Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
- Boeing 3Q deliveries up despite strike October 8, 2024
- Strike slows Boeing’s march toward improving safety culture October 7, 2024
- Aerospace supply chain still ailing; Sustainable Aviation Fuel isn’t the answer to go green October 4, 2024
- Bjorn’s Corner: New engine development. Part 27. Long developments October 4, 2024
- Longshoreman strike adds to Airbus, Boeing woes October 1, 2024
Boeing makes “Best and Final Offer” to IAM; sets Sept. 27 midnight deadline
Sept. 23, 2024, (c) Leeham News: Boeing issued its Best and Final Offer (BAFO) to its largest union, the IAM 751 a short time ago. The company set midnight Friday as the deadline to accept it.
So far, there has been no comment from the union. The union went on strike at midnight Sept. 12 after rejecting a contract with a 95% vote and went on strike with a 96% vote.
Boeing’s website has additional information.
A retired union member told LNA the members should accept this one, with the restoration of the year-end bonus a key feature.
What a disgrace to the hard workers of the Boeing Puget sound! The union has gone and stabbed us in the back again. This union is a POS and I guarantee the rest of it’s “members” will be donating their dues to a charity instead of paying for Holden’s 4th property. That’s right! His 4th property while the workers shedding blood sweat and tears into making quality planes that boeing wants to sacrifice the safety and that quality for profits $$$ Shame on the union and boeing.
It is not a Union sanction vote They weren’t involved at all in the negotiations of this contract. The union had no idea this was coming out and does not sanction for us to accept it.
The IAM members have completely lost their minds. This is the richest offer I have ever heard of for any union anywhere period. You indignant, miserable pieces of garbage. If anyone in any other place in this country were to get this percentage of increase in the key areas that this offer provides, they would be dancing the happy dance. But not you spoiled delusional jerks, you would rather stick another dagger in the company that has provided you with a very good living while it is in serious trouble. And for those of you that have only been there for a short time you have not paid your dues like the senior members. And you senior members know this is by far the greatest offer you or any other union has ever seen! Accept it and make Boeing Great Again!
You nailed it! Take the offer and get back to work. I will never see that type of increase where I work. You guys need to be great-full for the awesome jobs you have and accept the amazing 30% wage increase
Do you build airplanes? Do you think people building airplanes should make more than people making sandwiches? Because thats what 1/3rd of boeings union employees are currently making. Do you really want to ride in a airplane built by somebody making less that the guy that made your Happy Meal?
The IAM members have completely lost their minds. This is the richest offer I have ever heard of for any union anywhere period. You indignant, miserable pieces of garbage. If anyone in any other place in this country were to get this percentage of increase in the key areas that this offer provides, they would be dancing the happy dance. But not you spoiled delusional jerks, you would rather stick another dagger in the company that has provided you with a very good living while it is in serious trouble.
At first glance those look like substantial improvements
in Boeing’s offer; as always, the devil in in the details.
Love to hear what the IAM rank-and-file think.
Exactly i completely agree, its the unspoken little things that will also impact us all.
Rank-and-file here, that offer’s a joke as well. What did they do, lift a few couch cushions to find it? Dave Calhoun got $33 million last year for NOT doing his job. SMH, this is not the “earn trust and respect” they keep talking about. Their words and their actions don’t align (once again, eyeroll)!
Nope…
It’s funny how they put this in the media first no pressure
The rank and file are prepared to reject this offer by a large margine, again.
This offer still doesn’t address the time to top out and include anymore time off.
They bypassed the union completely with this offer and as such its not even a viable contract to vote on.
The fact that this isn’t a negotiated contract. The union was not involved and you’re right there’s a whole bunch of red lining. Meaningly we lost quite a lot they just show these highlights to make it look like it’s a good contract. But once you read the whole contract you’re reading exactly what’s going on. The union does not recommend that we accept this contract as they were not involved in making it.
Hoping the offer is adequate to the Machinists, and they can get
quickly back to work, BTW.
Offer is garbage and they sidestepped the union. This is slimy nonsense and did nothing but further irritate the machinists.
Thanks.
NO do not accept
What does Boeing do if they don’t accept? I didn’t read anything here or on the Boeing.com link provided.
Chapter 11.
The company can’t survive a daily cash burn of $100M for long.
Even if the company does an equity offering — which would have a hugely dilutive effect on the share price — it still won’t pull BA out of its pit.
I see several articles detailing how the strikers are quite willing to sit this out:
https://www.nwaonline.com/news/2024/sep/21/labor-market-side-jobs-boost-striking-boeing/
“But as workers stare down the embattled manufacturer for better pay and benefits, the 33,000 members of the International Association of Machinists and Aerospace Workers District 751 have the full benefit of a tight labor market and gig economy that provides a quick transition into jobs that require few skills and help make ends meet. That gives the union bargaining leverage, potentially frustrating Boeing’s effort to swiftly end a conflict that’s costing it an estimated $100 million each day.”
Yes, Chapter 11 with a massive re-structure.
Cancel immediately the programs that have no chance of ever making money – Starliner, ‘Air Force One’, maybe others
Abrogate all the Defined Benefits pension plans
Divide into three or four new businesses each with (all?) new C-suite management, putting into them any profitable programs
Offer to sell marginal programs like KC-46A, B-777X & T-7A to the new businesses subject to the new businesses negotiating sustainable sales contracts with purchasers.
Sell or IPO the new businesses.
Burn down the remaining shell in a Chapter 7 bankruptcy
“Cancel immediately the programs that have no chance of ever making money”
That includes most of the current order book, which seems to be devoid of meaningful margin — as evidenced by the continuing lack of EBIT.
Because the union wasn’t involved in it even if we could accept it we have no idea Where and how to vote. It’s just a propaganda thing to make them look better and IAM members bad and greedy. But there is no way to vote on it anyway.
Perhaps this is ok for now, but both sides should read the history of Toyota and all of the factors that led to their 1949 strike, what the demands were, and how they resolved things. Then they should take coownership of Boeing’s books, inviting SPEEA and representatives of the non-unionized workforce to join them.
There is a reason why Toyota went from disaster mode, having to layoff 25% of its workforce, and producing only a few cars a year which were of terrible quality that almost nobody wanted to buy – to the giant they are now that is truly feared by every other car company. Once everyone understand how they did that (hint: it has absolutely nothing to do with this lean nonsense), then dust off Mulally’s “Working Together” principles and read them aloud as a group at the start of each shift.
And for for gosh sakes, show a little humility and admit it when something is a piece of crap or not yet ready to advance to the next station in a process. Travelers should be banned. If something needs to travel, stop the line and fix the problem. And get rid of that awful braggadocio film they show at the beginning of the factory tours in Everett. That nobody is embarrassed by it speaks volumes about the core culture problems.
Then try to deliver just one airplane from an assembly line directly to Flight Test & Delivery that is actually ready to be fueled and start taxi tests – which is something that not a single commercial line has done in over two decades.
Similar attitude and process changes need to be done on the defense side, which should be a little easier now that Ted is gone.
I’m not reading any improvement to the previous (hollow) “commitment” to build the NBA in the Seattle area — so that might still be a showstopper.
Apart from that, it certainly seems to be a far more generous offer than the original one.
Amused by the high-pressure sales technique: “Buy now — sale ends Friday”.
”All other terms of the Tentative Agreement stay the same.”
Right.
So, in effect, the workers will be green-lighting a BA departure from WA to SC if they accept this offer…or, at least, that may be how they see it.
There’s so much they red lined. We lost so much in this contract. The bullets or highlights are in hopes to ignore everything else we lost. Plus the union was not involved and there is no way to vote on it.
They should just yank that ‘797’/NBA [sic] provision out completely, since all it does is muddy the waters (intentionally so?).
Cui bono?
Yeah, well, we’re pretty sure that there’s never going to be an NBA, aren’t we — seeing as there’s no money for it (and probably also not enough engineering talent)?
I think there will not be New Boeing Airplane
in that company’s foreseeable future.
The union wasn’t even asked. This just was thrown out to the media. It has the entire 96% angry. Media is about to look like a fool tonight. They should have known better. Watch them look the fool a second time
Any possibility that Boeing will either go bankrupt or just say The hell with it and go out of business?
I think that’s quite a good question. Depends on what’s really going on, no?
Pure nonsense. The company is too big to fail on a political level. One, we can’t have foreign nations acquiring the company like China or any other communist nations. Lastly, our country the US has a battle for supremacy in aerospace against France, who subsidizes Airbus, therefore,most likely the US government will step in and gladly bail the blue giant, but first they must get the people who build the airplanes back. 😄 🤣
“…France, who subsidizes Airbus…”
A lot less than the $90B in state and federal subsidies, grants and tax breaks that Boeing has received.
What’s Intel’s excuse? Is it also battling against a “subsidized” foreign competitor? Nope.
Time for some serious introspection.
Aside from the variance between the 30% BAFO and 40% union demand for wage increase, what other demands are not being met?
1) Pension restoration
2) NBA in Seattle (beyond the 4 year agreement)
3) Anything else?
As a current striking IAM 751 member I can say this offer is slightly less garbage than the first but still unacceptable after how they screwed us on the extensions. So it’s a definite NO vote from me.
Also why was this not negotiated with the union and the federal mediator? This sounds like desperation and feels illegal. If it is legal then why haven’t we heard anything from the union? Either way I hear nothing but pushback from this disrespectful offer.
Beoing does not care about anything but their precious shareholders. To them we’re just numbers, not people.
We need to stand up and hold the line for as long as it takes to get a fair contract offer. Time for Boeing to make things right with the people building their planes.
@Faust
I appreciate insight from someone on the inside. I am also curious to know whether this had anything to do with your IAM negotiator coming back with a recommendation to approve a contract that basically was unanimously turned down. Is this Boeing trying to bypass what they have concluded as a weak link? It is poor form at the very least.
It does wreak a bit of desperation. This was an attempt to short-circuit the appropriate negotiating process as I can imagine the company is fearful of a deliberate process that will drag out. If it means anything, my sense is that there is a real pressure point between now and when Q3 ratings are released that could very well result in a credit downgrade.
Empty promise building the next airplane here in the north west under this 4 year contract when we all know there’s no plan for a new airplane. EMPTY PROMISES.
Oops
https://x.com/dominicgates/status/1838363748974891261
The union negotiators were bypassed and did not get a chance to respond to this proposal. They seem pretty pissed. They said the members will NOT be voting on this proposal.
So much for Ortberg wanting to reset relations…
But:
a) unless he qualified his reset as “be good friends with the union” or similar then what is happening is a reset; and
b) didn’t he say it was with workers (ie workers, not unions)?
(a) Relations were already poor, and he’s now added insult to injury. Not sure how that qualifies as a “reset”.
(b) Union
“Boeing’s New CEO Wants to ‘Reset’ Relations With Biggest Union”
https://www.bloomberg.com/news/articles/2024-08-16/boeing-s-new-ceo-wants-to-reset-relations-with-biggest-union
Great Job steppin’ in it, Mr. Ortberg.
Any goodwill is now gone..
As I frequently say: What an outfit.
a) I’m not sure how it doesn’t.
b) and this is the article I’m thinking of. I can’t read beyond the intro paras. In those they wrote “he’s “committed to reset” the company’s relationship with workers”. Workers. Not Union(s).
Best & Final offer … HaHaHa. Gonna vote NO on that alone
Bunch of morons if they don’t accept..
And gee the company can’t stand a 100 million dollar burn…yea and what’s gonna happen to all of you…I say let the company, like so many already have, go under and May all of you enjoy what a lot of of us are. The bread line. No money and no job and loss of everything we own.
Good plan.
I believe that Boeing may be willing to put a little more on the table. However, if they are forced to do so, any new aircraft will be manufactured outside of Washington state. I’m not sure that a scorched earth approach is the smartest one in the long run. Compared to what others have gotten recently, this doesn’t look like a bad deal. I would rather get a decent wage for the rest of my working life than an excellent wage for 4 years and then zero. Of course, I don’t really know how this plays out. The company has taken on a lot of debt and could go bankrupt. My understanding is that if they go bankrupt they can tear up any agreement
Due to the debt ratio it is highly unlikely the next plane can be built out of the Everett facility. 1 with 747 program shutdown and the 787 program fully integrated in SC. The next program will have to be built somewhere that won’t cost the company major expenses. Thus they will change the 787 line in Everett to a new 737 line. And the new plane will be built in the ruins of the 747 program since this space inside the factory is not being utilized.
We aren’t voting on this. Here’s what the union said.
Attention IAM 751 Members,
This morning, at 9 AM, Boeing notified us of what they call an “improved best and final offer.” While your Negotiating Team was still reviewing the details, Boeing took it upon itself to disrespect our entire Union by sending this offer directly to all members and the media without any prior communication from your Union. This offer was not negotiated with your Union; it was thrown at us without any discussion.
Let us be absolutely clear: THIS IS A NON-NEGOTIATED OFFER from Boeing. Your Negotiating Committee did not have any discussion or input on this offer. We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready. These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.
Mediation broke down on Wednesday, September 18, 2024, after the company refused to make an offer that addressed the priorities of our membership. This proposal does not go far enough to address your concerns, and Boeing has missed the mark with this proposal. They are trying to drive a wedge between our members and weaken our solidarity with this divisive strategy.
This tactic is a blatant show of disrespect to you – our members – and the bargaining process. Boeing does not get to decide when or if you vote. Boeing has misled the media by wrongfully stating the Union membership is required to vote on their latest offer.
As you see in Boeing’s offer, they made it contingent on ratification by 11:59 PM PT on Friday, September 27, 2024. This does not give us enough time to present details to the membership or even secure all voting locations. It is vital that we negotiate a successful resolution to this strike. We contacted the company to demand they engage in either direct talks or a mediated discussion. The company has refused to meet for further discussion; therefore, we will not be voting on the 27th.
Please look for our survey being created and sent to our members via email for direct input on the company’s offer. We will gather your opinion on whether this offer meets your demands.
Membership input is critical as we make decisions going forward. They have severely underestimated the strength of our unity. This is our fight and our decision to make.
Stay strong. Stay united. Stay focused on what you deserve. You are in control of what happens next.
In Unity,
Your Union Negotiating Committee
Wow. Thanks for that message from the Union. Sure looks like
Boeing is trying ye olde divide and conquer tactic.
Think that outfit’s enduring FOD issues will be going away any time soon?