Sept. 23, 2015, © Leeham Co. The plan to open a 737 Completion Center in China is an opportunity for Boeing Commercial Airplanes (BCA). It’s also an opportunity for Dennis Muilenburg, who was named chief executive officer of The Boeing Co. only last June.
Ray Conner, CEO of BCA, wrote employees in Washington State, where the 747 is assembled, that no jobs will be lost to the Completion Center.
Leadership and members of Boeing’s touch labor under, IAM 751, are understandably skeptical. As noted in yesterday’s post on this, 751 leadership expressed its concern even before Chinese President Xi landed at Paine Field in Everett, where Boeing’s wide-bodies are produced.
During the 10 years Jim McNerney was chairman and CEO of The Boeing Co., he battled the unions, demanding give backs and threatening to move work out of Washington if he didn’t get them. McNerney sent the second 787 assembly line to Charleston (SC) and used threats to put the 737 MAX and 777X lines elsewhere in a blatant game of labor blackmail (which also extended to the State for economic concessions). The blackmail worked.
Still, victory didn’t prevent Boeing from moving jobs out of state even after the largest tax breaks in US history were granted by the State in return for locating the 777X assembly site and wing factory in Everett. The ink was barely dry on the state tax breaks and the IAM 751 labor concession contract when Boeing began shifting engineering and other jobs to non-union locations in other States. The 751 leadership, along with the engineers’ union, SPEEA, cried foul and charged Washington taxpayers had been flimflammed.
Thus, with the 737 Completion Center plan, labor’s paranoia is not wholly without merit.
Now to Muilenburg’s opportunity.
The new CEO, who came from Boeing’s defense side, remains an enigma to BCA employees. While Conner’s letter to the employees obviously recognizes the sensitivities, but the letter might better have come from Muilenburg.
There is no trust left between the unions and management thanks to McNerney’s decade-long war on labor. If Conner’s letter speaks the truth (something the unions remain skeptical of), Muilenburg has the opportunity now to reach out directly, rather than indirectly, to begin repairing the relationship that was fractured by McNerney.
“This isn’t about China as much as it is about Boeing’s on-going transfer of jobs out of Washington state. Our members have paid for that work by giving up our pensions, and our state’s taxpayers have paid for it with $8.7 billion in tax breaks. This illustrates why we need our Legislature to create tax incentive accountability,” said IAM 751 President Jon Holden.
On his first quarterly earnings call, Muilenburg said all the right things about valuing and working with employees. He needs to now follow this up with action.