Bloomberg has this long story looking at the 787 development since last June, when Boeing officials then predicted the airplane would make its first flight by June 30. Only two days later, Boeing announced another delay for the troubled program that ultimately stretched to six months.
Bloomberg’s story is an interesting look at the 787 program and other challenges facing Boeing as it recovers and prepares for new competition with Airbus in the 737 and 777s arenas.
But what caught our eye most was this excerpt:
Inciting a Strike?
One of Albaugh’s first decisions was to build a second 787 plant in South Carolina, where workers can’t be required to join unions. After four strikes in two decades, Boeing needs to keep up deliveries, Albaugh says.
Association President Tom Buffenbarger says Boeing is inciting a walkout in 2012, when the contract for 27,000 workers runs out.
“Their ability to sustain a long strike: I don’t know what it would be at that point,” he says.
McNerney says he’s puzzled when machinists, who earn $26 an hour, demand more money.
“The Chinese are coming,” he says. “The cozy world of just the two of us is almost over.”
Neither Buffenbarger’s quote nor McNerney’s response is surprising. Our reaction to placing 787 Line 2 in Charleston was that 2012 would prompt “payback” by the IAM. And we also noted in a report we co-authored for AirInsight about Boeing that new competition is coming (helped in no small part by Boeing and the other Big Three airframe OEMs, by the way).
But we also noted in the Boeing report that the IAM is playing from the weaker position. It is certainly true that the union can disrupt production and make life miserable for Boeing and that the IAM, resorting to such tactics, might win near-term skirmishes. (It should be noted, however, that there are many who believe the union did not achieve anything of substance in the 2008 strike, a view disputed by the union.)
But in the long-run–defined as over the next 20-30 years–Boeing has the ability to shift production from Washington to a non-union state. Boeing is in the position to win the war, even if it could lose near-term battles.
The AirInsight report called on both sides to take a new look at their respective positions. Management and labor are best served by working with each other, not by making threats.
Boeing has admitted it made serious mistakes in the level of outsourcing on the 787 and vowed to bring some production and engineering work back “in-house” to rectify this. Of course, now that Boeing owns all of the Charleston facilities, “in-house” includes Charleston. But the 787-9 production has been pledged for Everett. Separately, Boeing Commercial President Jim Albaugh has said the Seattle area is the first choice for successor airplanes to the 737 and 777 when the time comes–but this depends on the unions.
Buffenbarger’s shot across the bow today about 2012 isn’t going to be productive to the long-term interests of Puget Sound workers in his 751 Local. If fact, although as we noted, this isn’t particularly surprising, we find the comment to be distressingly dumb. Albaugh sent a major signal that we view as hopeful for Seattle; common sense says you respond with a measured reply, not a threat.
IAM 751 president Tom Wroblewski had it right after the disappointing news that 787 Line 2 was going to Charleston. Infuriated though he was over what Wroblewski viewed as cynical manipulation by Boeing in its talks with the union, Wroblewski said his workers had to buck up and produce the best airplanes they could, step up and institute the 787 surge line efficiently and through these efficiencies prove that they do, can and will produce airplanes better than Charleston or anyone else.
Buffenbarger, president of IAM International, is not, in our view, helping the situation. We believe Wroblewski has a better understanding of what’s best for his membership than the International chief.
At the same time, we don’t hear that management is particularly out-reaching, either.
Albaugh is widely regarded by those who know him as aloof with labor. While CEO of Boeing’s defense unit, Albaugh was described as assigning all labor relations to his labor guy and staying out of the picture. In fact, the leadership of IAM 837 (the St. Louis local, where Defense is headquartered) told us they only met Albaugh once at a social event.
At Boeing Commercial, Albaugh has, according to our sources, largely followed this pattern. Except for an initial meeting with IAM 751 and SPEEA, the engineers union, following his appointment, Albaugh reportedly has left labor contact with the company’s labor negotiators. (In fairness, Albaugh has certainly been busy getting the 747-8 and 787 programs fixed.)
We hope this approach changes. Albaugh has a great opportunity to improve lines of communication with 751 (and SPEEA, whose contract is also amendable in 2012). And there is no doubt this is vitally needed–on both sides.