Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- A350-1000 or 777-9? Part 3 April 25, 2024
- Boeing CEO promises company is turning around…again April 24, 2024
- Solid start for stand-alone GE Aerospace despite cuts to LEAP output April 23, 2024
- SPEEA, Boeing at impasse over safety program, union says April 23, 2024
- Better transparency needed on Boeing’s 1Q earnings call April 22, 2024
IAM won’t release its offer details; IAM v Itself v Boeing
IAM’s offer to Boeing: While IAM 751 released its analysis of the Boeing contract offer of last week, it refuses to release its own offer to Boeing. We asked for it and received a terse, “That’s not available.” Thus, we are left with 751’s analysis that Boeing’s offer is unreasonable and basically unchanged from the one voted upon November 13 (and rejected by a 2-1 margin). But we don’t know how reasonable or not the 751 counter-proposal was, which was rejected by Boeing.
751’s refusal to disclose its counter to Boeing also leaves its own membership in the dark.
Meanwhile, a Chicago Tribune columnist isn’t too enthused about the Boeing “asks.” Chicago, of course, is where Boeing’s corporate headquarters are and Illinois is one of the state’s bidding for the 777X project. As we wrote on December 9, the audacity of Boeing’s asks are mind-boggling. Others are waking up to this fact.
Another analysis notes how little leverage the IAM has right now because this contract negotiation comes well before the current contract expires in 2016, and as a result 751 can’t strike.
But mark our words: if Boeing puts the 777X elsewhere after trying to strong-arm the union (in their view), there will be a retaliatory strike in 2016 regardless of the offers. This happened in 2008 as payback for the 2002 and 2005 contracts and outsourcing that came from them.
The IAM 751 members are going to strike themselves right out of a job. But we have seen the IAM shut down a company rather than give concessions, and call that a victory. (Eastern Airlines, 1991.)
IAM v Itself v Boeing: It’s no surprise that the IAM v itself v Boeing continues to dominate the aerospace news, at least in the US.
The Seattle Times has two stories in its Sunday paper worthy of note:
IAM is between a rock and a hard place (IAM v Boeing)
Two key players in the drama (International v Local)
Separately:
- Reuters has this analysis on Boeing win over Airbus at Air Canada.
For sure IAM is not showing transparency.
But on the other hand it would be a good move if both parties stopped negotiating through the media and start real discussion around a table.;)
So what is the IAM 751 hiding from its own members? Yes, Scott the union is going to strike their members out of a job. They can do that because the union members drink the union Kool-Aid. At this point it doesn’t matter what Boeing offered the IAM 751, nor does it matter what Boeing’s strategy for building the B-777-8/-9 is.
If the union members see what is happening to them, they can decertify the union with a vote, and accept the company’s proposal. But that is not going to happen because any attempt to decertify the union will be met with the strong arm of the union bosses.
Remember Boeing’s RFP wasn’t published by Boeing, either, not even inside Boeing. We only know about Boeing’s outlandish demands thanks to a leak.
So if you’re demanding transparency (rightly so, I might add – I do think that union members should at least get an outline of what the union is putting onto the negotiating table on their behalf), demand it from all parties involved.
Speaking of Kool-Aid – you’re obviously not drinking the unions’, but are you sure your drinks aren’t spiked with another party’s Kool-Aid?
We did ask Boeing and we are still awaiting a response of any kind.
There is only a narrow window of about 90 days ( I think ) before contract end to get signatures and vote to decertify. By that time it will not make sense.
The article about key players reminds me of meeting a top level BA lobbyist- ex asst sec defense at SPEEA early in 2002 re WTO/CVD issues. He fit the role perfectly, shiny shoes/ loafers with tassles, and an attitude. Had red hair. But he made the mistake of trying to snow a bunch of engineers and one in particular who, after reading a 2 page BS handout re tanker- stood up and said .” this is a bunch of garbage . . . ” and proceeded to take the paper and the ex assist sec defense apart verballly but sort of politely. When said ex assist sec d left, he remarked that the next time he would be better prepared.
The ‘ consultant” from IAM international has made such a mess of things, its doubtful that the local will ever recover. It remains a puzzle just what/why/ how Buffenbarger and friend got spooked. strange bedfellows with the Boeing lobbyist ??
They (both Boeing and the union) are doing a great job of f**king us out of our jobs. These negotiations are a joke. Boeing greed on one side, and fragmented union leadership on the other. I have zero faith in either one. At this point I’ll just wait for the layoff and take advantage of the schooling benefits and retrain for something that has nothing to do with aerospace. I’m done.
Since they have agreed to the wage progression, all they have to do is agree on a health and retirement stipend. Assuming the wages and stipend are adjusted yearly for standard inflation. In the simplest scenario, it is one number to agree upon.
Why should the IAM hand over an offer that represented an initial bargaining position?
That Boeing does no bargain in good faith, and instead responds to every proposal with a ‘best and final’ offer, what is the point?
And just how smart would it be for the IAM to
1. bargain in public (this is NEVER DONE EVER)
2. Poison the negotiating waters further by revealing all the negotiating details.
Here’s one question that nobody in the media seems to want an answer from Boeing on:
“Did you really demand the unions endorsement as a condition of the 2nd offer’s acceptability?”
I have not seen any denials by the company on that front. If felt the the offer had merit, it should not need the union’s endorsement. It was a bad offer, and Boeing felt that without it, it would again FAIL. That is the only answer.
It would seem that that is overlooked by everyone demanding a 2nd vote.
As to a retaliatory 2016 strike if 777x is moved? Spot on. There will be nothing to lose then, and it will be quite clear to members that a strike is coming, and they will have nearly three years to prepare for it. It will be long, bitter, and brutal, and occur at a time when production rates are high.
In the meantime, morale and productivity is likely to tank.
Lastly, let’s place the responsibility for a 777x move where it lies, with Boeing. THEY and THEY ALONE get to make that decision. I have yet to see any analysis, ANYWHERE where such a move would constitute good business decision, good for business, profits, or the customer.
If Boeing leaves, it will be out of pure mendacity. Not even it’s rapacious greed and want of profit outstrips it’s hatred of it’s hourly workforce.
This has been an unpaid political announcement.
I find it funny that ONLY the company is greedy.
Bosses with a track record like the 787 should either be sacked, or their obscene earnings reduced to what they are really worth, a pittance. I am sure AB follows that comic opera with interest and hopes these clowns will be stupid enough to move?
I’ll go out on a limb here and make a prediction.
There WILL be a deal.
It will be substantially the same as the second offer. Except:
It will simply kill pension for new hires. Current employees will be unaffected. Boeing will remove it’s requirement for union endorsement, letting the union leadership off the hook, There will be a vote. The offer will pass. Without my vote but it will pass.
That is what is in Boeing’s head right now.
Well thats what they did to SPEEA . . new hires since march only get an ‘ enhanced” 401k.
However this copy of a post by a friend of mine on the IBM message board re pensions and similar might shed a bit of light. ” Beancounter” is well known and it is no secret who she is- She is the COOPER in COOPER V IBM which IBM partially lost on Pension issues to the tune of 30 Million or so…
http://finance.groups.yahoo.com/group/ibmpension/message/80547
I always thought that the only legal thing keeping IBM from implementing a derisking plan was the problem of running into the antidiscrimination rules. (pot get small for employees while pot gets bigger for execs = a legal no-no)
Well, I’m no longer certain the antidiscrimination rules are protecting us. ABC (not our friends) has been working diligently against us. Looks like it is working.
http://www.pionline.com/article/20131213/ONLINE/131219916/irs-issues-testing-relief-for-closed-db-plans#
IRS issues testing relief for closed DB plans, By Hazel BradfordÂ
Corporations that sponsor defined benefit plans closed to new employees got some good news Friday from the Internal Revenue Service, which granted relief from non-discrimination testing rules through 2015.
Defined benefit plan advocates wanted the IRS to allow plans to be considered in compliance if they were at the time of closing. The IRS agreed to the change, but only for 2014 and 2015, and only if benefits were not enhanced for some people but not others. The IRS left the door open for tighter rules in later years by asking for comments on possible new ones.
Washington lobbyists had hoped to get permanent relief from the rules, which were written to apply to ongoing plans. Closed plans came closer to violating the IRS non-discrimination rules as participants’ income grew, and some sponsors were freezing their plans as a precaution, to avoid running afoul of the rules.
“We applaud the Treasury and IRS for getting this out quickly and addressing in a very effective way our concerns,†said Kent Mason, an attorney at law firm Davis Harman, who is outside counsel for the American Benefits Council. “We have a number of questions about the approaches they’ve raised†for the future rules.
+++
BA may be concerned that BCERP will become or maybe already is ‘ top heavy” re older managers/executives under the plan ( in addition to other exec perks-plans ) reaching retirement age…
mendacity ?? mendacity ? I’m shocked- shocked – gambling at ricks ??
http://tinyurl.com/BAMILLSAP2001 pages 73 to 75
About a promise to keep the Tulsa plant open in 1994 IF they got a SAUDI CONTRACT FOR F-15 … of course that was not Boeing it was MDC and John M.
231. The fact finder’s disbelief of the reasons put forward by a defendant “may be quite
persuasive” of intentional discrimination “particularly if disbelief is accompanied by a suspicion
of mendacity.” Reeves. 120 S. Ct. at 2108, quoting St. Mary’s Honor Center v. Hicks. 509 U.S.
502, 511 (1993). Here, Defendant’s mendacity is manifest. Specifically, as identified in the
Findings of Fact, MDC’s mendacity is established by the untruthful and misleading answers
provided to Plaintiffs under oath in its discovery responses, its depositions and in its trial
testimony.
232. The record further reflects a corporate culture of mendacity, as evidenced by the
testimony of plant manager Mr. Bittle and the disregard for the truth evidenced by the testimony
of CEO John McDonnell. As the Court observed during the trial:
We have sat here for two weeks and listened to testimony that I think at some
places is almost knee buckling in the way in which it evidences an abject
disregard for people’s representations, people’s representations to their
employees, their teammates, people’s representations to the public, people’s
representations to public officials. We have other kinds of testimony: Mr. Bittle
himself indicating he believed himself to be an unwitting instrument of fraud on
the employees and the public; I think that the notion of engaging in negotiations
that are known to not to mean to go to anything; and the ultimate question of
closing a plant, recognizing the broad latitude the company has under the law, it’s
entirely appropriate to review the numbers as long as improper numbers are not
considered; but to hear testimony that there was never even consideration as to
whether there were commitments, express or implied, to employees, to the public,
to public officials.
Tr. 1143.
233. The Court finds that the testimony of Defendant’s key witness at trial on the
reasons for the Tulsa plant closing, Project M Team leader Peter Juliano, was clearly untrue, not solely as to tangential issues, but as to the material facts of the case as well. The Court finds that
the evidence establishes the company’s mendacious conduct.
234. The Court further finds that Defendant’s actions evinces a history of mendacity as
seen in the pattern of bad faith conduct in which it participated in the events leading up to the
lawsuit. At trial, Mr. Juliano admitted under oath that MDC sought to short-circuit lease
negotiations and was well aware that his conduct rendered those negotiations to be in bad faith.
The Court adheres to its conclusion at trial:
Sending somebody to negotiate a lease when in fact they can’t negotiate the time
of day, and yet to pretend that you’re negotiating a lease goes beyond bad faith
negotiations, it’s abject dishonesty.
Tr. 116.
235. This was not an isolated incident. The Court also received evidence that Tulsa
plant manager Don Bittle believed himself to be an unwitting instrument of fraud on MDC’s
employees and the public. Mr. Bittle was kept in the dark by Mr. Juliano and other members of
upper management, who never told him that the promise that the employees’ jobs would last for
at least three more years was untrue. Nor did they even inform him that Tulsa was under Project
M scrutiny for closure.
+++
NAW – BA would never do anything like that just to get rid of a union . . .