Nov. 16, 2015, © Leeham Co. Boeing will target “long term liabilities” in its contract negotiations with SPEEA, the engineers union, its president quoted CEO Dennis Muilenburg as telling him in September.
Ryan Rule, president of the local SPEEA union, met for an hour with Muilenburg when he was here for a visit by China’s president Xi Jinping. Rule termed the meeting cordial. He told Leeham News last week that Muilenburg wasn’t specific about the “asks” Boeing will seek in contract negotiations next year, citing only “long term liabilities,” which Rule took to mean health care and pension benefits.
Boeing has aggressively sought to reduce health care and pension costs in recent contract negotiations. SPEEA members who joined Boeing after 2007 have different benefit levels than those before 2007. Rule believes Boeing will seek to revise the terms of benefits for this group. If so, negotiations could be contentious: SPEEA’s most recent contract negotiations, in 2012, also involved Boeing’s request for give-backs.
In November 2013-January 2014, Boeing and the local International Association of Machinists District 751 came to bitter loggerheads over Boeing’s demand for benefits give backs in exchange for siting the 777X Final Assembly Line and wing production in Puget Sound (ultimately, Everett). IAM 751 members rejected the contract revisions on the first go. In a controversial move, the IAM Headquarters forced a second vote right after the Christmas/New Year’s holiday, when many members were still on vacation. The contract revisions were approved by a narrow margin.
Muilenburg hasn’t met with 751 president Jon Holden since becoming CEO last June, Holden told Leeham News last week.
Rule said he hopes management-labor relations will improve under Muilenburg, but the two labor leaders noted that Muilenburg was on the Boeing Executive Committee with former CEO Jim McNerney, whose relations with labor descended into open warfare.
Still, Rule reported that Muilenburg “said all the right things” when he met with him during President Xi’s visit.
The SPEEA contract becomes amendable next September. This will be Muilenburg’s first test as CEO of The Boeing Co. with labor contracts. He previously was CEO of Boeing’s Defense unit, where IAM 837 was the principal union. Much to the chagrin of 751 leadership, 837 voted for givebacks before 751, setting a precedent.
How Muilenburg sets the tone for SPEEA negotiations next year will be closely watched by all the Boeing unions, shareholders, the Board of Directors and Wall Street.