The news that Boeing is leaning toward proceeding with a new airplane instead of a re-engined 737 serves as yet another wake-up call for Boeing’s labor unions and Washington State officials to get their act together.
As we report in the preceding post, Boeing may forget about re-engining the 737, a widely-held belief that the company would do so. If Boeing did, Washington State and the unions that build Boeing’s airplanes here were assured jobs would be safe as long as these legacy programs remained in production.
We have been speech-i-fying on this topic for a year in which we have repeatedly warned that once a clean-sheet airplane program is undertaken, Washington officials and the unions need to be concerned that Boeing will compete the production with other states to get better business and labor costs.
Boeing Commercial President Jim Albaugh is on record saying he wants to build the 737 replacement airplane right here in Puget Sound (Seattle). But he added a significant caveat: it depends on labor. And the IAM still doesn’t get it.
Tom Buffenbarger recently threatened Boeing with a strike in 2012, when the next contract amendable date comes up. This is an astounding position to take, given that Boeing located 787 Line 2 in Charleston because officials said they were fed up with the IAM and repeated strikes.
While the IAM Local, 751, believes it was “used” to gain more concessions out of South Carolina and that the decision was already made regardless of its willingness to provide longer stability (and there is compelling evidence this was the case), there is no getting around that Boeing wants to reduce its exposure to the militant IAM.
(We believe the IAM 751 Local is much more willing to work with Management than Buffenbarger, whose agenda is markedly different due to his national concerns than the Local has for its own membership. If left to their own devices, we think IAM 751 and its president Tom Wroblewski could reach an accord with Boeing that would best serve local needs but which could very well be at odds with Buffenbarger’s national concerns. This is why we suggested in February that IAM 751 should divorce from IAM International, an idea that earned us a tongue lashing from the union. We stick to our guns, however.)
We remain absolutely convinced that Boeing will compete the production location for the 737 replacement (and, should it come to it, a 777 replacement as well).
The IAM and an increasingly discordant SPEEA, whose own relations with Boeing appear to be getting increasingly testy, have to ask themselves if drawing lines in the sand and losing jobs is more distasteful than figuring out how to provide long-term stability at lower costs and retaining jobs.
We certainly understand resistance to giving up hard-won gains, but there is the old cliche that it is better to have 50% of something than 100% of nothing (“50%” being the number in the cliche, but this figure is variable).
Boeing has the upper hand. It can put production anywhere and with the 787 Line 2 has proved its willingness to do so.
As for Washington State, there are still business climate issues affecting Boeing, Washington aerospace more broadly and business in general that need to be adjusted. Washington’s elected officials have a history of waiting till the last minute to address what by then becomes a crisis. A little forward-thinking, beginning now, is the far better course.
All parties have a to begin thinking about these issues now. Boeing is to decide by the end of the year about the future of the 737. This is not far away. If Boeing decides to proceed with a new airplane, there will be about a year before it decides about production location.
We said a year ago the clock is ticking. It won’t be too long before Boeing sets the alarm.