By Scott Hamilton
Oct. 9, 2024, (c) Leeham News: Contract talks between Boeing and its largest union, the IAM 751, broke off again yesterday after the two sides failed to make progress to reach an agreement.
The strike is four weeks old tomorrow. No new talks are scheduled and there is no end in sight to the strike.
The two sides issued public statements yesterday that make it seem they weren’t even at the same meeting.
Workers maintain the picket line as the strike marches on. Boeing, according to news reports, has met with its bankers. The company is burning through $50m to $150m of cash a day, depending on the analysis by outsiders. (Boeing’s 3Q2024 earnings call is Oct. 23, when the cash burn will become clear.) It entered the strike with $13bn in cash and marketable securities and had a $10bn untapped credit line.
The last strike by the union, in 2008, ran 57 days. It took two years for Boeing to fully recover from that one. Then, its production system was operating smoothly. Today, Boeing struggles to return to the March 12, 2019, rates on the 737 and 787 lines. That was the day before the 737 MAX was grounded for 21 months by global regulators and a year before the COVID-19 pandemic virtually shut down production. on all lines. The Federal Aviation Administration continues to dramatically oversee production. Boeing still has 737s and 787s in inventory that requires major rework before deliveries can be made.
Before the strike, Boeing’s production on the two lines was far below the 2019 levels and well below its recovery plan. Boeing already burned through more than $8bn in cash through the first half of the year. Using the outsider estimates of cash burn during this strike, Boeing is burning through $1.5bn to $4.5bn of cash a month. According to news reports, executives are considering an equity raise of $10bn–but the assumption is that this won’t happen until after the strike is settled. The stock price in pre-market trading today was $151.84, down $2.70 per share after the news of the negotiations last night.
Further (potentially) worsening BA’s predicament: coming Friday (Oct. 11) is the date on which Judge Reed O’Connor in Texas will hold a (final) hearing regarding the question of whether the pending plea deal with the DOJ should be accepted or rejected.
If it’s rejected, BA will face a protracted and expensive jury trial, which will be an utter PR fiasco. In a worst-case scenario, one or more company officers may also have to stand trial as individuals.
Loose-loose process, hope both sides quickly come to their senses..
@ Scott Hamilton
Do we have any information on the demographic breakdown of the striking IAM workers? For example: are they largely/predminantly comprised of relatively new hires in low pay grades?
This is a pertinent question because such “newbies” can easily get a similar-pay job elsewhere (e.g. Target), which thus gives them an incentive to hold out until their demands are met; in the meantime, they’re supplementing their strike allowance by doing gig jobs. In actuality, it’s only really the middle-pay and higher-pay echelons of the striking workers who have something substantial to lose if the company goes belly-up, because they might have difficulty finding similarly-paid jobs elsewhere.
So, which of these groups has a majority?
I don’t have a breakdown. What I can tell you is that in 2009-ish, I did get info that about 5,000 IAM (and Speea) workers were due for retirement within a five year period starting five years from then. (There are 33,000 IAM members.) During the MAX grounding and the COVID pandemic, Boeing offered early retirements to both unions, and laid off others. These were in the thousands, but I never saw a specific breakdown.
One of the issues with quality control today on the assembly lines is that there are so many new hires, there is a learning curve issue for these people to become proficient at their jobs. (This apparently contributed to all the snafus surrounding the door plug on Alaska 1282.) Critical institutional knowledge was lost with all the layoffs and buyouts.
Boeing claims it’s hired 10,000 engineers–all of whom have no institutional knowledge for a new airplane….
More than half the current IAM workforce at Boeing has been with the company less than six years, according to testimony an IAM 751 business rep gave before Congress this summer.
The six-year mark is significant because that is when the Machinists jump from entry-level pay to maximum pay, under the current contract. (This is the “wage progression” issue you sometimes hear about from the union.)
And to Abalone’s point, scores of the strikers are reporting that they’ve been able to find temporary work that pays close to what they had been earning at Boeing before the strike, and in a few cases, more.
https://www.iam751.org/strikejobs/index.htm
Many are working at Amazon as warehouse workers or delivery drivers. Some report they’ve gone back to the jobs they had before they moved to Boeing. ATS — an MRO hub at Paine Field — has hired some.
I think Boeing’s running a real risk of losing a good share of these lower-paid workers with two or three years of experience, which only will complicate efforts to ramp up production after this ends.
The more-senior workers have been saving for this strike for years. The ones I’ve talked to say they can go three months or longer, depending on what kind of part-time work they get. These are the most-motivated strikers — they’ve had 10 years to fume about how their pensions were taken away from them in 2014, and they’re not going to settle.
Bryan:
Very nice summation.
As an assize, 5 years was considered the bench mark for someone to move from basic to what I will loosely call Journey level, ie proficient and able to do the job without superposition (given that an assembly line will always have supervision in the area at least)
Some did it in as little as 3 years. I got a pretty good leg up in 3 years but it was 5 years before I saw repeat issues which always was a plus in that you could sort the problem out a lot quicker.
I always thought it would be good to be able to changeling for a position increase via passing a written and hands on test.
I don’t see Boeing as out of line in general for the increase at 4-5 years, but you are spot on that people will have gained 60-89% at 3 years and those people would be a major loss.
I do have the caveat that its good workers. Union or not there always are some much less concerned than others.
Its a real issue. We’ve seen that in europe with airport workers during corona. Many experienced the grass actually IS greener elsewhere and never looked back. Airports still havent fully recovered from the following labour shortage.
So Boeing actually keeps digging their whole only deeper.
As you say, recent Boeing strategy was to get rid of as many experienced people as possible. That made it especially ironic to hear Calhoun in the Senate hearings blame the quality problems on an inexperienced work force. Calhoun and pals created the inexperienced work force by running off everyone with experience.
Just one of the many reasons that Calhoun was a complete failure and, despite his pathetic claim to the contrary, was fired.
More like under Muilenburg and Smith IMO.
Calhoun was, sort of in his own words, a front-seat spectator collecting director’s fee for ten plus years
I don’t believe that. Calhoun was lead director on the board. He was essentially Muilenberg’s boss. He and McNerny set the direction of returning all free cash flow to the shareholders, cutting R&D, confronting labor and vendors.
I think Muilenberg was just doing what Calhoun and his financialist beancounter pals on the board directed.
Also, Calhoun would never develop a clean sheet plane to compete with the A321XLR, not now, not ever.
Calhoun was in the process of slowly killing Boeing commercial, and he was okay with that.
Calhoun was satan. The man literally said he didn’t for one moment regret the board’s decision not to ground the Max after the Lion Air crash. Imagine telling the Washington Post you didn’t regret a decision that killed 189 people.
Interesting how certified mechanics, machinist, painters, fitters, electricians, inspectors become engineers…. soon PhD’s.
I worked at Boeing from 1986 ~ 2014, with 3.7 yrs “away”, per layoff in 2003. I re-hired into the IAM 751 in 2006, after 16.34 yrs salaried as a direct employee. I retired among the “5000 members, likely to retire within 5 years”; 9/2014, onto an unpaid leave of 1 year, ’til age 55.
What we have here is a time lapse back to when MCD was failing due to a leadership money mindset. When MDC was ready to die, a certain living person played a royal scam to keep the MDC legacy alive… That was a poison pill into the direct rival, Boeing. in 1998, I was in a room with the man who delivered the “pill” , Hatchet Harry…
Now, after 25+ years, the poison has killed off any depth of aerospace mastery under the Boeing sign. Too big to fail, or not, Boeing’s 108 year history is coming to an end now.
What goes around, comes all the way around: now the stock investors will suffer this short-sighted corporate loss of identity.
That earning call on the 23rd should be interesting. If Ortberg really cherishes his credit rating he has a very short window to get this strike settled and issue new equity.
+1
Boeing, union at strike impasse as company halts talks, withdraws pay offer
“The U.S. planemaker withdrew its pay offer to around 33,000 U.S. factory workers, saying the union did not consider its proposals seriously after two days of talks.”
https://www.reuters.com/business/aerospace-defense/boeing-withdraws-pay-offer-after-negotiations-with-striking-union-2024-10-09/
In theory Boeing could devise test both practical and theoretical and those passing the test get employed with the 40% raise, those not will be locking for jobs somewhere else. They can devise new tests for SPEEA engineers when their contract expires and do the same hence upskilling Boeings staff (except the non-union top brass) unless the Board of Directors think it is a good idea and test them as well..
Excerpt of Boeing’s COO, S. Pope yesterday.
“Instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business. Given that position, further negotiations do not make sense at this point.”
Go find the complete e-mail, but this nugget is yet another example of ridiculously stupid management in the C-suite.
Boeing has not been “competitive as a business” for at least the past 4 years and not resolving this labor action, to the point of refusing to negotiate, plainly digs a tremendous hole even deeper.
It is mind boggling.
Indeed.
A pervasive policy of “just ship it” — with attendant crashes, door blow-outs, nacelle overheating, wiring screw-ups, rudder issues, shimming problems, sub-standard materials, uncommanded pitch changes, failed thrust links, and all manner of other gremlins — is not very conducive to a company’s (continued) competitiveness.
Makes one wonder what their true goal is..
Mmm.
I agree, it is very hard to understand what Boeing’s game plan is at this point. They are about to go under and seems to do nothing about it.
Is management just overwhelmed by all the troubles and can’t see a way out if their situation?
Just run it into the ground so there can be a major restructuring?
I think what Pope means is that if labor costs are out of kilter, Boeing cannot compete in the commercial aircraft space because there will not be enough profit margin to support the business. I believe that they are concerned about China entering the space. It’s only a toe in the door now, but they have very low costs and can undercut everyone on price. I have no opinion about what the terms of a settlement should be. I do know that Boeing has not turned a profit for over 5 years. So, I can understand not wanting to have overhead rise beyond what is sustainable. My fear is that when this is over it will be the last generation of aircraft built in Washington State
Direct labor is like no more than 5% of cost, according to an analyst’s est
BDS has been bleeding billions for years … are you going to blame high wages or incompetence at the top??
It’s about 15%. Granted, saving 10% on manufacturing labor won’t make or break the company. But, when you’ve been losing money for several years, you tend to save where you can. I’m not opining on what kind of raise is appropriate here. I’m simply pointing out that the company is trying to stay competitive in the market.
Competition from China is just a convenient excuse for these people in the C-suites. Once the business is healthy again and margins are good, what will they do with the cash? They will spend it on stock buybacks.
Are they in competition with China to see who can buy more their own stock?
Bottom line, the moment these guys have two nickels to rub together it all goes to the shareholders (including themselves). They could care less about the long term future of the company, including what China does.
Duh and raising the cost and salaries will make them more competitive??
Decades of the abuse of it’s touch labor force and now Boeing must pay the piper.
Instead, it reverts to it’s traditional hostile form with a workforce now comprised of people who are less subject to intimidation, with less to lose.
And make no doubt, Boeing WANTED TO GET RID OF IT”S OLDER WORKERS, JUST AS FAST AS IT COULD.
Boeing thought that such younger demographics would favor it.
It thought wrong, and those of us who were bought out, forced out, harassed out, or simply quit made sure to let the newer folks know exactly how Boeing was going to treat them before we left.
It’s been a pleasant surprise to note the resolve of these newer workers. They have so far proven themselves to be tough and smart.
And there are PLENTY left that remember what Boeing (and IAM IP Buffenbarger) did to us in 2014. That is a very visceral wound we have carried for a decade now.
Many remember 2002, when the company negotiating team used post 9/11 layoffs as a wedge, refusing to leave the pool at the Doubletree to negotiate. Or 2008 where the company used fear generated by the global financial crisis to end a strike.
And of course, the 777X as the poison pill in 2014, turning politicians and union bosses alike into jelly and forcing a vote on a historically bad contract.
Boeing has now screwed up. It has a tiger by the tail and no clue how to handle it. Just a dog eared old anti labor playbook is all they have.
From my observation Boeing is playing the usual game. Float an offer and see how much if any movement on the strike commitment.
If I have it right, 80% rejected this one and it was 90 some percent before.
I guess that tells Boeing what they want.
I don’t think its the right way to do this but then I am not and never was an excec.
This is why the IAM isn’t really into allowing Boeing to fish for the bottom via direct dealing. But constantly taking the temperature of the rank and file with surveys, especially talking about the results is equivalent of the IAM selling Boeing what it wants to know.
it takes two to negotiate, what was IAM counteroffer to the last Boeing last offer? “not good enough”?
IAM can keep whining about what they “agreed” to 10 years ago. Or move forward with 30% pay increase instead of their “back to the future” strategy.
30% pay increase for 4 year contract while the rest of the US will get around 12-16%
Airbus is the clear winner in this standoff between Boeing and IAM
It appears Airbus is always the winner in the fight between the two…
There was no counter offer. There was an attempt a direct dealing.
30% doesn’t only not account for ten years of inflation and increased medical even taking into account cola looking backwards, it doesn’t account with the real rate of inflation going forwards.
Airbus became the winner decades ago , when it signed a walkaway lease deal for 50 jets to United, and Boeing talked SPEEA and the IAM out of filing a countervailing duties petition the the state department in 2001.
Was that after the Eastern A300 walk away deal and before the AA 300 walk away deal?
It was the first. I’m sure Scott remembers that deal.
It was Eastern back in the late 70s. AA’s deal was later.
Just reread, do not know if Steve R is referring the A350 deal or the 100 A320 deal from the late 80s. Yeah, Boeing was dumb for being so cocky with United. When Boeing decided the 737 was the 727 replacement instead of developing the 7j7, one could say it was the beginning of the slide.
Well, IAM can keep negotiating with itself about the past or take the 30% pay increase
As for Airbus, competition is good thing for the global airlines. You don’t see the Airbus personnel whining about FALs in China, US and India in the future. They realize they are getting more global market share!
Ultimatums don’t work this time. Boeing has no leverage.
A lot of Airbus market share came about via lax trade enforcement.
But hey, you are free to dump BA and buy Airbus any time you want.
and global airlines will just do that “dump BA and buy Airbus” in the fleet planning
Emirates are adding more A380 routes, they know their not going to get 777x on order
@Pritchard
Emirates also has no other option with those A380s. Their is no Tier 2 market. If they do not fly these aircraft the only other option is salvage.
“A lot of Airbus market share came about via lax trade enforcement.”
Watch it, Team Airbus will come after you.
Fun to watch:
Ryanair asks Boeing to ‘eat’ EU tariffs
The head of Ireland’s Ryanair on Tuesday … said he would ask Boeing to “eat” any counter-tariffs imposed on the U.S. firm by the EU.
@David P
It’s the pension. BA doesn’t want to go back to defined benefit, which it wrestled away from workers.
so clearly the old guard (Pope) are still in charge and pushing their anti-union agenda.
so is the endgame a deliberate Ch 11 Bankruptcy so they get to screw everybody?
Highly unlikely. Many suppliers would be ruined.
do you really think the Boeing board cares about whether or not a supplier, who they have been systematically driving into bankruptcy for 15 years through “partnership for success”, is ruined?
seems like a perfect way to buy them for pennies on the dollar.
+1
Merger
@bilbo:
Pope is not in charge. I don’t know if Ortberg is really in charge.
But this decision and where it goes clearly is at either the Board level or Ortberg level.
Pope regardless of her feelings, follows orders (or quits).
Sometimes you can push a boundary a bit but there are sharp limits.
Pope was clearly who Dave Calhoun wanted to be his successor. Ortberg may well just be a show pony getting paid $25M/year to be the fall guy so Pope can be installed and “save” the company after she has a few more years to establish credibility outside Boeing.
shrug.
If Ortberg had any sense he would have demanded full control.
Clearly Calhoun wanted Pope, so he lost that one and I would not begin to guess on the behind the screen stuff going on.
In a few years Calhoun could be gone completely, or he continues to be corrosive behind the scenes.
Its just a sad situation that did not have to be.
Maybe its all angling for Chapter 11. Boeing keeps it up and they will be over that financial edge. Maybe already are. I am no financial guy clearly. So what the possibilities are ?
Reality is the longer it goes on the fewer strike votes there are as many cannot afford it. So Boeing is playing on that.
They won’t break this strike on a time basis.
And they have absolutely nothing to gain by going ch11.
Ch 11 would wipe out shareholders. It’s a non-starter.
https://leehamnews.com/2024/10/09/boeing-iam-contract-talks-fail-no-new-negotiations-scheduled-no-end-in-sight/#comment-525782
So what?
Lots of companies enter Ch. 11, and the world doesn’t end.
Anyone buying equities should know that there’s a risk of losing part or all of one’s inlay.
Of note: in the recent bailout of Credit Suisse by UBS (in Switzerland), it was the bondholders who got burned, rather than the shareholders.
When ne share issuance is your only path to survival, I’d day ch11 in not a means of living to fight another day.
Yes Abalone, but who has mgmt been trying to appease and protect, all along?
Valid point, but the supply chain is now at a critical phase. Boeing can abuse them like it’s workforce sure. But it’s a dangerous game that bankruptcy only makes a real dead end. As in a cease operations and liquidate end.
Why do that when they can just sell stock and dilute?
I would give them 40% and lay off 60% work force. Why need all of these people if building less tha. 20 airplane a month? After that, hold employees accountable. Lazy, 3 strikes your out. What they get paid, they deserve to work hard and be really certified to build airplanes and pretend to act like they know how to build.
737 relies on rates at or above 60 to be profitable. A lot of aircraft yet to be delivered were sold at prices based on that efficiency. You don’t get there by laying of 60%.
Any issues with Build quality need to be referred to Boeing. Ask them about their quality control system, training system, and overall production system and philosophy.
The people doing the work follow the instructions. if they don’t, they get fired and the Union cannot save them.
But if Boeing ignores it’s own policies and procedures and an employee objects?
HARASSMENT, SUSPENSION, AND TERMINATION AWAIT.
I disagree. I have friends that work there and what they tell me isaned stories. I dont think instructions tell them to leave fod on airplanes, damaging airplanes, sometimes purposely damaging planes just to get their weekend overtime. If they get caught doing drugs or being drunk at home and not get fired, why would they br fired for damaging airplanes?
@Tony
I couldn’t agree with you more. The Union leadership are rank amateurs and tasks like these are best left to the professionals.
If you’re going to screw up at work, you don’t ask for a 40% pay raise over 4 years, going, let’s say – from $25 an hour to $27.50 an hour.
You first ask for and get a $7 million bonus to fix your mistake.
Then you demand and get some $25 million a year, all while staying at home in your boating community.
Then you do nothing for about 4 years and demand some $30 million to leave. But you may have to conjure up a tear or two in front of the cameras.
THAT’S how it’s done.
Rank amateurs, I tell you.
We are building 20 per month because of management mistakes not the workers. Most are far from lazy and have many certifications. Do not let the headlines fool you most are not making close to six figures and if they are they are at top rate and have had nothing but COLA raises since topping out. I think this year I received about .57 and there was a raise that was .08 that was great. Things need to change from top down, we all need to get it together and bring this company back to being world class. I myself am in quality and have to maintain 24 certifications and renew them yearly if I want to keep my position. I take that position seriously and with pride as do many people I know. There are those that need to move on as they bring no value, I hope management will focus on this when we get back to work.
supplier quality has gone downhill and it is no longer possible to build at historical rates. it’s a worsening cycle of lower rates -> lower supplier orders -> less money going to suppliers -> lower supplier margins -> lower quality -> lower rates that started with the COVID shock and inflation. quality issues are not tagged properly and percolate to final assembly, where all of a sudden all these issues are discovered and the plane is delayed.
there are more specific issues i wish i could discuss
Thanks for this comment, Q.
Sept 16, 2024
FT: Boeing cruising towards a mega equity raise
The case against the company is that operational problems will persist despite its insistence better days are just around the corner
https://www.ft.com/content/9b397745-359d-4efe-abc2-c6a573bc576d (paywall)
And while BA flushes itself down the toilet, its competitor thrives:
“Airbus, meanwhile, said it had won 235 new orders in September, including demand from an undisclosed customer for 75 narrowbody jets and 10 wide-body A350s.”
https://finance.yahoo.com/news/airbus-confirms-deliveries-fell-50-155533699.html
—
Any ideas as to who may have ordered 75 NBs + 10 A350s — and wants to keep it under a lid?
Riyadh Air?
Turkish?
United?
China?
Update:
“There are strong indications that this customer is Air India.”
https://www.scramble.nl/civil-news/airbus-september-2024-orders-deliveries
You are talking about things that happen in any workplace. But intentionally sabotaging an aircraft will not inly get you fired it will get you criminally charged. If you get seen, you are going to get turned in. It’s also rare.
If you are suspected of substance use, any manager can escorts you to medical for testing. You will be terminated, but the union can save you ONCE if you get treatment. You will be subject to random testing per the treatment agreement.
But in the end, your cheap hearsay isn’t worth much. It’s just insults directed at a group you have an unrelated issue with.
I did have a case of a guy who would turn one of three boilers off when he did his tour.
Hard to pin down but as I got suspicious I could be the first to follow him after his tour.
I went to management, I can’t prove it but its consist ant and you can not brush those switches accidentally, its deliberate.
He quit eventually though I think he was “encouraged”. We did have two other boilers but it was not unheard of to have multiple failures on older equipment.
It was amazing what management got excited about and took a casual attidute towards. Sabotage goes to the heart and soul of an organization and when there are no checks, phew.
from Reuters article
“They refused to propose any wage increases, vacation/sick leave accrual, progression, ratification bonus, or the 401k Match/SCRC Contribution. They also would not reinstate the defined benefit pension,” it said.
The union, which represents factory workers on the west coast, wants a 40% pay rise over four years and the restoration of a defined-benefit pension that was taken away in the contract a decade ago.”
IAM members can get ready to write their personal checks for November healthcare! This strike will last into the new year!
Boeing, whi is self insured, has always paid medical costs retroactively to settle all strikes. In exchange, the union traditionally drops all unfair labor practice charges with the NLRB.
But as of today, IAM members don’t have medical coverage unless they pay for it
You have 3 months to pick up COBRA, so you see if you can eek through fine, if not you can avoid catastrophe, don’t ask me how I know.
They don’t need cobra. The have apple care available much cheaper.
And for those with zero income there is heavily subsidized medical care in Washington.
And don’t make the mistake that nobody prepared for or considered this.
You impress me as someone trying frighten the strikers back to work.
I could care less when the IAM strikers decide to go back to work. They are just making the situation worse for themselves, other Boeing employees and Boeing. To snub a 30% pay raise, nobody is feeling bad for them
Airbus is gaining more market share everyday. The real fallout from the strike will come when major Boeing customers switch to Airbus in the future
When I hired in, the company could work you 27 straight 12 hour days.
When retired in 2020 it was 19, with a quarterly limit.
Don’t tell me strikes make things worse.
@David
Absolutely. The nerve of the union to ask for a 40% raise over 4 years. What’s next? Asking for a $7 million bonus to fix a mistake that you created in the first place?
If I were Boeing management, I’d pay the union ransom to get this thing settled and then have a plan in place to get all of my production the heck away from the Pacific Northwest as quickly as possible.
At this point, you are probably right with that strategy. The global airlines want stability at Boeing to ensure aircraft deliveries and having a rouge IAM district leadership, this problem will never go away. Split the difference, pay 40% pay increase and not switch 401k to defined pension plan.
to start with in the next 2 years:
Move the second 737 FAL from Everett to SC
Move the new 737 wing riveter line from Renton to SC
Folks can rehash this nonsense over and over again. The combinations of these mental coping mechanisms is endless. But they are based in anger at a class of persons they don’t like, not reality.
not really, Boeing can’t afford to built aircraft in Seattle anymore Its that simple!
Seattle is “perfect storm” for mfg commercial aircraft…highest wages, lower automation and less productivity
Last I heard, 787 still hasn’t turned a total program profit.
Stop grasping. We know what you are on about ok?
That’s not going to get it done. The sticking point is that in the first contract offer from Boeing was a lucrative 401k managed by the IAM to the tune of $130 Million annually. I suspect that golden goose was offered in exchange for an enthusiastic recommendation from the IAM for a YES vote. The second “best and final offer” from Boeing reinstated the AAMP bonus and clawed back the 401k scheme that would have given the IAM generational control over a multi-billion dollar asset. I don’t think Boeing will ever offer up such a carrot ever again. I think the IAM knows that and they are digging in. Tragically they are fighting a fight I believe they will not win and we (I am a Boeing Machinist) will suffer for it.
Well, if you want to stop production for a dozen years an try to raise a hundred billion in new capitol to start from scratch it’s a great idea.
“raise a hundred billion (Boeing and risk sharing partners) in new capital” for a new aircraft launch and have multiple FAL, wing centers and fuselage production in SC and Southeast Asia
Probably the long-term plan. BMW’s most profitable plant and largest is in SC and is non union.
“non union” doesn’t mean the workers are underpaid without health insurance. BMW knows how valuable long term skilled workers are and that this pays off in the long run.
Agreed look at Delta Airlines.
There was a comment on another story stating the quality of work coming out of SC was a reflection of the work force. If the workers quality were so lax BMW’s most profitable plant would not be there.
BDS is also bleeding $$$ for years while other large military contractors are making $$$ hand over fist!
william, what’s your explanation? Incompetence at the top??
Maybe BMW was more selective in what it hired
and/or in the training that it provided
and/or in the benefits package that it offered.
We know for a fact that BA is hiring ex-KFC, paying them $21 per hour, not training them properly, and pressuring them to “just ship it”.
“Trade wars are good, trade wars are easy to win”
Oops
NYTimes
Trump’s Trade War May Create New Auto Jobs. In China
Goodbye, all these talk of being “the most profitable” plant.
It was profitable because it happened to produce high margin large SUVs, but these last century ICEV are now replaced by vehicles of next-generation technology.
I agree.
But Boeing hasn’t had a good production plan in a very long time.
Does your fantasy include losing all government contracts?
It should.
Commercial aircraft is not government contract BTW, does Boeing make money their government contracts?
Though DOD does not want more contraction in its supplier’s ranks, I expect the Defense to be put up for sale if it does not turn around financially. The worker could care less if Lockheed Martin or Northrop’s name is on the check.
Chapter 11 Bankruptcy is the end game! They get to shed roughly $50bln of debt., get a court ordered labor contract imposed/mandated and shed the $8bln in pension obligations. Ask me how I know; I worked for 2 major steel producers whom did the same. The only difference here is Boeing is “too big to fail” considering 1 in 10 American jobs are tied to Boeing, the American taxpayer will end up bailing them out. They will get their cake and eat it too; the financial gains far outweigh the short term credit rating loss. Best of all, they will get to blame the working class as “the straw that broke the camels back”. Some of this is satirical but at some point I am quite certain they have or are considering these scenarios as real possibilities.
I think perhaps you are just trying to induce a panic. Every time Boeing has labor issues we hear the exact same boilerplate.
Sane people can see right through it. Why it’s being done, and who’s responsible.
“Chapter 11 Bankruptcy is the end game”
Value of almost $100 billion shareholders value goes up in smoke? No way! What about executives who enjoy golden parachutes? Are they going to be sent out the door (like the hole left in the Alaska 737-9 after the plug blew off)?
https://www.usnews.com/news/top-news/articles/2024-10-08/us-faa-issues-safety-alert-over-boeing-737-rudder-issue
The kc46 is 767 based. The p-8 and wedgetail are 737 800 based. All the air force and navy executive transports are 737s. An politicians will not allow BA to offshore that many jobs. They will hold the rest of the government contracts hostage.
South Carolina is not offshoring ….note 40% of all commercial aircraft deliveries in the next 20 years is in Southeast Asia (per Boeing)
Funny, Charleston started out about off shoring and a good percentage of the 787 is not built in the US.
Alenia and a joint assembly plant anyone?
A lot of the 767 is made in Japan. So pull enough smoke and mirrors and its all good.
The MAX Door Plug came from Asia.
Trans
get your timeline right for the 787 Alenia subcontract was done before any thoughts of relocation to SC
as for Japan and 767, that goes back to the late 1970’s nothing new here
Trans
Get your facts right.
The bolts for the door plug were missing because of out of sequence work at Renton!!!
The bolts for the door plug were missing because someone didn’t replace them. While it wasn’t helpful to have work out of sequence, it still comes down to someone not doing their job. And, of course, nobody can find the records on who did the work. Funny how these things go.
It comes down to the absence of a properly designed and functioning computer system to track what work has and hasn’t been done on a frame.
We got a detailed description of this mess from a Boeing whistleblower here on LNA just days after the door blowout.
Who’s responsible for that system? That’s right — management.
While those of us not involved are forced on rolling furloughs, with layoffs sure to follow. The rest of us suffer for it. Finding it hard to find empathy….thanks guys….
No empathy required. Boeing’s decisions are theirs alone. If they have decided to take hostages, that’s on them, not hand laborers.
Members of SPEEA should accept BA’s first offer, no need to bargain.
It Doesn’t Take A Rocket (Aerospace) Scientist” to figure out the impasse between Boeing and the IAM. The IAM promoted and recommended a “Yes” vote on the “Historic” “Best” contract the union ever negotiated. Then, when the members rejected that offer the IAM suddenly became the militant cheerleaders rooting for the machinists team. Ask yourself, what happened between the first offer and the second “best and final offer” ? The one that the IAM refused to bring to a vote. The Delta between the two offers is that strategically inserted in the initial offer, the IAM would have generational control of an investment portfolio that would exceed $1BILLION US Dollars within 5-7 years. After the first proposal which was agreed to by both the IAM and Boeing only to be rejected by the members. The “best and final” offer Boeing tendered was an improved offer for the workers but did not have that golden goose for the IAM. The IAM cried foul and would not allow the members to vote on this generous latest offer. Boeing has now rescinded that offer and with good reason. The IAM is not bargaining in good faith. I would suspect that Boeing was willing to offer up that golden goose initially in an effort to avoid a costly strike at a time when they could ill afford one. The IAM has failed to prevent the strike and now has flip flopped decrying the offer as an “insult” to collective bargaining. In reality, the refusal to allow a vote is an insult to Boeing Machinists. It is an insult to Boeing workers across the board. It is an insult to the contractors, suppliers and neighbors that are suffering financially from a power hungry politically motivated AFL/CIO affiliated Union that is motivated by financial enrichment and political power rather than representation of the American Aerospace Worker. But hey, that’s just the opinion of a dumb aircraft mechanic, because it definitely doesn’t take a rocket scientist to figure this one out.
That’s the most interesting observation I’ve heard in a while and it rings true. The same people who said one offer was a good deal turned down what was a better offer and wouldn’t even allow a vote on it. How else do you explain this? This thing needs to get resolved right away and I don’t know that the last offer wasn’t the right one. Defined benefit plan isn’t coming back because it’s a dinosaur so people can stop talking about it
Agree, 100%
If IAM is not bargaining in good faith you’d bet the moment that Boeing could substantiate anything they’d have their billion dollar lawyers file something with the NLRB. They haven’t. If you’re in Puget Sound, any union steward would be happy to relay to you why both offers really suck and how Boeing is just teetering on unethical bargaining practices, and leave your conspiracy theories at home, or at least suspended for a moment. At the least, your claim about IAM colluding with Boeing to make gains on 401k fund managment is false. The Machinist 401K plan wasn’t going to pay anybody at IAM anything. Putting someone at IAM on a board for the fund just means that IAM (likely someone your IAM board either appoints or the members elect) would have a say in what the 401K offers investments in, have a say in reviewing and making sure it gets funded and what fees are levied on participants, plus any plan changes. That being said it was like adding a 2nd 401K (except fees to manage it aren’t paid like the Fidelity 401K is), and Boeing hoping the IAM membership would be stupid enough to think it was a pension with how it was named.
And I quote: “’it’s been 16 years that our Members have waited for the opportunity to bargain the full contract at expiration. On March 8, 2024, IAM District 751 and W24 passed a comprehensive proposal to the company, and our journey officially began. Today, we offer a summary and a recommendation of the proposed agreement.
This contract proposal represents never before seen improvements in wages, job security, retirement, health care, overtime language, progression, and quality and safety. The proposal summarized on these pages represents a snapshot of the priorities of our Members. It represents the principles of what our Union Brothers and Sisters were willing to fight for, now and in the future.
We are the lifeblood of this company. Never forget that there is no Boeing without the IAM.We unanimously recommend you vote to accept this proposal. If approved, the proposed four-year contract would be in effect upon ratification through September 7, 2028.”
There is a reason for the unions prior exuberant support of the first offer and their running away from the second one like a scalded dog.
You need to review LOU48 and what the MRSP is / does
Exactly.
They filled with the NRLB today, so there you go.
@Tim
The Union is making a critical error here by not hiring Dave Calhoun away from Boeing, as its lead negotiator.
If Dave was sitting at the table on the side of labor, the 18 year old high school dropout, with 6 months at the company, working at the parking lot booth – would be making $250k a year (with full benefits).
Starting.
After running a few people over with the golf cart, he would be allowed to work from home, with a camera installed in the booth for him. His salary would also double, at that time.
Nobody can craft a deal like Dave…
@Tim
The negotiators are people…flawed like we all are. They were horribly disconnected from their membership on the contract vote and they were humuliated by the vote. As a result of that they have been recalibrated about what the real demands are. Boeing did an end run around the new union posture and it blew up in their face.
This is all one big game of chicken. Boeing is making a calculated bet that if they hold out for a sufficient amount of time the union will accept the prevailing offer. They are banking on a pain threshold for the union.
This will not end well for Boeing. They are burning cash and nobody will issue them new debt or buy their stock while this bonfire is burning in the background.
memo to IAM members, today you are on strike (aka quit), you have no paycheck, no healthcare, can’t collect unemployment, no offer from Boeing on the table, no new aircraft production guarantee from Boeing on the table and no contract
One month into the negotiations and you have nothing to show for it Might be time to change local IAM district executives to clean up the mess Or just order a few more cords of wood for strike barrels
@Pritchard
It is rare that any side truly wins during a strike once all of the costs are factored.
Realistically this company is floundering under the weight of previous management. The union could accept the latest offer and Boeing will still be unable to climb out. This ends with Boeing issuing new equity since it is now locked out of the debt market. That shareholder dilution is what needs to happen.
I am somewhat surprised there has not been activist shareholders demanding a new board.
Tim old darling, that is quite the emotionalized rationalization.
Boeing, as a condition of the first offer REQUIRED the IAM leadership to recommend it.
There is a long history of this at 751, Bill Johnson, Mark Blondin, and Tom Wroblewski ALL having brought back rejected 1st offers with either a recommendation, or none at all.
It was Boeing’s dumb idea to engage in direct dealing with the second offer. Rather than put that offer to a vote and risk another 2014 disaster, they chose the obvious path to just continue the strike, a decision backed by a member survey.
Now, if if the IAM was not bargaining in good faith, that Boeing itself would file a ULP complaint with the NLRB?
I suggest you check your emotions and think things over coldly, and rationally.
And yet, you did not address the elephant in the room. The delta between first and second offer. Fact: in the second offer the reinstated annual bonus replaced the IAM managed 401K. Fact: The IAM enthusiastically recommended yes vote on the first offer. You sir make the mistake of assuming my criticism concerning bad faith is between the IAM and Boeing. The IAM’s bad faith is between the union leadership and the members. Boeing logically would not want to give the union control over an annual $130 Million asset. Boeing expected “something” in return. That something was a yes vote on the first offer, to avoid a strike Boeing could not afford. The IAM did not come through on that deal and Boeing no longer feels compelled to give them such a rich reward considering their lack of performance. Again, just some dumb old aircraft mechanics opinion but this is not rocket science. Pretty clear to me.
Tha AMPP bonus was hot garbage. Boeing controlled and presented the key metrics that determine payouts. Every year there would be a fight over the accuracy of those metrics. The program was introduced unilaterally by boeing prior to the 2014 contract, and only achieved maximum payout before that contract, and never since that I can remember.
The IAM 401k was a complete surprise to the rank and file. Nobody asked for it, nobody wanted it. Just like the multiple times the IAM solicited it’s own pension plan over the years.
Signs of a changing aviation landscape:
“Chinese aircraft maker COMAC in talks with Brazilian airline”
“Talks between Total and COMAC have included the possibility of financing from the China Development Bank for 80% of the total value in up to 10 or 12 years, Almada said, adding that each C919 had a list price of about $90 million.”
https://macaonews.org/news/lusofonia/comac-total-linhas-aereas-c919/
COMAC is offering C919 slots as early as March 2025 — whereas the earliest slots at BA / AB are 2028.
Note the attractive $90M list price.
Also note that Brazil seemingly doesn’t give a hoot about the lack of FAA cert.
And the article discusses reciprocity for Embraer from China.
Easy for COMAC to set up a parts/service center in Brazil, to serve all of South and Central America.
As usual, the devil is in the details:
‘Total Linhas Aereas has been in talks with COMAC for months and the airline’s controlling partner Paulo Almada is set to visit the Shanghai-based company this month to discuss a potential order of as many as four C919 planes. Brazilian Senator Rogerio Carvalho of the ruling Workers Party, who took part in meetings with Total, described the potential deal as a “milestone” for Brazil. He told Reuters that Brazil would expect reciprocity for Brazilian plane manufacturer Embraer, which is keen to sell in China.’
‘While the potential move into the Brazilian market is a critical step in COMAC’s international expansion, it is not without its concerns. As PA Consulting Aviation Partner Carlos Ozores told Reuters, the C919’s “unproven reliability record and lack of support network in Brazil make it a very risky choice” for Total.’
March 2025, huh? So in 5 months, they’ll get an aircraft, right? Does that seem reasonable to you? These aren’t Boeing aircraft, sitting in an inventory pile.
The first C919 was delivered in 2022. We’re a few months away from 2025. Since 2022 they’ve delivered a grand total of 10 aircraft.
10.
I’m not saying it won’t happen, one day – but 5 months for a new order, after having been able to only get 10 out the door since 2022, is kinda….optimistic.
Who says COMAC won’t reshuffle some domestic orders so as to give this foreign order priority?
And who says that the rate won’t pick up dramatically when the Chinese CJ-1000A turbofan becomes an alternative to the CFM LEAP 1-C?
As regards the “unproven reliability record and lack of support network”, ask Eastern Airlines how that worked out when they took a chance on the A300.
The winds of change are blowing.
Frank
I heard WN is still waiting for their 737-7, since 2021, even though they have paid millions after millions of PDP? Tell me it ain’t true.
Not true, sir.
‘Entry into service with launch operator Southwest Airlines was originally expected in January 2019, however, it has been repeatedly delayed.’
https://www.flightglobal.com/news/articles/boeing-starts-building-first-737-max-7-441830/
Yeah there’re the twin crashes and the pandemic.
As reported back in December 2021:
“Boeing had earlier indicated the plane would be certified by mid-2021, [Southwest COO] Van de Ven said.”
One needs to remember the past linkages with Brazil and China with Embraer ERJ 145 project at Harbin
“Talks between Total and COMAC have included the possibility of financing from the China Development Bank for 80% of the total value in up to 10 or 12 years” This is how China will be selling their aircraft to emerging regions including Africa
Don’t forget the aggressive growth of BRICS. A potentially serious issues surfaces to impact the further de-dollarization project.
“The @nytimes has an important story about how @Boeing withheld known safety info about the 737 MAX crashes from @flyethiopian , which ask for a safety briefing.
https://x.com/LeehamNews/status/1844014587806630082
NYTimes:
Months Before Ethiopian Crash, Boeing Turned Aside Carrier’s Questions
https://t.co/fGT8WNCrfC
Yes, I saw that yesterday.
Inconvenient timing — coming as it does just before tomorrow’s Texas hearing on the BA plea deal.
Does stonewalling qualify as a form of Jedi mind tricking?
“The Ethiopian carrier also flew the 737 Max, and the chief pilot wanted more information from Boeing about the emergency procedures to follow if the same problem that doomed the Lion Air flight should recur. At the time, Boeing was providing detailed briefings to pilots in the United States who were asking the same types of questions about how to respond. But Boeing chose not to answer the Ethiopian pilot’s questions beyond referring him to a public document it had already issued after the Lion Air crash.
Boeing said in its response that it was prohibited from giving additional information because it was providing technical support to Indonesian authorities investigating that crash.”
“Congress Urges Boeing & IAM To “Return To The Bargaining Table In Good Faith””
“26 United States House Democrats have signed a letter that has urged Boeing and the two International Association of Machinists and Aerospace Workers (IAM) lodges, namely District Lodge 751 and District W24, to return to negotiations and resolve the strike”
“The letter, shared by Reuters’ David Shepardson on X, formerly known as Twitter, and signed by 26 House Democrats, including Pramila Jayapal, a US Representative from Washington, “respectfully” urged the company and the two unions to bargain in good faith to agree on a contract in a timely manner.”
https://simpleflying.com/congress-urges-boeing-iam-return-barganing-table-good-faith/
“I had a wide-ranging conversation with @IAM751 president Jon Holden that touches on everything from wages, pensions and equity raises to bankruptcy, the relationship with Boeing’s new CEO, and what went on behind closed doors before talks collapsed again.”
https://x.com/jonostrower/status/1844278266200526890
‘“Who are they to say what is worthy of negotiation or not right? That is our job…to bargain things that our members tell us are important,” said Jon Holden, president of IAM District 751 in a wide-ranging Wednesday interview with The Air Current that underscored the extreme distance from any resolution. “What we’re proposing is things our members told us were important, things that would raise the standard that our members deserve.”
https://theaircurrent.com/aircraft-production/boeing-strike-an-interview-with-iam-751-president-jon-holden/
““What we’re proposing is things our members told us were important, things that would raise the standard that our members deserve.””
note to IAM members, the IAM President is now blaming you! Maybe someone should be an adult in the room and inform the IAM members the defined pension plan is not coming back and 30% increase is twice the amount the average American will be getting for raises in the next 4 years.
@Pritchard
The IAM president ulitmately is only going to advise its members. They need to take the journey to see if the strike is worth it.
Yes the union has leverage…but its over a very sick company. Be wary of Pyrrich victories.
Hey guys and gals take a look at BA stock. Something happened since yesterday.
Yeah, it is dropping now, as it should.
Delta Q3 revenue miss
A United Boeing 787 with 176 people on board had to divert after the pilot’s screens went blank over remote northern Canada
‘According to a Transportation Safety Board of Canada report, while over Hudson Bay, the “captain’s primary flight display and navigation display failed to a blank display.”
Both flight management computers also entered “a degraded mode with limited capabilities.”
The TSBC’s report added that this meant the plane was left without lateral navigation or LNAV — an autopilot mode that involves following a programmed flight path.
https://www.msn.com/en-us/travel/news/a-united-boeing-787-with-176-people-on-board-had-to-divert-after-the-pilot-s-screens-went-blank-over-remote-northern-canada/ar-AA1s1y0Y
Bloomberg: Boeing Would Be Biggest-Ever US ‘Fallen Angel’ If Cut to Junk
“If cut to junk status, Boeing Co. will be the biggest US corporate borrower to ever be stripped of its investment-grade ratings, flooding the high-yield bond market with a record volume of new bonds to absorb.”
https://finance.yahoo.com/news/boeing-biggest-ever-us-fallen-172444217.html
““Downgrades to junk from two of Boeing’s three major credit graders would leave much of its $52 billion of outstanding long-term debt ineligible for inclusion in investment-grade indexes. If that happens, Boeing would become the biggest ever fallen angel — industry parlance for a company that’s lost its investment-grade ratings — by index-eligible debt, according to JPMorgan Chase & Co. analysts.””
““I would expect a fair amount of index-related selling as the debt changes hands between the investment-grade and high-yield markets,” said Scott Kimball, chief investment officer at Loop Capital Asset Management. “It wouldn’t surprise me if things got ugly as high-yield investors aren’t as beholden to benchmarks, generally.”
“Since active high-yield managers are not going be “forced buyers,” they will have a greater degree of price-setting power, according to Kimball.
““The liquidity transfer costs are real,” he said. “High-yield buyers, being less index-focused, are the ones setting the price. It’s the opposite of upgrades where passive money is more prevalent.”
Wells Fargo expects Boeing to sell up to to $15 billion in new stock to cover for workers’ strike losses
“Wells Fargo predicts Boeing will sell between $10 billion and $15 billion in new stock to account for lost earnings, according to an analyst note dated Oct. 9. Boeing previously targeted $10 billion in working cash on its balance sheet, and Wells Fargo estimates cash dropped to roughly $8 billion at the end of the third quarter.”
https://au.finance.yahoo.com/news/wells-fargo-expects-boeing-sell-182033335.html
@Pedro
Pennywise and pound foolish. You will blow $15B on a strike and simply agreeing to the 40% would cost how much?
The earnings in 2 weeks will be a bloodbath
+1
I wonder what Boeing could have done with that $15B…maybe launch a proper replacement for their Max program?
I still can’t get over the fact that Mister Calhoun was paid $33,000.000 in 2023 for… running Boeing right into the ground. “Heckuva job, Dave!”
This should be interesting:
“Boeing Turns Over 737 Max Safety Records to End Investor Probe”
“Boeing Co. has turned over a tranche of corporate records to end preliminary legal action by pension funds eyeing shareholder litigation over its 737 Max jetliner’s safety woes.
“Two Ohio public employee retirement systems dropped their Delaware lawsuit demanding internal documents from the aerospace giant, saying the company had “substantially completed” the disclosures they sought. The suit invoked a law that gives investors broad access to corporate files if they have credible but preliminary suspicions of wrongdoing by board members or executives”
https://news.bloomberglaw.com/esg/boeing-turns-over-737-max-safety-records-to-end-investor-probe
Airbus faces pressure over supplies from Spirit Aero, sources say
“The sources, who were not authorised to speak publicly about the matter, cited concerns over the production of fuselage parts built in Spirit’s Kinston plant in North Carolina. Separately, Airbus has intervened to speed up the supply of wings for the smaller A220 by airlifting parts from the supplier’s factory in Belfast, Northern Ireland, they said.”
‘An industry source familiar with the matter said recent problems include production of composite stringer clips that are used to attach supporting parts. Buccino said this activity had “not impacted deliveries to Airbus’ final production line”.’
“In the latest sign of stress to supply chains, reports have emerged of rare movements of one of the world’s largest cargo planes, an Antonov An-124, which sources said had been used to ferry wings for the A220 by air rather than sea.”
https://ca.finance.yahoo.com/news/airbus-faces-pressure-over-supplies-212303448.html
Sept 30
https://ca.finance.yahoo.com/news/boeing-suppliers-fear-long-term-100434581.html
Sept 25
https://www.ocregister.com/2024/09/25/boeing-strike-squeezes-california-aerospace-suppliers-including-independent-forge-in-orange/
While IAM district executives can’t let go of ghosts from past contracts and have nothing to show for their efforts after one month of negotiations
Airbus is busily taking away your work
“Airbus said late on Wednesday an unnamed customer had placed an order for 75 A320-family jets and 10 long-haul A350s – a deal worth $6.3 billion after typical discounts, according to Cirium Ascend data. Airlines frequently keep their names under wraps to avoid revealing their fleet strategies to competitors.
Three industry sources said that Air India was the airline behind the order”
Well, if you look at all the bad Boeing press that has emerged since Air India’s big BA order in summer 2023, it’s not really surprising that the airline has gone back to Airbus — though various media outlets are reporting that the airline is “in talks” with Boeing for a potential top-up order.
Related: was the LOI between Korean and BA from this summer’s Farnborough airshow ever turned into an actual order? Nope.
And a potential Turkish order from BA has been stalled for months on engine pricing issues (or so we’re told).
Interestingly, the A350F will soon be rolling off the line — one can follow its progress on Planespotters.
And Emirates will be getting its first A350 any day now — with a whole bunch more following it on the line.
You blame IAM leadership for having nothing to show for after a month, but Boeing’s negotiating team is equally culpable? An impasse is… an impasse. It’s a mutual disagreement.
You blame the impasse on the IMA district representatives when the membership voted 96% to strike. Huh?
Seems the IMA officials can agree to whatever they want but the membership is likely to reject it.
John
It’s called leadership…something the IAM local district doesn’t have. The rally in the alley mentality is no longer a valid strategy.
The sticking point could be the defined benefit pensions. The union might have to give this up in exchange for larger 401k contributions, but not sure the union is ready to swallow that pill.
Worth mentioning that Boeing executive management has long been irrationally confrontational. They have gone to war against labor, suppliers, basically every stakeholder other than the shareholders. Their top priority is not maximizing profit, it is minimizing costs, and they have been willing to shoot themselves in the foot to achieve this. They seem to have an irrational philosophical bias in favor of confrontation over peaceful coexistence.
“Airbus exec sees no Boeing strike impact but frets over CFM, Spirit”
—
“”CFM is a bottleneck,” Scherer told a briefing hosted by French aerospace journalists’ association AJPAE.
“Airbus lowered industrial targets and issued a profit warning in July, citing a shortfall in supplies of engines from CFM, co-owned by GE Aerospace and France’s Safran, as well as shortages of parts from other suppliers.”
—
“Scherer also singled out production problems at Spirit AeroSystems.
“Production rates at the U.S. aerostructures supplier are “not exactly where we would like,” Scherer said, adding that Airbus had sent dozens of workers to key Spirit factories to help stabilise the situation.
“Reuters reported on Thursday that Airbus was facing concerns over production of key structural parts for A350 and A220 jets by Spirit AeroSystems, and had taken measures including deploying staff to affected plants and air-freighting parts.
“Spirit said it was delivering according to Airbus’ schedule and that Airbus staff were part of an existing joint improvement program, and did not indicate new or urgent production issues.”
https://finance.yahoo.com/news/airbus-exec-sees-no-boeing-085655642.html
And from the same link:
“Scherer hinted at increased production of the A330neo. Production of the upgraded model is running at about four a month but will not necessarily stay at that level, he said.
“A possible stretched version of the A220 remains on the table, he said, in answer to a query about plans that have long been mooted to add capacity to the Canadian-designed model. Industry sources say engine makers are sceptical about the plan, which could cannibalise sales of best-selling larger models.”
—
If CFM is a bottleneck for AB, it’s probably a blockage for COMAC.
@Abalone
Comac is a funny business…you have to wonder not only where the Tier 1 supplier are coming from but the Tier 2 as well.
Even if they are supplying their own engines, are they hitting the world’s known forging and casting houses? To truly stand on their own they need an entirely firewalled ecosystem of production capacity. I don’t know if many people realize it is more than setting up a new FAL and calling it a day.
China is the world’s factory: if we can manufacture stuff, they can do it just as well, if not better.
They’ve shown that with their domestic semiconductor manufacturing industry — which is now more advanced than that in any western country.
Their nuclear and marine industries are other examples.
They keep pulling surprises out of multiple hats.
+1
The West is in total denial about China’s capabilities.
“Higher take-off weight A321XLR secures European certification”
“Airbus’s higher-weight A321XLR has been approved by European regulators, three months after the basic model secured certification.”
https://www.flightglobal.com/air-transport/higher-take-off-weight-a321xlr-secures-european-certification/160272.article
Any airlines order the 97t XLR?
Separately
The Final Countdown to A321XLR Customer Handovers
https://www.airbus.com/en/newsroom/stories/2024-09-the-final-countdown-to-a321xlr-customer-handovers
That didn’t take long, did it? I think the A321XLR will do very well.
If, as expected, BA wants to settle the labor dispute before Oct 23, there’s little time left, this weekend is key. If there’s no meeting scheduled, then how can the strike end by Oct 23?
@Pedro
In reality they might have another week. And any agreement on the 18th would still need to have a vote that could just squeak in under the 23rd.
Last time, IAM said they couldn’t arrange a vote at all the locations by the deadline imposed by BA’s so called “best and final offer”.
Something tells me that if all of a sudden Boeing agreed to everything the IAM wanted so long as a vote took place in 5 days the IAM would find a way to make that happen.
Can Pope stay??
Not sure if Pope represents the hardliners or Ortberg.
don’t think so
Reuters
Boeing files unfair labor practice charge against striking union
“The planemaker said the International Association of Machinists and Aerospace Workers unit representing the workers had failed to bargain in good faith during the four-week work stoppage.”
Reuters
US says FAA oversight of Boeing production ‘not effective’
‘ The Transportation Department’s Office of Inspector General said in a report the FAA’s current audit processes “are not comprehensive enough to adequately identify key discrepancies and noncompliances within the Boeing production line” and said the FAA has not addressed longstanding weaknesses in Boeing’s oversight of suppliers despite long-known risks. […]
The report said the FAA has not been able to resolve allegations of undue pressure on Boeing employees acting on FAA’s behalf in a timely fashion because it has not enforced requirements that Boeing provide sufficient information on the allegations. […]
The report that reviewed oversight of the Boeing 737 and 787 said the FAA “has yet to move from a reactive approach focused on addressing individual manufacturing issues to a more proactive, data-driven model to identify and address risk within Boeing’s manufacturing processes at all levels.”‘
https://finance.yahoo.com/news/us-watchdog-criticizes-faa-oversight-151143459.html
The plot thickens…..Interesting case from 2023, what if IAM loses the Boeing unfair labor practice charge against them?
Supreme Court ruling: Unions liable for economic harm to employers
“A recent landmark ruling by the United States Supreme Court holds that labor unions may be liable for intentionally causing economic harm to employers. This decision establishes that the National Labor Relations Act (NLRA) does not necessarily shield unions from liability for foreseeable actions resulting in property damage or financial losses during strike activity.”
https://www.pittalaw.com/blog/2023/07/supreme-court-ruling-unions-liable-for-economic-harm-to-employers/
I wonder what assets IAM national has? Probably the IAM pension fund is about it? It would be interesting if the IAM pension is bankrupt from a ruling. Might be time for IAM national to be the adult in the room to negotiate a new contract
@Pritchard
When you read that link it is for very specific situation where walking off the job caused equipment damage because the process was not completed.
Boeing would have to point out all the equipment that was ruined because they were not shut down properly. The court is never going to tell a union that it cannot strike because that would cost a company sales.
Both sides file these things all the time. Whenever this is settled they will withdraw their complaints and move on. Even if Boeing wanted to litigate this it would be a drawn out process.
Need to look at financial harm to company, the new Supreme court ruling opens the door for a new precedent in what financial harm is. Who knows, maybe the Boeing shareholders will want Boeing to sue for there financial losses in the last month.
here is the filing NLRB
IAM District Lodge 751 & IAM District Lodge W24 (The Boeing Company)
8(b)(3) Refusal to Bargain/Bad Faith or Surface Bargaining
https://www.nlrb.gov/case/19-CB-352506
Does the IAM really want to go down that rabbit hole?
@Pritchard
If Boeing is going to make that argument they would be arguing that any strike that financially hurts a company is illegal.
Do you really think a court would rule strikes are only ok if they don’t harm a business financially? That is the entire point of a strike.
Boeing may not but what about Boeing shareholders with class action lawsuit against IAM
With using federal mediators (twice?) and IAM just saying not enough and wanting defined benefit pension that not in the current contract…. the case might go against IAM
Surface bargaining is a tactic used in collective bargaining negotiations where a party goes through the motions of bargaining without the intention of reaching an agreement. It’s considered a form of bad faith bargaining and is unlawful under the National Labor Relations Act (NLRA)
The entire point of the strike is to hurt Boeing shareholders too. They ultimately are in charge of Boeing.
I am sure every publicly traded company would love to ban strikes. That would be a neat trick.
David, you should read up on how ULPs work and why they are filed. In past IAM/Boeing contract negotiations, all pending ULPs have generally been discharged at the end of negotiations. Filing ULPs is a tactic used on both sides to create pressure–IAM has filed 6 to Boeing’s 1. If these ULPs were litigated, by the way, the end result would be the NLRB telling the party to “knock it off” and post a poster saying what they did wrong. (If you have been to Boeing in the PNW, you’ve seen these notices posted)
The case you cited assigns unions the “legal duty to take reasonable precautions to prevent foreseeable harm to property resulting from the strike”. This would be something like intentionally stopping a composite cure halfway through due to the start of a strike without trying to prevent property damage. However, unions are immunized against claims for “damage incidental to the strike”, such as the economic cost of the strike itself.
are they if found to have bad faith bargaining and is unlawful under the National Labor Relations Act.
IAM pension fund (retirement fund) assets in 2023 is about $13 billion
#178 on the list
https://www.pionline.com/largest-us-retirement-plans/2023-full-list
Part of Boeing NRLB filing… Surface bargaining is a tactic used in collective bargaining negotiations where a party goes through the motions of bargaining without the intention of reaching an agreement. It’s considered a form of bad faith bargaining and is unlawful under the National Labor Relations Act (NLRA)
Based the past month events, IAM is not looking to good at this point
Wonder if IAM national can separate IAM Districts 751 and W24 pension assets into separate fund to protect the assets of all IAM members in case of a potential lawsuit
That might a nice chat around the strike barrel tonight. So the President of 751 doesn’t want the currently employed IAM members to accept 30% pay raise while risking a potential lawsuit losses to local IAM retirees retirement assets
Boeing to cut 17,000 jobs as losses deepen during factory strike
“Boeing will cut 10% of its workforce, or about 17,000 people, as the company’s losses mount and a machinist strike that has idled its aircraft factories enters its fifth week.
It will also delay the launch of its new wide-body airplane.
The manufacturer won’t deliver its still-uncertified 777X wide-body plane until 2026, putting it some six years behind schedule, and will stop making commercial 767 freighters in 2027 after it fulfills remaining orders, CEO Kelly Ortberg said in a staff memo on Friday afternoon.”
https://www.cnbc.com/2024/10/11/boeing-layoffs-factory-strike.html
Breaking: Boeing Announces Delay Of 777X Program Timeline Until 2026
https://simpleflying.com/boeing-delays-777x-program-2026/
Launch in 2013 and maybe first delivery 13 years later for an upgrade! Wonder what Sir Timothy Clark is thinking…maybe time to call Airbus and put an order in for more A350s and call Boeing to cancel their 777x orders
If 777x is canceled program and no more 767 freighters Maybe another billboard sign is in order
“Will the Last IAM worker Leaving EVERETT Plant — Turn Out the Lights”
@Pritchard
Before overreacting…the 767F needed a waiver to keep production going. Boeing was probably told “no”
And as far as the 777X is concerned…that is no more than the stating the obvious at this point. It was comical to think it would be delivered mid-2025.
The bigger news is the 10% layoff. That’s not something a company does if it thinks its going to launch a new aircraft anytime soon.
This was dropped on a Friday afternoon of a holiday weekend so that the fewest number of people would notice.
maybe for “and record $5 billion in losses in the third quarter, as the U.S. planemaker continues to spiral during a month-long strike.” for the stock market to adjust to the losses
😭
“Any aviation journalist who writes the 777X is delayed to 2026 because of the strike is fired.”
https://x.com/jonostrower/status/1844839195216695625
WSJ: Boeing to Cut 10% of Workers, Delay New Plane
https://t.co/CVkiaqoJnO
‘BREAKING: Boeing cutting 17,000 jobs (10% of the workforce), delaying 777X to 2026, ending 767 commercial freighter program in 2027, and anticipates “substantial new losses” in defense business.’
https://x.com/jonostrower/status/1844840788339126433
“Boeing becomes its own ‘burning platform’”
Tim Clark paging Airbus: let’s have a talk.
I’m guessing Sir Tim could get A350s without much of a wait.
from Reuters
“and record $5 billion in losses in the third quarter, as the U.S. planemaker continues to spiral during a month-long strike.”