A350-1000: We broke the international news that Airbus and Rolls-Royce were going to modify the design of the A350-1000 to increase the range of the airplane. Now, the ever-thorough Flight Global has this story with a fair amount of detail that leaves the two companies little left to announce at the Paris Air Show next week.
A380 orders: When we did the Paris Air Show outlook for affiliate AirInsight, we indicated that Hong Kong Airlines would likely place the order for five A380s that had been expected at the Zhuhai Air Show but failed to materialize. It’s now been confirmed by the airline. Aspire Aviation takes a look at the rationale.
Boeing, the NLRB and the IAM square off today for the first day of what is likely to be a long hearing on the IAM complaint to the National Labor Relations Board that Boeing opened 787 Line 2 in Charleston (SC) in retaliation for the 2008 57-day strike by IAM. The NLRB associate general counsel’s recommendation the the hearing examiner and the board that Boeing shut down Line 2 and place it in Seattle is an impractical, ridiculous suggestion and Boeing, even while acknowledging it is likely to lose at the NLRB, vows to appeal all the way to the US Supreme Court if necessary.
At the same time, the IAM’s suggestion that Boeing guarantee future airplane work in Seattle is impractical and ridiculous, and Boeing certainly was right to reject a “guarantee.” The IAM demanded this in 2009 (as well as Boeing neutrality for unionization efforts at all its plants across the country) as condition to accept a long-term contract revision sought by Boeing to put Line 2 in Everett. It was impractical then, as we opined, and it is impractical now. Business climate issues in Washington State and earthquake potential make it impossible to “guarantee” anything.
We believe both sides are guilty of the ugly atmosphere that led to the 2008 strike. Both sides have made strides to improve relations. But the IAM International office in Washington (DC) has a national agenda that interferes with the true progress of the Local that could be achieved.
We fear this new battle will poison the atmosphere for the 2012 contract negotiations.
One point we take strong issue with on Boeing’s part, begins with this summary from the New York Times article:
Boeing has acknowledged that the fear of labor disruptions factored into its thinking, but it said the main reason for moving the line was South Carolina’s lower production costs. Starting pay at the South Carolina plant is $14 an hour, while starting pay in Washington is $15 an hour, rising to an average of $28 an hour.
This is so much poppycock. At the time, Boeing’s rhetoric was entirely about labor and strikes. Boeing repeatedly told the Washington Governor, the state’s Congressional delegation, the top executive of Snohomish County, the media and the union that the consideration of Line 2 was all about labor and that the state and local governments could do nothing by way of offering economic incentives (as Boeing now assets was the motive in its legal filing in response to the complaint). Production stability was the message.
Whether this crossed the line of retaliation in the legal context is a matter of law we can’t address. But Boeing is taking a legal argument today that is 180 degrees from what it was saying then. We absolutely agree that Boeing needs production stability and in 2008 opined that a five year contract made sense (Boeing and the IAM settled on a four year deal, up one year from the traditional three year contracts). Boeing in 2009 wanted to extend it to 12 years and the IAM offered 10, conditioned as noted above, on impossible demands.
On an investors’ day webcast, Boeing CEO Jim McNerney said he was optimistic next year’s contract negotiations will be successful despite the NLRB complaint. He wants to hit the “restart button,” he says. We hope he’s right. But we fear both sides have once again retreated into their corners.