Washington State was the winner with the highest bid for the 787’s first line; costing tax payers millions (raised an eyebrow with the WTO). It was all planned. Fast forward to 2009, Boeing knew a second line would be needed and there would be limited space in Everett, especially so if they get the tanker contract. So let’s bring that ornery stepchild back on stage for another round of state against state auction. Woo hoo, S.C. wins the auction this time. I like the comment their legislatures made about the incentives not being meant for any particular company that they didn’t want to name. They don’t want the WTO to suspect anything of course.
While I’m on a roll, I’d like to bring up the downside of outsourcing. Cutting cost by outsourcing seems to be a good idea in the near term, but with Boeing and Airbus in a duopoly, they are just making it cheaper for their next competitors to buy off-the-shelf parts to build their products. Not much R&D cost for tens of thousands of parts. Hey, didn’t out sourcing happen to the auto industry starting in the 60’s, by the 70’s Japan became a menacing competitor? As out sourcing continued more countries got into the business. Look out! Here comes China. Boeing’s talented engineering ranks will be depleted to a point that they will not be capable of building new designs since so much know-how has been farmed out. History shows that’s what happened to Douglas Aircraft.
The 787 was a huge leap in technology, but bean counters called too many shots. You have to engineer the best product possible first, then after it is off the ground you let the bean counters in to gradually work in the lean manufacturing. It is obviously a failure if you do it in reverse order.
Not really surprised –
If Boeing wanted another site available in case of storm-earthquake, etc they could have gone to Moses lake.
The anti uniion stance has been obvious since McDummy bought out Boeing – complete with Stonecipher, McNeaqrney, and at leaqt one other Ex GE bored member. Then there is John mcDummy himself – also anti union anti worker.
Also, the IAM ( national ) did not help with the phony election that got the IAM members in SC so roiled up they decertified.
Leaving out SPEEA entirely makes for some interesting speculation, since a SPEEA strike could cause even more disruption- since Boeing would have to keep IAM workers on payroll, and NO or very few planes could be delivered – or even get thru final assembly. Of course over the years, BA has tried to reduce that by creating some associate DERS who are non union, but would there be enough. ?
Over the next few years, a large quantity of the Boomere generation of IAM and Engineers will be retiring, and as a result of earlier cutbacks, there will be aq significant lack of the right kind of experience needed to generate a new plane design, and keeping up to date .
But by the time the wheels start wobbling, mcNerney and his senior power point rangers will be in their permanent golf game mode.
In the early 90’s- McDummy tried to set up a line in Taiwan – and the predictions then seem to be more like deja view all over again. Note it was a few years later when they ( MDC) finally collapsed
read the details here
I have known Patty Murray since she was first elected. I even campaigned with her in 1996 and like and respect her. We at NAKOA Aviation Partners tried to warn her about Mr. McNerney’s lack of accountability and Boeing’s questionable role in the last KC-X program. As you may recall, Mr. McNerney was not responding to our charges of ethics violations from his own management at BCA on that program.
How ironic that we at NAKOA argued that a larger aircraft would be a better fit for the KC-X, only to have Boeing tell us the USAF wanted the smaller KC-767. We asked them how they knew this — they said they learned it from a Goggle search on the Internet. This was in Oct. 2006. We then complained to the USAF about this in Nov. 2006 but they wouldn’t agree. We also expressed our concerns to them that former USAF Chief of Staff Gen. Mike Moseley was openly for the KC-767 and possibly that is where Boeing got the info? In the end, the USAF picked the ‘larger’ KC-30 and Boeing cried foul. Even Norm (Dicks) publicly complained that the USAF privately told him they wanted the 767 not the larger 777. When it was over, the USAF had wasted over $100 million in tax dollars on that aborted attempt and earlier this year Gen. Moseley was found by the DoD Office of Inspector General to have misused his office to help a DoD contractor.
In 1996 when I lived in Washington State, I ran with four other democrats for Congress in the 2nd district which included the Everett plant. I thought that being a former member of the IAM would help and was concerned about jobs being outsourced overseas — namely to China. One of my campaign slogans was “Do you want the next Air Force One built in China” with another being “Americans Working Together”. My plan was for Boeing, McDonnell Douglas and Lockheed to work together to build a Super Jumbo Jet for the commercial airlines and possibly the USAF. They did not listen and now we have the A-380 to contend with.
I guess I was wrong about China because at the rate we are going it will be Boeing jobs going to somewhere else in the U.S. not China.
Mr. McNerney needs to be replaced and Sen. Murray needs to realize he is nothing more than a typical CEO, out to pad his, the Board of Directors and Wall Streets pockets on the backs of the workers.
BTW, earlier this year there was a lawsuit filed by an ex-Boeing worker named Joseph Sicilia who worked in their ethics office. He accused Boeing of fraud and a cover-up in that office and even named the ‘Global Settlement Agreement’ with the DoJ on the previous tanker scandal as being compromised. It was around the same time we had our problems with them on the KC-X. I am not sure of the current status of that suit.
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