IAM 751 vs Boeing on 787 Line 2

Dashing off a quick note here, since we’re still on hiatus.

IAM 751 successfully achieved a complaint and hearing from the National Labor Relations Board filed a year ago against Boeing, alleging that the October 2009 decision to establish 787 production line 2 in Charleston (SC) was retaliation for the 58-day strike in August-September 2008. Boeing, in October 2009, was clear that it wanted stability and a long-term contract to keep Line 2 in Seattle, but that the union made unacceptable demands in the form of a guarantee of future airplane work in Seattle; and Boeing neutrality in all IAM efforts to organize labor at any Boeing plant nationwide. Boeing wouldn’t agree to either demand.

We wrote at the time we thought those two demands were unreasonable and in the case of the production guarantee totally impractical–the latter if for no other reason than Seattle’s Puget Sound region lies in several earthquake fault zones. All you have to do is look at the recent Japanese earthquake (forget about the tsunami effect) and aftershocks, and you can see why it’s prudent for any company management to have the ability to look at production diversification to mitigate natural disaster risk. (Seattle also is in proximity to several dormant, but not extinct, volcanoes.)

As to the NLRB complaint, 751 as you would expect is happy its assertions have been validated enough to go to a hearing. Boeing, as you would expect, completely disagrees with the action and calls it without merit.

We’re not a lawyer and we don’t know labor law and we’re not going to attempt to discuss the merits. But we’re big on practicality and from this standpoint, the NLRB action is completely meaningless.

We compare with with the WTO Airbus-Boeing complaints and actions. Remember, the WTO panel findings over illegal subsidies are just that: panel findings. The Airbus subsidies complaint finding it under appeal; the Boeing finding is going to be appealed. After these appeals are determined, the WTO ruling body has to accept them, modify them or reject them. (Acceptance is likely.) Then negotiations begin to resolve them, and these have to fail before sanctions may be authorized. It will be years to resolve these issues.

Likewise, with the NLRB complaint, hearing has to take place. Even if one assumes Boeing loses, the company will appeal and if necessary all the way up to the US Supreme Court. In the meantime, Charleston Line 2 proceeds according to plan.

Boeing has more than $1bn invested in Charleston; it’s not going to give that up. Some sort of accord would be found with the union in the event the US Supreme Court found against Boeing.

Furthermore, a second 787 line is already planned for Everett; it’s called the Surge Line, which is, for all practical purposes, going to become permanent as Boeing ramps up production beyond the 10/mo that will be necessary to catch up on delays and provide new production slots for repeat and future customers.

Bottom line: the NLRB complaint gives 751 a good set of talking points and, at least for now, a moral victory. But whatever the merits, the practical effect is nil.

Back to hiatus….

13 Comments on “IAM 751 vs Boeing on 787 Line 2

  1. IMHO-I agree – other than setting the stage for next year and making a publicity statement, there is simply NO way BA will shut down Charleston. IAM may well have shot itself in the foot for future considerations like new 737-X assembly.

    As to the disaster scenario- it would be a good move and prudent to have an alternate facility for many reasons.

    IMO – IAM and SPEEA should be working the issue NOW re 737-x and extolling the virtues of putting together a pitch for Moses lake- which mostly avoids the earthquake – ( but not st helens issues ), has the field, power, space, and reasonable close to Seattle regarding transportation and available workforce, along with shipping issues from midwest.

    Both sides would have to give a little- but the long term bennys would be great.

  2. Boeing is right to refuse the demands of union [deleted]. Opening the Charlston plant does give Boeing diversity in manufacturing, should something happen in the Seattle area (earthquake, volcano, union strike, etc.). Boeing has a lot of work available for the union thugs with the B-787, B-747-8F/I, B-767, KC-46A, B-737NG, B-777, P-8A/I, etc. in the Seattle area. There is at least 10 years of full employement just in the Seattle area.

    I noticed the IAM local 751 [deleted] are not concerned of their fellow union workers in Long Beach who are working themselves out of a job as the C-17 program winds down.

    The acceptance of the “complaint” by the NLRB was never in doubt, not with this union loving POTUS. It is funny that the union calls the Boeing SC plant retaliation. The strike they staged in 2008 almost crippled Boeing. But, then again, the union “leadership” doesn’t care about that either. If Boeing has to let some union [deleted] go because orders dried up, the union doesn’t care. After all, the “leadership” still gets their paycheck ever week, from the dues paid by the “members”.

  3. I agree that Boeing Management had every right to do what they considered to be in the long term interest of the Co. but, I do not remember the issue of earthquakes to have been one of the reasons.
    The negative effects of strike and the higher labor costs were and if those were the real reasons for Boeing moving a second assembly line from Seattle, which believe they were, than why did Boeing not open a second 787 assembly line in China?

    Airbus put another A320 assembly line in China near Bejing and not only did they achieve what Boeing is expecting to achieve in Charleston, i.e. lower labor costs and absolutely no strikes, it would, as a minimum,have matched Airbus and secured extremely valuable goodwill and associated market penetration, which are in Airbus’s favor now!

    The fear of transferring technology could NOT have been a big factor, in the case of assembly only, as this is the case for Airbus and would have been for Boeing. A missed opportunity?

    • Boeing successfully establishing an assembly line in China?

      They can’t. And for the same reasons why US management types
      flounder in Europe.

      The basic capability of managing a workplace well was about
      the first thing ever outsourced: in this case to the unions.

      And the unions certainly won’t help Boeing in that respect.

  4. After moving the Headquarters to Chicago and selling Wichita to Spree, the move to Charleston is just the first major step in breaking the Union’s grip on Boeing. It is my feeling that Boeing will wait and see if the Union becomes a little more reasonable or are additional sell-off of facilities to sub-contractors necessary and possibly more work moved to right-to-work states or even other countries, time will tell.
    Of course there is always the possibility that Boeing could go the way of GM and the Union would lose big time. The old saying “Don’t bite the hand that feeds you” is and always has been true.

  5. This is a result of the Obama admin loading up the NLRB with union hacks. regarding this issue, the only question is which side used the larger caliber foot bullet

    • Just a reminder: Obama is from Chicago, Boeing is a Chicago company and McNerney is on at least one and maybe two presidentially-appointed commissions.

      • yep but trumka spends more time in the white house than in his office in D.C. Look at the pedigree of the NLRB counsel, the other appointees to the NLRB and by whom. An underlying issue is the right to work states and the (IN) famous card check legislation that dies last year.

        AS I said – both parties have designed their own footbullets. McN[erney] and his minions figured they could get away with PR games of coercion, and blabbed out of school as a result of their misplaced egos. Keep in mind what was happening in 2008. At that time, they figured that by 2010-2011 they would be in near full production of the dreamliner, the 747-800 would be flying, etc. And BA had no doubt a glimpse of the then coming changes to healthcare ,etc.

        Maybe a better word would be HUBRIS re Boeing, and an unrealistic assumptions by IAM.

        SPEEA should keep out of it- but given the current leadership- it is unlikely.

  6. Old wisdom: Too heavy labor conflicts are bad for business. In the early stages of a labor conflict usually management gives the impression of being boldly victorious, ‘ringleaders’ among the workforce are singled out and sacked, draconian sanctions are forced upon the rest of a more or less helpless workforce. In reality, the deafening silence that follows such measures is not the end but the beginning of a myriad of troubles: ubiquitous frustration materializes in product defects, delays, sabotage and so on. Thus, a company which is in such a dire situation as Boeing Commercial Airplanes, simply cannot afford heavy labor conflicts.
    Have a look here: Thousands of bolts have to be reworked on the 787 wing joints.
    The ever growing cloud of unfinished 787 dreamliners choking up the Boeing
    production lines is telling us everything we need to know about working atmosphere
    at Boeing.
    If that Boeing 787 dreamliner series doesn’t get certified soon, it will instead be called the ‘Nightmare-Liner’, throughout aviation industry, and regardless of its beautiful exterior. In the end both the Boeing company and its workforce will lose.

    • You might have missed it, but every B-787 assembled to date has been in the Seattle area, by union labor. While some of the problems to date are management, engineering, or design problems that have had to be corrected, other problems are quality control and incorrect installation/assembly. It is these problems that have come from the union work force.
      Does anyone remember the Firestone tire problems on the Ford Explorers and the Firestone 500 tire? Those were assembly problems by Firestone and its union labor force that actually killed people, including a very close friend of mine.
      It is not logical for a union to claim they have a “right to work” but non-union workers do not. That is the essence of the issue here.
      The IAM filed their complaint more than 2 years ago with the NLRB. But the NLRB only began to address the ‘issue’ now when the new Boeing plant is near completion and about to begin production. This is a political stunt by the IAM and NLRB to assure Boeing has spent the maximum amount of money yet has, to date, obtained zero return in their investment.
      The timing is intended to do maximum ‘punishment’ to Boeing at a time when their expenses are highest in the B-787 and B-747-8 programs and the certifications of both within a few months. The NLRB and IAM knows Boeing needs to complete the certifications and begin delivery of both airplanes. But the unions know they can tie Boeing up in court and with the NLRB. The NLRB’s attorney issued a stupid ruling design just to waste time. He (Mr. Solomon) said Boeing is ‘violating federal law’ by opening the SC plant, but failed to say exactly which law Boeing is violating.
      This is all just made up by the IAM and Obama’s NLRB. If I were Boeing, I would immediately begin expanding the SC plant, and look at building new plants in Alabama, Texas, and other ‘right to work’ states. Then begin moving all production out of Washington State, and close down that operation, just as they are doing to the Long Beach, California plant once the C-17 line closes.

  7. As usual- the pundits and LAMEstream press spin the NLRB V Boeing issue to fit their agenda, as do most politicians- damm the facts – full court press to mix metaphors. I’ll have to give IAM credit for at least trying to get the FACTS out. Going to the IAM site at http://www.iam751.org/
    and clicking on the link listed as Update 4/28/11 NLRB Fact Check Here
    one gets http://www.nlrb.gov/news-media/fact-check

    Fact Check

    This feature encourages accuracy in the media by correcting common misperceptions and errors of fact when they are brought to our attention. Click here to view the Fact Check Archives.

    Boeing Complaint

    Several news outlets have erroneously reported in recent days that the National Labor Relations Board has ordered the Boeing Company to close its operations in South Carolina. (Examples here and here). In fact, the complaint issued on April 20 by the Acting General Counsel does not seek to have the South Carolina facility closed. It seeks to halt the transfer of a specific piece of production work due to allegations that the transfer was unlawfully motivated. The complaint explicitly states that Boeing may place work where it likes, including at its South Carolina facility, as long as the decision is not made for discriminatory reasons.

    In addition, the Board has not yet considered or ruled on the allegations in the complaint. Under the NLRB’s statute, the General Counsel and the Board are separate and independent, with the General Counsel functioning as prosecutor and the Board functioning as a court. The case is scheduled to be tried before an administrative law judge, acting under the Board’s authority. That decision could then be appealed to the Board itself for its decision.

    Posted 4/26/11


    Having posted the above it does NOT diminish the facts regarding the current ‘packing” of the NLRB board with anti-company, pro union administrators. While there are valid complaints and issues as a result of the continuing politicalization of the NLRB for decades, this NLRB v Boeing should be evaluated/commented on the FACTS as listed.

  8. Well the IAM and NLRB actions have basically put Boeing into a in-house decision re the 737 replacement. If Boeing feels that they want a different site or possibly 2 sites for the new plant, proposals from Washington and locations with the IAM will be handled at an arms length. No negotiations will be made because that will again be used by the IAM to punish Boeing. That does not help to keep this production in our state. Probably go to Texas or Japan

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