Outside the box

We spoke last week at the Pacific Northwest Aerospace Alliance (PNAA) annual conference in Lynnwood (WA) in which we made two proposals that were immediately labeled as radical–though we don’t think they are.

One involved Boeing and the IAM 751 local and the other was aimed at the State of Washington.

Dominic Gates of The Seattle Times summed these up nicely, with reactions:

“Outside the box”

aerospace ideas

Aviation-industry expert Scott Hamilton wants to shake things up to preserve Washington state’s top manufacturing industry, and the well-paid jobs that go with it, in the face of growing competition from other regions and countries.

Wednesday, in a pitch to an audience of managers and executives of local aerospace companies, Hamilton offered two radical proposals:

• Washington should amend the state constitution to allow the direct payment of incentives to companies wanting to locate here. That would create “a level playing field,” he said, “so we could do what South Carolina did.”

• The District 751 Machinists should “divorce” themselves from the International Association of Machinists (IAM) to form a separate union that could act solely in their own interests and be more flexible.

Issaquah-based Hamilton spoke in Lynnwood at the annual conference of the Pacific Northwest Aerospace Alliance (PNAA), the trade group for local suppliers to the aviation industry.

One state government official present dismissed the first idea as politically impossible, saying, “We’d get an income tax first.”.

As for the union divorce, that also seems highly unlikely, too.

Hamilton’s premise is that the International, which plays the lead role in contract negotiations, may take a more militant, no-concession approach to 751 bargaining because it knows that later contracts with other companies will follow the pattern set with Boeing.

And the interests of the local and the International have occasionally diverged. A 34-year local union veteran recalled that during the 48-day Machinists strike of 1989, District 751 president Tom Baker rejected out of hand a request to negotiate an issue into the contract that wouldn’t have affected his members, but was intended to provide leverage for Canadian Machinists.

But these days, the union veteran said, the link between Local 751 and the International is tight, “like family.” And District 751’s 26,000 members and the dues it sends to the national union give it more clout than most IAM districts.

In response to Hamilton’s suggestion, Machinists district 751 spokeswoman Connie Kelliher jokingly offered a quick counterproposal, one that isn’t happening anytime soon, either.

“We think it would be highly beneficial to the state of Washington and its aerospace industry if Boeing Commercial Airplanes group would divorce itself from Boeing-Chicago,” said Kelliher. “We’ve certainly found BCA leadership at Longacres to be more reasonable and flexible in our dealings with them.”

The main message of Hamilton’s PNAA presentation was that local aerospace companies need to diversify their businesses beyond building parts for Boeing airliners.

Afterward, he said he threw out his two proposals at the end only to force people to think “outside the box.” Neither one, he conceded, is ever likely to fly.

— Dominic Gates

We’ll add one more:

The Boeing Co. gets about 50% of its revenue from Boeing Commercial, which is headquartered in Washington State–yet not one member of its Board of Directors is from Washington. We find this, umm, odd at best. It also shows the disdain Chicago shows for Washington. The Boeing Co. just added a Washington (DC) insider, a former US Trade Representative, to the Board. You would think that Board representation for 50% of its business and tens of thousands of employees might be in order.

Perhaps IAM 751, SPEEA, shareholders and elected officials should nominate and press the Board for Washington representation.

6 Comments on “Outside the box

  1. It seems “outside the box” is a lonely place, Scott! For years I’ve advocated (admittedly on select places on the internet) for (1) a long term labor contract between Boeing and its workers of 7 years or more; and (2) a JV between Boeing and Lockheed Martin for the 737RS. The first is probably dead. The second?

  2. 1. Chicago is in control, totally.

    2. It doesn’t matter what the IAM does or doesn’t do.

    3. It also doesn’t matter what Washington does or doesn’t do.

    4. Chicago wishes the IAM crushed, dead, gone irrelevant, at any cost, no matter the damage done.

    5. Washington state incentives don’t matter to Chicago either, but they will take them if Washington’s desires align with Chicago’s strategic plans, but Chicago will make no binding commitments in exchange. Ever.

    There is no “box” to be outside of. Boeing’s senior leadership and board have the company on a set tragectory, and there is substantial inertia behind it, and nothing will stop it save a revolt by the major institututional holders of BA stock.

  3. Agreed. These would make sense if Boeing Commercial Airplanes was a separate company that focused on the commercial market and maybe did some defense work here and there with special mission derivatives of their commercial line. But Boeing is now a giant defense contractor, and it sounds like the board is far more interested in being like Lockheed Martin than like Boeing of old.

    Who knows, perhaps BCA will get spun off one day because it “no longer fits with our core line of businesses.”

  4. why does scott hamilton always refer to himself as “we” rather than “i”?

    or is there a second nameless person helping him write and present these things?

  5. UAW used to strike the auto company with deepest pockets. Figured that company would be more likely to cave because they could afford it. Then that contract would be the standard for the other two of the big three.

    IAM seems to be doing the same thing with Boeing.

    IAM leadership appears to disparage Boeing offers in order to get the membership vote to strike. Terms like “take away” are deliberately chosen to evoke a strong emotional response. It is human nature to be outraged by having something that is yours “taken away.”

    Clearly when language of this nature is being used by IAM leadership, they are not trying to narrow the gap in positions.

    From the outside looking in, I can’t comprehend how above industry norm compensation packages are “take aways” and cause for strike.

    The world is changing and the IAM leadership wants to maintain the status quo. And striking Boeing is their chosen tool in pursuit of the fool’s quest to maintain that sweet era of the 1980’s.

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