By Scott Hamilton
Oct. 23, 2024, © Leeham News: In the end, it wasn’t even close.
Sixty-four percent of the IAM 751 members voting tonight rejected last Saturday’s revised contract offer from The Boeing Co. The absence of restoring the Defined Benefit Pension plan that was given up in 2014 and inadequate increases in wages are cited as the key issues.
There was already a game of chicken underway between Boeing and the union. This time, Boeing was considered to hold the weaker hand.
But moves within the last two weeks to improve its liquidity position dramatically changed Boeing’s ability to withstand a long strike.
Boeing filed a registration statement on Oct. 15 for a “shelf offering” of equity or other securities for up to $25bn. On the same day, it added a second line of credit for $10bn to be drawn when needed. A previous $10bn LOC remains untapped. And it had $10bn in cash and securities on Sept. 30, the end of the third quarter.
Boeing has $55bn in liquidity to carry it through a long strike, if necessary—far more than the IAM has today.
Boeing is adamant that it will not restore the Defined Pension Plan. The 35% wage increase proposed in the now-rejected offer only catches members up to 2014 and not today’s wage requirements, said one observer.
The local IAM and its members have now rejected three contract offers from Boeing. The game of chicken has escalated dramatically.
Suppliers and the local economy, already affected by the six-week strike, now have only uncertainties looking forward. Boeing suppliers are across most of the lower 48 states. In normal times (going back to March 9, 2019, the day before the second 737 MAX accident), Boeing is the largest US exporter.
The negative ripple effect will continue. It will be some time before the damage can be fully understood.
Maybe not close but certainly not a 95% rejection. That $55B in liquidity is not exactly real yet. The $25B in equity will likely not occur until there is a contract. Any incremental debt increase likely means a downgrade in credit rating. I will actually be more interested to see how dire the situation at Spirit is to see how long they can withstand a work stoppage.
Most analysts have predicted a wide range of $50 – $150M of cash burn a day…quite a range but still $1.5B / month on the short side.
65% rejection may sound like a lot…but it indicates a union now divided. I would actually take that as a good sign that the final settlement is closer than many think.
If that 14% or 13% are the workers who want their Pension back. Boeing is screwed. These workers will hold out until their Pension is restored. These workers have saved up for a long Strike.
You are not going to get your pension back. It was the Boeing workers who voted to give it away in the first place!
In case you didn’t know the history!! During that contract vote that was the 2nd in as many weeks. They forced a vote on a Friday, and it was the 1st day back after our Christmas break and normally only about 20-30% of people go in that day. There was also a large number of people out of the country on break, I personally was with my family at Disneyland and when I tried to do the proxy vote it never went through. Because of the way that vote was conducted less than 50% and as few as 30% voted on that contract to take away our pensions. So as such between 15%-25% agreed to removing the defined pension for the other 85%-75% of us! So does that sound like a fair trade for our pension and did the company and international Union who forced us to vote on exactly that day use fair and professional tactics. It’s important to stay informed about the facts of how we got here, we aren’t greedy and we do deserve what we are requesting. Thank you for your input. Spread Love and Be Amazing!
Not to mention boeing brought in the international union to force the vote which they had bribed before they even came in. Boeing offered the contract 1 week before which was voted down 70 to 30 and all they added to the 2nd contract was $500 a year in dental and it passed 51 to 49….come on. Also the international union destroyed the votes less than 90 mins after the vote to make a recount impossible. Oh and food for thought the entire board of the international union from the pres. All the way to the secretaries were retired within 6 months of that vote. Yeah tell me again how we voted it away….
Cry me a river …
Sure go for the wage increases , but for those nervous nellies worried about how long their 401K ‘will last’ after retirement .
Heres a word of advice . Annuity
Dont forget a 401K is an asset in your name thats part of your estate if you die ‘too soon’.
A Boeing defined pension in the same situation, its swings and roundabouts
It was your union leaders that set the vote time and date not Boeing you are holding out for something you will never get back and do you really think Boeing will launch a new airplane in Seattle? You guys are dreamers!
You were in Disneyland milking your ‘forced’ time off and werent able to vote. As a result, others voted for you and you got a large lump sum to invest in a 401k plan in leu of a pension. Forgive us if we dont simpathize with you. Pensions are a thing of the past. Union members need to get over it before Boeing lets the government step in, they regroup and move all assembly to South Carolina and dont habe to deal with union nonsense anymore
This is the main reason me and a lot of others retired in 2018. We definitely got screwed over the Pinson in 2014. But couldn’t get it through the younger employees heads. They are getting what they deserve from their priovous actions.
You have no idea how that came about I’m guessing . We had it stolen away in the middle of the contract on holiday break when most of the membership were away on holiday . Might need to check your facts
Stolen election?
ROFL
Very few private employees have a pension anymore. This is greed. Just union greed!!
I take it you have extensive knowledge of the history of unions and their impacts on the current benefits for workers, as well as extensive union experience? No?
You enjoy weekends off? How about insurance, 40 hour work weeks, bonuses, profit sharing, employee assistance. Thank Unions.
As for greed… Yes, I guess it’s greedy to want to be paid an amount that accounts for inflation AND reflects the increase in business impact you’ve accumulated AND feed your family. That’s just crazy talk to want that. Seems to me they’re close though.
It appears most here are resentful of unions, presumably BECAUSE they can play hardball.
I live in the pacific northwest and I know a lot of people working for Boeing. From assembly to engineer. The wage Boeing is paying their workers are much higher than those in other companies. (Even without the proposed increase. ) I have seen people cheat to pass the QA test. I know a QA person in Everett that only has a HS degree and barely able to speak English. He works for 25 years at a nail salon and now he’s QA for Boeing planes. LOL. There’s an engineer I know who bragged about working from home and taking a nap. When he gets a call, he tells people he was at a meeting. Now they want more money. This is crazy 🤪. They know they can’t be fired because the union protects them.
That’s union for you. It promotes laziness and incompetent.
To Herald – as a matter of fact I have 30 years experience negotiating labor agreements with many of the biggest u ions in America I clsuif the IAM. I know greed when I see it.
You are absolutely right. Most companies don’t have pensions, but that’s exactly the reason they’re fighting for it. The stock market is for the rich not the blue collar investor at a company. Look into why the 401k was started. Pension sucures retirement, stock market could go under the day you retire.
There’s a perspective that wasn’t immediately obvious. That would be if you’re reference to greedy Unions was directed at a specific Union’s structure, Leadership, and collateral motivations.
I say that because I had heard of an angle on investment management fees and the Union.
If that’s the case, you very well could be right and I would defer to your experience in that regard.
I will also say that there’s good and bad Unions as well, just as with any other institution.
As far as the current strike, yes the current union Leadership appears out of touch with the rank-and-file, but the ask of the Union, 40% over 3 years doesn’t seem out of line. Especially when considering the comp increases Calhoun of more than 40% in a year and comparing his impact on the biz.
Going from an average of $86.8k a year to $122.5k is nowhere close to greedy. The funny thing is, the extra 5% equates to all of $216 million annually. Boeing is burning through that in 1 to 4 days as it stands.
Given that, I think it’s Boeing who’s being Penny smart and pound foolish.
Many of us not in the union are at risk of losing our careers now. After 19 years, I am terrified. We don’t have pensions, and we are lucky if we get a 3% cost of living raise. Inflation is caused by the demands of goods and the government. Vote different. We work just as hard and actually bring in revenue. Yes, greed. You have 33K, which caused 17K in their careers.
Yes they have
@Eric C
Per LNA:
– Forty percent of the members are veterans who lost their pensions in 2014.
– Half of the membership is less than six years on the job.
Buy Airbus, those don’t fall
5000 votes…is all it would take…a bigger bump in washes or ratification bonus and it would pass…
That is next.
I would not be surprised if Boeing announces the equity raise Monday morning. My belief is that Boeing did not want to use the equity aspect, but set itself up so that if the IAM rejected this proposal the company could raise the cash ASAP to say to the union we can outlast you.
With the Union saying no, now the company can file the paperwork to raise the equity (which will probably have a negative short-term hit on the stock price) and hold that cash to get them through all of 2025 without having to tap any of the Lines of Credit (ie the other $20B.
This strike will either be solved over the weekend OR it will go well into the holiday’s and new year. It will depend if the parties even want to talk in the short term.
Not sure it will be that easy to raise new equity without a solution to the strike in place. Will investors really like to finance a chicken race with the union that will run the company into the ground?
I never understand the motivations of the investor class, but this is a weak pitch: “Sure, we’re so bad at management that we can’t even deliver aircraft customers want, and we may need to go bankruptcy so you lose your entire investment, but invest with us because the future is bright. I mean, it can’t get any worse, right?”
When you can go to your frat bros and have them print trillions of dollars for you, it’s not a problem. Throw away someone else’s money.
@Sterling
The same investors eager to buy at current prices, the stonk went up after market open.
The short answer is yes, investors will line up. Boeing is the only commercial aircraft manufacturer in the USA. The government will not surrender that line of business to Europe. The IAM needs to take a good hard look at what is going on in the auto industry. Those contracts were accepted just about a year ago, the auto industry is now laying off. The same will happen at Boeing. Boeing will automate the factory floors at a stepped up pace and they will offload more of the sub assembly work.
“The government will not surrender that line of business to Europe”
The government surrendered the high-end lithography line of business to Europe 20 years ago — and the world didn’t end.
And Boeing no longer makes commercial aircraft: commercial aircraft are expected to be designed and manufactured to strict standards — Boeing no longer does either.
They’ve got to build the automaton first its so ironic to me that everyone is an analyst at least they think they are
Boeing tried to automate and it was a disaster. Hundreds of millions of dollars were wasted and Union workers had to fix the damage caused by the robotics. Boeing has a 5000 plane back log, sure there might some layoffs, but somebody has to build those 1000s of planes
The hilarious thing here is Boeing has tried to automate anything they could and it failed miserably. There’s rows and rows of scrapped robots in the basements. I’ve been in there and laughed at them. They built an entire new building just for those things, didn’t even put ground level bathrooms in because they were going to be so great that only a few workers would be needed and then had to scramble new jigs so people could work there because they were absolute failures. So yeah good luck with that lmao.
At the end of the day, the government has the power to dissolve the strike if it’s deemed counter to national interests. They can do this because Boeing is a large government contractor. Reagan set a precedent back in 1981, and the same precedent can be invoked by the POTUS.
The government won’t step in to force the union back to work before the election. Not with Biden in the White House.
I’m well aware nothing is going to happen before the election. There’s too much at stake politically, even if Biden is a lame duck. After the preliminary election results are called is when I think we’ll see some semblance of government action if the dispute is not resolved by then.
What’s the excuse for the government to step in and force machinists to work on 737 MAX, 767F & 777F??
Some concocted excuse of “national security”, no doubt.
Just like the “national security” argument being used to limit semiconductor exports to China (ROFL).
Where there’s a will, there’s a way.
I worked for Boeing in Seattle for 43 years so I’ve been through a few of these. On average they go 45-50 days. A lot of people are going to start hurting and that is sad. I’m hearing there will be a week long cooling off period then negotiatins will begin again with a vote in about two weeks. This is a bad situation with plenty of pain to go around.
Three offers have not been rejected. Only 2 have been voted on by the union membership and rejected. The so called second offer was not presented to the members for a vote as it was not negotiated. Retiring in 2025….there was nothing in this contract offer for me. A pension benefit multiplier increase of $25 would have done it for me.
Does Boeing really want to flush a bunch of this newly raised cash down the drain?
If it does, then Ortberg’s judgement should be questioned.
Several times, the IAM has taken bad contracts in order to live to fight another day. maybe it’s Boeing’s turn this time.
It is interesting to observe where and when the BOD and Big Finance choose to spend chunks of capital north of $50B and where they won’t.
Boeing can’t afford to not build planes. The shareholders and their airline customers will demand Boeing to do what ever it takes to get us back.
Airline customers yes.
Shareholders? The same ones that kept Calhoun on the board?
Will the investors be willing to finance this dispute with the union?
I sure would not if I was a shareholder or potential investor – which thankfully I’m not.
Well the stock has not gone to zero so, you are not the average shareholder (or the institution that holds those shares)
And spiraling out, does it matter what the share price goes down to? If Boeing can sell shares at $150, or 140 or 130 or ……..?
If the investors had any smarts they would have dumped long ago.
So, its a weird world there and shrug.
Most institutional investors hold shares on behalf of retail, like those invest in mutual/index funds. Oops 😬
Exactly.
Many/most holders of BA stock don’t even know that they have that stock — they (or their 401(k) administrator) bought a US index ETF (e.g. an S&P500 or Dow30 ETF) of which BA is a (market-cap-weighted) component.
So true
Smells like Ch.11 is coming closer, then a judge will take over and the court will decide what will happen with the stock, debt and defined benefit retirement money. Most US airlines has gone this way.
https://en.wikipedia.org/wiki/List_of_airline_bankruptcies_in_the_United_States
It’d be interesting to see what sort of institutions are holding Boeing debt. Can they afford Boeing to go into Chapter 11?
It’s hard to consider the order book to be an “asset”. It is an asset if (and only if) Boeing has the capability of turning it into paid invoices quickly and efficiently with a low rate of warranty work. The company cannot at present do that, and has given far more signs that it will continue not to be able to do that than it has for fixing the quality of its output. If the company were to enter Chapter 11, it’d have to convince both the court and creditors that they had a solid plan. That might be tricky to accomplish.
For me, it’s a matter of how Boeing failed to reform itself post MAX crashes. If two very nasty crashes and 346 fatalities didn’t do it, why would anyone believe a promise made in court?
The only saving grace I think the company has left in this regard now is Ortberg. From what’s been written about him, he’s an honest guy. If a court asked him whether he truly could turn the company round, he’d given an honest answer. He’s been there a while and is getting to know the ropes; if he concludes that he can’t do it, he’ll say so I’m sure. If said as part of a Chapter 11 hearing, it’d become a Chapter 7 hearing quicker than the blink of an eye.
Let’s see:
– He sent a threatening letter to employees before the strike vote, which only served to increase their rage…and he did this just weeks after saying that he needed to “reset relations” with the shopfloor;
– He broke negotiation rules by circumventing the union leadership when he presented his “best and final offer” a few weks ago;
– His “best and final offer” was neither “best” nor “final”.
So, is that dishonesty or just complete incompetence?
It is goading to call a desired action ( from the union ).
IMU there is no intention of bringing Boeing back to a vital existence.
Not unlikely.
Say what you will about him, however when he led Rockwell Collins, they were a top notch aerospace supplier with consistent top ratings in customer satisfaction. He’s no rookie, but unfortunately has to deal with a fairly rotten culture that seeped into Boeing after the McDonnell Douglas merger. This will probably take a solid decade to course correct.
How did chapter 11 bankruptcy even enter the chat that is not even a thought in this process it’ll never happen. That’s just crazy talk
@Matthew:
I don’t see that Ortberg has any credibility but it is also stated wrongly.
The Legal question is a matter of assessment by the Judge as to what are the assets and the future for those.
In the case of Boeing those would be its defense contracts and BCA contracts and backlog.
A break point would be something like IBM and its computers (desktops). Ok, nothing here, there are 6 or 8 competitors and they are not going to ever get market share back as they are a high cost producer. Or Kodak and the film market.
Boeing has a lot of contracts/backlog that are worth a huge amount – so the choice in that case is work with the current management and negotiate down the debt and put them in a position where they can move forward as a company.
Boeing has sections that are not lucrative at all. Space is one of them. Really you have the Capsule (Space Station gone in 6 years) the Moon Garbage (never to be) and Satellites (those are the ones I can think of) as well as a separate ULA.
Capsule no one is going to want, dead end, no future, kaput. Space X is in the same boat but underlying theirs is the Falcon Rockets that launch satellites and 6 years of space missions to write down their capsule.
Moon Garbage: Also a no starter. What NASA does if Boeing pulls out? Cry, stagger, pray LM will help out.
Satellites: Sure they would find a buyer for that.
Defense wise you have a host of quality stuff, F-15EX, Hornets, AH-64, Chinook (maybe V-22) with some possibles, T-7A being the big one (a lot will sell over time) P-8/E-7 and two major questions in MQ-25 and KC-46A.
I don’t know what bankrupt does to those fixed price contracts. KC-46A may be able to make money with debt write off. MQ? Hard telling and if more in the pipeline.
So yea, there is a core to come out of Chapter 11 with. Debt free, write your own contracts, issue new stock (old is worthless) Union contract is negated and gets re-done.
BDS has lost billions since 2021, yup what da “host of quality stuff”!!
They have not seen the light at the end of the tunnel, yet. Hope the light they eventually see is not a freight train coming at them!
Nope they’re waiting for Boeing Lotto pension payout. Most of them have 30+ years, once they get the pension they’re out. They can finally retire! And theyll leave the company like a scorned lover. And the middle and younger IAM crew, will be left behind. This pension contract holdout applies only to 30+ years IAM mechs. Everyone else will not ENJOY those bonuses, like the 30+. And good luck if most of them have a job, after the strike. POV No one really wins, if Boeing stock keep dropping, cant catch up, & Boeing paying out 20mil per year for pension @ 10 yrs no one wins, Boeing value at $5 will be worth $2. How is this considered a win for either? It’s a FAIL.😐
I’ve been thinking Boeing will drive this into the ground on purpose, the investors will throw their debts into it and in one fel swoop erase all their debt from elsewhere. It’s been happening in many other things like aftermarket automotive companies in recent times.
A second vote was taken when workers left for Christmas vacation. It was a dirty trick by the union. The first vote for the crappie contract was NO!
@Claes,
Chapter 11 is very far given the fact Boeing doesn’t have a problem raising substantial amount of money.
Regarding the vote reject, as mentioned, 65% is a much better improvement than 99%.
” Boeing doesn’t have a problem raising substantial amount of money.”
By way of creating a bigger hole ….
Self inflicted and endless corporate Rasputiza.
BA hasn’t actually raised any money from that planned equity sale yet.
And the $10B credit line came at a (relativey) penal interest rate. On that subject, loan interest in Q3 amounted to $728M.
BA’s total liabilities amount to $161.257B.
Subtract PDPs and the figure becomes $103.326B.
Inventory has a nominal revenue value of $83.341B, but essentially no earnings value, due to over-discounting.
Chapter 11 is a lot closer than you might want to think.
The point is that Boeing has more breathing room than it did without the additional liquidity.
Absolutely.
But it’s still drowning in liabilities, even with any extra liquidity that it manages to raise.
In a rare moment in the Universe I agree.
Debt has to be pushing 60 billion with forward losses for 5 years at the very best.
Lines of credit are not debt, but if you use it and spend it, then yea, it is.
In the meantime, you are paying for those lines of credit.
They’ll piss it away like any of the other “breathing room” cash provisions.
to cite myself:
By way of creating a bigger hole ….
Self inflicted and endless corporate Rasputiza.
German proverb:
“Lieber ein Ende mit Schrecken als Schrecken ohne Ende.”
Boeing should fire the union workers and use some of that money to retrain people who would much appreciate working there in an open shop!
Why didn’t Boeing hire “people who would much appreciate working there” in the first place?
Couldn’t they at least match what these phantom happy Umpa Lumpas are making working for Uber Eats?
Historically they seem to have hired those ( liking their work )
followed up by decades of “lift share value by starting hate campaigns vs. your workforce”
Karma.
1. Maybe you should actually look at facts. Talk to people who work at Boeing. See how this company has changed since the merger with McDonnell Douglas in 1997. Maybe you should see how it would feel to only get like 2% raise in 8 years. Not everyone at Boeing makes lots of money.
2. Why is it ok that C-Suite & shareholders can get mass amounts of money year over years via stock buy backs yet the people who actually build the plans that your life depends on get scraps?
3. Explain how they would train 33k people in time to actually build Airplanes at all (how do you train 30+ years of knowledge over night)? YOUR COOMMENT SHOWS YOU KNOW NOTHING ABOUT THIS INDUSTRY OR HOW TO RUN A BUSINESS AT ALL!!!!
Spot On!
Say that then BRAVO
What an annoying situation! It turns out the only folks who can build the planes Boeing needs are the union folks…
Well they are clunking along in Charleston. Funny that the shim debacle came out of there after the lines were all moved.
Of course Charleston was enabled by a lot of union workers (aka Contract Labor). Maybe retired types?
Granted with what Boeing has done its a mess on all 3 sites now.
They just hired thousands of new hires and trained them in school and on the floor. They all make $19 an hour. Horrible pay
Agreed there has only been 2 contract offers to vote on (1 that lead to the strike & 1 just yesterday). The so-called 3rd offer was never presented on a way that followed policy & procedure in these matters (thus it was never voted on. People in the press & analyst need to get there facts straight or go into another line of work & keep there mouths shut.
Not every Union worker is a poor employee. There are as in any company hard working employees and there are slackers. Building airplanes is a highly complivated process. Unless you have worked on building airplanes you should probably not comment.
Anyone is allowed to comment.
Now, if they do it with any degree of knowing what they are commenting about?
People that make comments about Unions are usually ones that hae never been forunate enough to be in a Union.
You might want to research the how and why Unions came in to being a positive force for workers.
Viewed from abroad:
US management samples and US unions are well matched.
Both top out on being dysfunctional.
@Coral:
I worked with 3 unions. One was short term so I don’t know how that turned out, our world went on like before but I got a nice pay boost as I was working a higher classification and they had to make it permanent.
One was a mess and once the one job was done, well thousands in line for any tidbit. I did my job and made good money for a couple years.
The last was a holding action but also went into politics and they dumped us through all sorts of illegal shenanigans. It was not worth it to fight it, I would have lost anyway, you need money to fight money.
The last two they only cared about politics and Union Staff jobs. They sold the rank and file down the river at the drop of a pin. If it worked for a rank and file type, that was just good luck.
I am not against Unions. They have their downsides. The Auto industry spiraled itself out of competition and two of the three went bankrupt and Ford got to re-write its contract to the other two.
Don’t get me wrong, management generally could care less or worse as well.
People trying to make a living get caught in between.
Neither side works to the benefit of the company so we all loose.
As an aside, the third union I was in had a guy who had a vision of (gasp) expanding the Union! Him I trusted. He was removed from his position. And then we got axed (more to it but that is the end result).
That Union was like something out of the 50s with a lot of old guys sitting around smoking and telling stories. One in ten knew what they were doing, the rest were just filler. But they had their small areas of trade locked up and they could have cared less for the new section and happy to see us depart, we asked embarrassing questions.
You wish 🤡🤣
In order to do that, Washinton State would have to become a right work state!
ROFL
I suppose you are one of those who think “oh the workers are just being greedy” well you should learn a few things before speaking. The workers have taken bad contract after bad contract. To keep boeing happy and boring has done NOTHING but take and take from the workers while giving outrageous bonuses to the executives and managment. How about this thier standard overtime policy is they can force you under threat of termination to work 38 days with only 2 days off after the first 19 days on a regular basis. Not to mention those could be 10 hour days if they decide also.
Only the management is supposed to get money out of business, the workers are supposed to be happy with table scraps.
While I did not like Unions personally, they at least benefit more than Management does.
Some of best benefits for all workers were a result of Union members laying down their lives at times.
So regardless of how I feel, they are good for workers.
But every time something happens, its the dastardly Unions destroying the company and the management that has bee liquidating Boeing all this time are just as pure refined white sugar.
Oh have fun with that. You obviously haven’t worked on a shop floor job that requires actual skill to perform the work. We’ve had new people come in and it’s an absolute joke. The kids today have no hands on experience with anything and incredibly sad work ethic. They weren’t brought up working on anything hands on and there’s no common sense. The reason the union is so strong is the knowledge is passed down through the generations and the members posses far greater value then off the street people.
BA’s most recent offer rejected?
No worries!
Kelly said yesterday: “I’m encouraged with the progress we are making already”.
p.s. Any idea what on earth he might be referring to?
That is a hoot.
Clearly Boeing is playing a game, whittle down the numbers till it passes.
30+% drop in the last pass.
Next pass may pass (or not, you could have a hard core floor). We will know in a week or so.
The current $10.B in cash is essentially gone already, due to accounts payable of more than $12B.
BA also has accrued liabilities of $22.6 B.
And it has to pay back $4.7B in debt within 6 months.
All-in-all: BA’s “war chest” is a lot emptier than many realize.
https://boeing.mediaroom.com/2024-10-23-Boeing-Reports-Third-Quarter-Results
Plus: at least one analyst has opined that the $10B credit facility was opened because of tepid demand for the planned equity offering…
Does the result on Nov 6 impact whether Boeing make a new offer before then? Basically, do strikers feel that the terms they can get will differ meaningfully if Harris wins vs if Trump wins?
64/36 does actually feel close to me. Compared with 94/6 (am I orrect?), that is a huge movement. 64/36 feels like tweaking territory. Significant tweaking but tweaking nonetheless.
Who says there’ll be a result on Nov. 6?
Polls are indicating a hung vote — which suggests weeks of recounts and lawsuits.
And the new incumbent won’t be sworn in until Jan. 20.
All that having been said, I read months ago that BA expects an R-WH to be more “amenable to BA’s needs” than a D-WH.
A hung vote is still a result.
OK, so if strikers believe Trump will win then they may decide to jump (relatively speaking) and if hey believe Harris will win they may decide to hunker down (relatively speaking). Right?
My understanding was betting markets, which seem more successful than pollsters, are just below the threshold of a Trump win, and trending to Trump.
Or the government can order a break-up of Boeing and decide which parts to support with huge low interest loans and which parts to be sold/closed. It happened before with the government breakup of United Aircraft (Boeing, P&W, United Airlines)
You thing nothing has circumstantially changed in those 90 years?
Agreed. That’s been my most likely end result for a long time now Claes.
Boeing can decide that they tried for decades to manage Seattle in a succesful way and conclude someone else can try to do it better. That leaves military aircraft, weapons, satellites, and spacecraft left, not a total success right now but could be. Move HQ to Saint Louis and be a new Mac Air that is easier to manage and have Uncle Sam as the major and understanding customer. That leaves a decision on 787 South Carolina should it stay or should it go?
The betting markets have been spiked by some rich folks who want to build the image of an inevitable Trump win.
Once it became known that the betting markets can be more accurate than polls, the manipulators jumped in.
Boeing spent more money to startup S.C. Than it would have cost to mfg all in Wa. (To break the unions “holding them hostage stance”). Problem: without union workers there, the “Fire at Will” management has resulted in a revolving door, without a stable workforce. The quality issues from the 787 continues to diminish the rewards. Right now, ALL S.C. 787’s built in S.C. Require live Red, White, Blue FAA ticketing of the A/P’s. All due to a NOW former VP placing undue pressure on the ODA group internal to Boeing. Live ticketing because they (Boeing S.C.) can’t be trusted. It’s a great science project, but moving models from P.S. to there would finish the Co. off. Now because of increased FAA oversight, all NEW lines created, will be under a microscope, with stepped up inspections ( including new 737 line in the works in Everett.). When Boeing P.S. gets a good contract , those in S.C. Will likely take another run at unionizing. The pay in S.C. Vs. the responsibility of the job in a management, one sided “fire at will” production facility is dismal. They have a harder time recruiting qualified, experienced A/P mechanics than P.S. does, and with no union protections, it isn’t worth it. The best thing for Boeing S.C. Would be to unionize, as it would then grant them access to sorely needed talent and employees actually looking for a career, as opposed to a pressure cooker job, missing many benefits and pay for an honest days work. Only then could they improve the Quality of their S.C. Built product. Boeing still has to deal with customers of 787’s on the backlog that refuse to accept Delivery from S.C. (Qatar, ….), requiring them to be flown to Everett to go thru the final inspections, testing and ticketing of those A/P’s because THEY don’t trust S.C. Quality.
A move to S.C., right to work state or not, is not in the cards at this time .
@TG:
Major truth to and about Charleston.
Everett is not doing all the re-do of the 787s though. Who is doing that work in Charleston I don’t know but a guess is contract workers (former union, retired or working here and there).
Not sure how many people would want to move to the Swamp in Charleston though. They call it the low country for a reason.
It’s a Uni-party here in the Exceptional Nation: the differences
are merely cosmetic, with the real power residing beneath surface PR.
“Brought to you by Blackstone, Blackrock, Vanguard Group,
Goldman Sachs, et al.. “
It’s 2024! The Defined Pension is not coming back! It’s sad but that’s the times now. Be lucky there’s even a 401k!
I agree.
However, there have been plenty of historical instances of warring parties holding out for a hopeless cause.
Plus: some people just want to watch the world burn.
I suspect that Kelly and Steph were assuming that the offer would be accepted, and that they’re now befuddled as to what to do next.
This strike is based more on emotion than on logic.
I don’t think you understand the dynamics.
Boeing people hate the bean counters that have ruined the company culture. And Stephanie Pope and Brian West are the lead bean counters in that hatred, now that David Calhoun is gone.
The GE corporate raiders have left Kelly Ortberg a huge people mess that will take a very long time to fix. And the bean counters won’t help with that at all.
What they do next is tell them we are done bargaining.
You are welcome to comeback to work or we are going to start hiring to fill your position.
That’s sure to work out well.
/s
Boeing can’t hire enough qualified people now. Job fairs all over the U.S.. Qualified workers won’t come here for the starting wages they are offering. What rock have you been hiding under?
You have absolutely no clue what it takes to build a Boeing aircraft.
Abalone no it is based on being able to live in a state without having to work mass amounts of overtime to be able to get ahead. Not everyone at Boeing is MAXED OUT! Not everyone at Boeing makes more than $50-80$k. Explain to me how I am to buy a house only making that little while paying rising rent cost, food cost, Healthcare & insurance cost & vehicle cost?
If you don’t work here please don’t assume what we are fighting for. You only hear what the media wants to tell you which is not facts , it’s also just the tip of the iceberg.
Precisely what was outlined here: https://leehamnews.com/2024/10/14/pontifications-boeing-needs-massive-reset-and-not-just-with-labor/
Yep.
The type of pension that you have does not determine what you can or cannot buy with this week’s paycheck.
Chasing a fallacy is an emotional activity — not a logical one.
By all means hold out for better pay. But don’t delude yourself into thinking that restoring a defined-benefit pension is a realistic goal.
—
If BA gives you a 50% pay hike, but sticks to 401(k) instead of a defined benefit pension, will you vote “no”…?
On the subject of pensions, the most recent balance sheet shows that BA has:
– Accrued pension liability (net) = $6.097B.
– Accrued retiree healthcare liability = $2.121B.
So that’s $8.2B that BA effectively “owes” to the pension pot.
This is on top of “general” accrued liabilities of $22.6B (which can include things such as salaries, rent, etc.)
Employees should accept the offer. The Boeing company is not in good shape right now. Union workers complained their salary can’t afford to pay bills in WA but they forget that they are not the only employees working here in WA. How come other employees not working in Boeing able to pay their bills? In fact, most them working OT are not really working there, too much freedom.. some are sleeping, some they start exercising before do the job, some needs OT for vacation/cars/luxury thing, some voluntarily do OT even they don’t know the job, some milking the job . And the manager can’t complain because these employees are under union. If employees demands high raise , they should show concrete jobs. Even some complained that CEO have millions, when they can’t be CEO themselves. They need to be responsible and real to the situation.
Like we should really care for a company that could care less about us can you say delusional🤣
You have no idea how your post looks to a Boeing employee. They were forced to take a bad deal in 2014 under threat of 777X moving out of state. They were cheated by the GE overlord of the time, James McNerney.
Now it is payback. So sell some bonds to pay the machinists. It never bothered them to sell bonds to do stock buybacks to enrich the executives.
And moving 777X now would be very costly giving the wing factory they built north of the Everett plant. The wing is too large to transport on the highway or by rail car.
The real scoundrels (Stonecipher, McNerney, Calhoun) are now all gone with golden parachutes.
All three of those scoundrels that you mentioned are pupils of the late Jack Welch of GE. All three of them dragged down Boeing due importing Neutron Jack’s corporate politics.
I agree 100 percent
When the Company sold us out and took our pensions they did so during a holiday break and as such Les than 50% of our union brothers and sisters voted on that contract and as such less than 30% of the union members accepted a contract stealing the pensions from the other 75% of us. As such the pension should and WILL be on the table at some point and those of us that have worked for this company through all of this turmoil realize the only way for Boeing to come out of this is by the best airplane mechanics in the world building their way out! Anyone who is willing to stand by and not realize that and also acknowledge that there is nobody who wants to fly on planes built by unhappy pissed off mechanics is absolutely not in touch with reality! The truth is we deserve our pensions to at least be on the table especially when we have all watched Stoncypher sleep with his secretary in his office and get a golden handshake on the way out, Mcknerney tank the 787, NG, and Max programs and in the process get a golden handshake on the way out, and the last guy come in and make it worse and also get a golden handshake on the way out…..so why not us and why not now? Throughout each of their tenures we machinists made due with less and some of us as single parents watching inflation soar and getting a 1% GWI EVERY OTHER YEAR!!! “ made concessions!” Like the company asked us to do and we quietly let our families suffer while they each made tens of millions personally and now Ortberg comes in and says he wants to Chang e the culture!!! The culture that needs changing starts with their culture not ours. WE DESERVE EVERYTHING WE ARE ASKING FOR AND MORE!! Please if you comment on any of this understand that while we are on strike we get $250/week for strike pay, when we get an offer for a ratification bonus what’s not in there is retroactive pay for all the days off so we loose way more than we ever gain and we are willing to sacrifice that and our families immediate needs and wants for a pension…..so it is so very important to people like me who may not retire without it and who may just need that one thing as motivation daily to go to work with a smile and take pride in not only myself but the once great company I have given 20 years of my life to!! Please respect our decision and democratic right to not only organize but fight for what we deserve, if you envy us or what we’re fighting for then join us and more than likely we will join you when you need us! All of us at the bottom end of the 99% are all the same and need to be strong together. Please spread love and be Amazing!
So would you have to pay back 10 years of matched funds when Boeing put your pension into 401k?
I’m also curious what kind of pension amount you are talking about. I have 17 years with Boeing and will get $1000 month – not enough to live on. And I fight like heck just to get a 3% raise each year – unfortunately your strike now puts me at risk for layoff and if I don’t get laid off, no raise or bonus this year! Thanks for that .. How can you turn down a 35% increase??
BA sold 8.28 million of its treasury shares (from previous buybacks) in Q3, which would have raised about $1.3B in cash; without this, cashflow in Q3 would have been even more dramatically negative.
At this rate, it would take the company 10 years to sell off the remaining 394M treasury shares.
Why the slow pace? Evidently the company doesn’t want to unbalance a precarious supply/demand equilibrium for the stock.
Has anyone (outside Boeing)done the maths?How much does this wage demand cost per year?
How many vital skilled workers will they lose if they don’t pay enough?If they were going to leave ,why haven’t they already done so?
Bank of America figured the $35/hr package would cost about $1.5bn offset by $600m in savings from the layoffs.
Do we have any idea of the extra costs to BA associated with restoration of a defined-benefits pension as opposed to the most recently-offered 401(k) construct?
Which isn’t peanuts, but also isn’t elephants.
But what about 2nd order stuff? Suppliers’ (and their suppliers’) employees want to keep up, S&D on employees in WA, all pushing Boeing’s input prices up. Do you know if this s included in the BoA estimate Scott?
Scott $35 hour package? What are you talking about?
$20 + 65% + ..
apropos:
what do qualified workers get from Airbus in Mobile?
How does cost of living compare to Seattle area?
Oops, 35%, not $35.
IMU there is more offset potential:
less rework linked to dissatisfied workers.
less compensation to customers.
….
i.e. overall less unplanned and unproductive outlay.
If, as you summarize in the headline, Boeing is embarking upon financing a game of chicken and has done some analysis of the cost of winning that game, they’ve further lost the plot.
Regretfully, Boeing has a 5 year long trend line of failing to make money for all but a very small handful of stakeholders as a result.
Perhaps the shareholders and financiers should account for the cost to build and deliver sustainable first time quality and innovation with increasing productivity and strike that deal.
Step 2 after winning a game of chicken is another game of chicken, and that isn’t a business.
Amen.
I wonder when Amazon raises its base wage for fulfillment & transportation staff by $1.5 to over $22 per hour, what’s the second order effect? People can vote with their feet.
The cost of touch labor in building a commercial aircraft is about 5% of sale price.
This is more about hating the union than dollars and cents.
When they split the 787 line to move it to Charleston, they gave up billions in learning curve cost savings, simply to spite the union.
Boeing also needs to take into consideration how the strike will affect the supplier base. Especially the small to mid sized ones that do not have easy access to the financial markets might soon have a liquidity crises of their own.
They are already weakened by years of ”Partnership for Success” pressure and Covid so they might not be able to hold out that long this time.
Spirit is the one I would be worried about the most.
Drove by the picket line, obviously those neglected workers are still eating well.
Platypus what the heck are you talking about? Don’t assume anything by just doing a drive buy. Plaus a major of food you see on the Picket lines is donated by members of the community.
Don’t tell me how my quality of life is or assume what sacrifices I have made to get by! That was the stupidest comment I will read today!!!
You are absolutely correct Brandon. People that don’t work at Boeing have no clue the multiple operations it takes to build a plane. Nor how dangerous it can be even with the safety protocols in place.
The door of opportunity is open to everyone but some people simply want to put others down!
And they do not know the 20 year history of ruthless management actions that have destroyed the culture.
In 2o16 they laid off all of Boeing Research and Technology — 3200 people — to screw the baby boomers out of their pension. The pension isn’t worth much at 50 but vests fully at 60, so if you lay off a bunch of early 50s baby boomers, … you get the picture.
Nobody trusts the bean counter culture. Boeing was an engineering company based on knowledge before the McD merger. Now it is a company all about power. And that is where the failures are coming from.
They quietly deleted about 7% of QA checks on mechanic work to save money, and then they squeezed the mechanics to work faster. Without the QA checks, you don’t know if the work was even done.
Thanks for this comment.
Thanks for the continuing coverage of the IAM / Boeing strike.
“It’s a game of chicken now, and Boeing has up to 55bn eggs.” Well, eggs aren’t $1 each — but we’re getting there.
$1 each? At that price I’ll have to lay off eggs, I can’t afford to shell out that much. That sort of price is beyond a yolk.
Etc.
The latest $10b credit facility is a bridge financing, the terms dictate it has to be repaid after the equity/equity-linked raise, BA CFO maintains that the co. needs a min of $10b to run. There’s no 55b eggs.
I suspect LNA arrived at $55B as the sum of:
(a) $10B current cash;
(b) $10B recently opened credit line;
(c) $10B untapped existing credit facility;
(d) $25B intended equity raise.
But you’re right: (b) has to be immediately repaid if (d) is secured.
So that makes $45B.
(a) $10B current cash;
(b) $10B recently opened credit line;
(c) $10B untapped existing credit facility;
(d) $25B intended equity raise.
No!
The 10 billion US dollars come from the 10 billion loan that was taken out in September.
These were the last 10 billion loan commitments from a few months ago.
This means that Boeing has US $ 10 billion in cash, but it will already be charged US $ 9.5 billion for suppliers and other costs in the coming weeks.
So it fizzles out.
Thus (b) is gone and (c) does not exist. There is no unused additional US$10 billion credit line.
What there is is a 10 billion US dollar bridging loan that (d) must be repaid immediately if the 25 billion US dollar took place by share sale.
This means that Boeing has (a) cash that is running out anyway and (d) 15 billion US dollars from share sales, which is 2 to 3 quarters to cover the costs.
Do your homework. Boeing has a maximum of time until summer 2025. Then it’s over!
(b) hasn’t been tapped yet — it’s just been opened.
(c) has existed for years, but has never been tapped.
From Boeing’s Q3 earnings release:
“In October, the company entered into a new $10.0 billion short-term credit facility and now has access to total credit facilities of $20.0 billion, which remain undrawn.”
And (a) is still there — also clearly visible in the Q3 earnings report.
It’s *you* that needs to “do your homework”.
Haha which do you prefer, aircraft that are late or “poison”??
“All 250 Airbus a/c delivered to us since 2017 were late, while BoeingAirplanes is a tragic case, almost everything they touch turns to poison,” lambasts leasing guru Stephen Udvar-Hazy AirLeaseCorp in Malta today
https://x.com/SpaethFlies/status/1849381399305818293
Our 737 assempbly line 10-20 years ago was not flawless but the best in the world and when new leadership took over in Renton and absolutely destroyed our final assembly system and brought in too many checks and balances and for every problem in manufacturing it would take up to 30 non manufacturing personnel to resolve and throughout that would never actually involve the original mechanics themselves, is why our planes are poison!! Leadership has caused the best airplane assembly line in the word to fall apart. If Ortberg does anything he should look at what made us great back then and try to replicate that. There are no 737NGs or Classics that clients complained about and it’s because we built them great until new leadership came in and changed all our processes so if your a customer PLEASE PLEASE PLEASE!! Get involved and ask Boeing to have more senior machinists who were there for the NG and Classic and ask for them to be more involved in the new final assembly plans in Renton for the MAX, otherwise new leadership will lead to the same problems. We as machinist throughout the assembly line have given input but it falls on deaf ears but if you as customers speak up then it will be heard. As someone building your planes I apologize for anything that we have done but in many instances there are so many reasons why the out of sequence work that’s being done or forced to be done is leading to an avalanche of problems and as such the entire leadership team from first line managers up needs to be removed and replaced with people more familiar with those older programs and how the line worked when we had 3 lines running, at the very least 2 lines. Boeing also should have never eliminated the NG if they were smart they could have cornered the market on single isle planes by continuing to run multiple NG lines while simultaneously starting and slowly ramping up the MAX lines. Many of us senior machinists spoke up about that but the “Senior Leadership “ would not listen. Unfortunately if they would have we could have continued to ramp up and turn out NGs while perfecting the MAX and may never have been in this position.
Carolyn Corvi, Mary Dowell, and their version of Lean Manufacturing, along with “The Move to the Lake” ruined Renton.
That same disease can be seen still festering on the factory floor today.
DJH, you must be new here, but talk of Boeing being better-
” Boeing also should have never eliminated the NG if they were smart they could have cornered the market on single isle planes by continuing to run multiple NG lines while simultaneously starting and slowly ramping up the MAX lines.”
-will earn you the wrath of Team Airbus here.
As someone raised by a loving and strong single parent, hang in there, it will get better.
I’m not “Team Airbus” but I do think that the statement that the 737NG and Max could have cornered the single aisle market between them is arrant and conceited nonsense! The airlines have voted on this and even before the strike, the A32XCEO and NEO series were clear winners, if one goes on numbers of orders, and particularly so in non-USA term I think the numbers don’t lie.
Let’s remember where the 737 MAX came from.
Stonecipher and McNerney blew up the 787 from a $15B program to more than $30B because they did not understand the business. So they got very timid.
Around 2014, McNerney said “no more moonshots” and since then it has all been derivatives. 737 MAX. 777X. In 2019 Calhoun said he would not build MMA because the technology was not ready and he would wait for a new engine in 2036.
You can’t skip a 12 year cycle on building a new airplane. After 24 years nobody will be left who knows what to do.
The GE folks have put Boeing in a huge hole. But they are retired now with golden parachutes.
Not that I want to defend McNerney, but he inherited the 787 mess from Stonecipher. As a BOD member, in April 2003, McNerney warned the other BOD members about too much emphasis on cutting costs on the prospective new airplane and at Boeing–or, he warned, Airbus would gain the advantage. His was foresight–but neither did he follow his own advice after becoming CEO.
I always went with someones character is based on what they do not what they say.
McNerney as totally anti union and even anti workers period with his being part of the group trying to kill off Social Security.
The moves he made on the 787 to kill the union costs Boeing tens of billions.
Of all the Boeing failures in management, he was probably the worst, followed by Calhoun and Stonecipher neck and neck for 2nd.
Mulenberg was just inept and in over his head. Ortberg is about that same category.
The strike is going to be a bitter apple forever even if Boeing survives doing itself in.
Either he is inept as well or the Board is still running the show and I can’t print what I think of someone taking that job without getting full control.
McNerny may have warned about too much cost cutting when he was on the board, but once you buy any neutron Jack beancounter in the CEO office, the results look the same: reckless cost cutting without regard to the future. I think bod members are compensated with some nominal cash salary, CEO’s get a ton in stock, so they’re incentivized to spend every cent on stock buybacks.
Read an article earlier this morning talking about how employees would be making $140k when the last contract was turned down. I barely make $40k a year so a 35% increase over 4 years would be good. I work in a machine shop and would love to have a job that I was making more money but I wouldn’t work for a union because I take pride in my work and do quality work
I have been a machinist building the 737 family of planes for 20 years and we need more people like yourself who take pride in what they do and are good at it. What we are fighting for is so we can attract people like yourself and not anyone lesser, so please know that we don’t make $140k nor will we. I’m a grade 4 and after 20 years I make $81,000, I’m a single parent with no help and my benes for me and my 3 kids, one in college at UW and another that’s disabled cost me over $300/month versus $0 when I started. When I started I made $11.72/ hour and had no insurance costs, a pension and retirement savings. ALL of that was taken away after 15 years by people who came in off the street new and thought that we should make concessions for the company, but they also didn’t care about all of their co-workers and our families, like mine, they also agreed to a 1% GWI EVERY OTHER YEAR for the last 10 years. We are fighting for what we deserve and what we once had and we made many concessions over 20 years. If you come to Boeing as a machinist after this contract you could make $81,000 to start! If anything don’t be upset and envy what we want, join us and know that YOU and many like you are worth way more. Thank you for your. Comments. Spread Love and Be Amazing!
Well James your math is off just a bit. I work on the 737 and I am a mechanic who has his hands on the plane everyday and the last contract will not get me close to 140k so get some better informed articles in the future before speaking and making yourself look stupid.
“Remember that for Boeing, inventory only consists of 737-8s built BEFORE 2023. There is moving the goal posts and there is doing it the Boeing way (to the other side of the field). They’re forgetting one full year of production. We did call on Boeing’s LIE a while ago.”
https://x.com/JPPFRUS/status/1849146438330233142
“There are about 150 undelivered MAXs and about 60 787s. We track them on a daily basis.”
Can anyone confirm the above #s, @Scott?
Pedro.
There are currently 59 787s that have rolled out of final assembly. Of those, only five are still in storage.
19 of the 59 are going to Lufthansa. I believe they’ve had supply issues with their new cabin leading to even longer delays. They haven’t received any 787s for 18 months despite some of the aircrat they’re due being originally built for Norwegian four years ago.
I don’t have an up to date list for the 737.
Thanks.
Airbus starts at 4 weeks of vacation day one and 12 days of sick leave and their starting wage is 26-32% higher on average per grade level. The top end pay at Airbus is the same with the top end being as high as 42% higher than Boeings. BUT!!! Airbus operates in states that have drastically lower costs of living so these ranges would be well over the equivalent of Boeing machinists asking for a 50% raise to maintain competitive wages, which is what they do at the Executive and leadership levels. Since Boeing has had so many issues that they would conveniently and often blame on us Machinists, maybe it’s time to start having competitive wages for those of us building the planes considering a happy employee is a productive employee. Personally I’m a 20 year Boeing machinist and work on the 737 and I don’t get nearly that much vacay and SL and my cost of living as a single parent of 3, one at UW is barely sustainable and I’ve been maxed out for years and work OT. The PNW is too expensive now and our pay has to be reflective of that! Spread Love and Be Amazing
I bet your paycheck would go further in Mobile.
As would your house when the Hurricanes hit, and don’t forget them gaters and snakes and termites!
And talk about hot and humid, ungh.
That “BUT” should have been an “AND!!”. correct?
Better pay in an environment with better purchasing power.
I wonder who are those posters that think Boeing should relocate to the South?
https://leehamnews.com/2024/10/21/voting-by-the-numbers-how-demographics-weigh-in-boeing-contract-vote-wednesday/#comment-526853
Prediction on The Company’s next move: Raise the lower paid, new, entry level workers’ wages. That’s bound to get more votes. In this environment, I’d tend to think the bosses have the advantage.
Why? Because they will pull a Continental Airlines. That is the much imitated Continental Airlines Bankruptcy that allowed banks and the major shareholders to hold onto their stakes. Northwest Airlines brought the same folks in to handle their bankruptcy. These goodfellas really know the ins and outs of the modern bankruptcy. How to end unions contracts, how to default on pensions, how to guaranty equity for the big shareholders.
Laise fare business practices. We all voted for this stuff starting about 1980. Let business do what business does best: make money.
“Boeing Workers’ Deal Rejection Banks on Longshot Pension Return”
“Boeing Co. workers are doubling down on reviving their legacy pensions, rejecting a labor deal with generous pay packages even as similar union efforts to restore those retirement benefits have failed.”
“Unions are finding success making pensions a fixture of high-stakes labor negotiations, even though the economics of guaranteeing income for retirees is a nonstarter for most 21st century businesses. They are using a post-Covid financial revival to cash in on the debts they think they’re owed for giving up pensions when times were tough, but they run the risk of overselling that promise to workers, observers say.
““Employees want to go back to traditional pension plans, but they’re asking for a dinosaur,” said Jane B. Jacobs, a Tarter Krinsky & Drogin LLP partner. “It’s never going to happen.””
““Unions are starting to come around to that realization that, sure, you can throw it on the table, maybe as a bargaining chip, but it’s not a realistic goal in negotiations,” said Glenn Spencer, senior vice president at the employment policy division at the US Chamber of Commerce. “If a company is going to give you a 40% wage boost, they’re not going to then put a defined benefit plan on top of that. And even if it’s a more modest boost, I think that that ship has sailed.””
https://news.bloomberglaw.com/daily-labor-report/boeing-deal-shot-down-as-workers-cling-to-dinosaur-pensions
Remind me again, why would Boeing in the future put a new commercial aircraft FAL in Seattle? At best, if the new commercial aircraft wing is metallic (rivets), the new wing riveters going into Renton in a year or two can do the work since the C Frame throat will be 120 inches (send them to global FAL locations). Boeing should consider SC for US FAL and additional wing production center
Why do you need 33k workers for a couple dozen aircraft a month production rate? That said, Boeing needs to raise the lower end pay rate faster and with a higher starting pay (e.g $28 per hour)
Who says that BA will ever again have a new aircraft?
The company has one foot in the grave, and the other foot on the grave’s edge.
But, yes, I understand your reasoning.
Because 787 is STILL a net program loss.
And that is directly due to Harry Stonecipher not knowing how to build a commercial airplane.
787 should have been a 5 year program for $15B. Instead it was 3 years late and over $30B.
This was solely due to GE management incompetence. Harry outsourced 80% of 787 instead of the usual 50% because of his Jack Welch ideology. The result was there were no spare engineers to go out and help the suppliers when the got in trouble.
He thought contracts would save him. But when the supplier cannot deliver, what do you do? Sue? Old Boeing knew that was a losing position, but Harry was too stupid to listen to the old hands in Boeing.
His follow-up CEOs were no better than him. All cut from the same cloth. I won’t say anything about the newest one…. yet…
If there is a new Boeing aircraft I bet the wings will be mainly composite, but with some metal parts for structural support.
“Spirit AeroSystems weighs hundreds more furloughs or layoffs if Boeing strike goes beyond Nov. 25”
“Spirit AeroSystems is weighing furloughs or layoffs of hundreds more employees if the Boeing machinists’ strike stretches beyond Nov. 25, a company spokesman told CNBC Thursday.”
“Further reductions would be in addition to those furloughs, but no decision has been made, said Spirit spokesman Joe Buccino.”
https://www.cnbc.com/2024/10/24/spirit-aerosystems-weighs-more-furloughs-layoffs.html
Unfortunately what most of you commenting negatively towards our strike fail to realize is that we aren’t asking for the impossible we’re demanding what we deserve! The best airplane builders in the world are in the PNW and that’s undeniable so wether anyone likes it or not all of you who travel by plane or who’s families and friends do should want the people building those planes to be happy and comfortable at their work place and home and not worrying daily about can they pay their rent or feed their families because that is a huge distraction when your meticulously and painstakingly installing vital components critical to something we all rely on to safely transport us and our loved ones across long distances. That said don’t envy or hate us because we are willing to stand for what we deserve and you are not. Also it is probably clear to most that have been through this process multiple other times, that the individuals who voted for this contract and not the others are not in agreement with the contract they are in agreement that they need to start putting food on their tables so they want to work! Boeings offer wasn’t anywhere near a good or fair offer and their offer of a 35% GWI doesn’t equal 39.5%, it is an offer of 35%, unfortunately it’s just one of the many lies that Boeing sells people along with the media. We are not greedy and we are not living beyond our means. We are just Americans who take pride in what we do and want the company we’ve sacrificed for to finally sacrifice for us.
Not sure about some others here, but I fully support your strike, and I’m appalled by the (starting) wages that BA is paying its line workers.
I certainly feel that you have a right to better benefits and better treatment in general.
However, I think that — out of all the union’s demands — the defined-benefits pension demand is unrealistic. I understand that such a pension would be nice to have, but that doesn’t change the fact that it’s gone, and probably gone for good.
Demands shouldn’t stray into the realm of fantasy.
I would like to think most people who are informed realize that the Machinists are not the same thing as pro ball players (millionaires fighting billionaires). A reasonable wage that you can live on is not an unreasonable demand. $20/hr is a joke. That’s $40k/year. That’s not a livable wage in Washington.
“Vote to continue strike exposes Boeing workers’ anger over lost pensions”
*** “The company indicated Thursday, however, that bringing pensions back remained a non-starter in future negotiations. Union members are just as adamant.” ***
“Given the decades-long shift away, Rosenfeld say he was surprised the issue “has remained a sticking point on the side of the rank and file” at Boeing. “These are the types of plans that have been in decline for decades now. And so you simply do not hear about a company reinstating or implementing from scratch a defined contribution plan.””
*** ““There is no scenario where the company reactivates a defined-benefit pension for this or any other population,” the company said in a statement Thursday. “They’re prohibitively expensive, and that’s why virtually all private employers have transitioned away from them to defined-contribution plans.” ” ***
“It is unusual for a company to restore a pension plan once it was frozen, although a few have. IBM replaced its 401(k) match with a contribution to a defined-benefits plan earlier this year.”
https://finance.yahoo.com/news/vote-continue-strike-exposes-boeing-194953583.html
—
So, BA won’t budge on the pension issue.
–> deadlock
Do you expect Boeing to say, ‘ well there might be room for a conversation’?
That’s now how this negotiation thingie works you know.
Besides, pension is hardly the only issue they are refusing to negotiate.
“Before the first 737 MAX crash, Boeing turned down a request from Lion Air to have MAX simulator training for its pilots
Mark Walker at NYT reveals how after the Lion Air crash, Boeing chose not to respond to an Ethiopian Airlines inquiry as to how its pilots should handle MCAS”
https://x.com/dominicgates/status/1849550643561890299
Boeing Email to Ethiopian Airlines Sheds Light on a Crash
https://t.co/F8BDNW2iPb
“This is a follow to Mark’s previous story:
Months Before Ethiopian Crash, Boeing Turned Aside Carrier’s Questions”
I’m voting NO on every contract until they move the starting wages.
I’m maxed, but I’m not letting new people work for WA state minim wage here at Boeing.
we need to attract skilled labor, not randos.
$21 an hour to build aircraft is insane.
Minimums for grade 4 (most common grade) need to be around $28-$30 an hour.
that way Boeing can pick the best candidates and not just scrapping the bottom of the barrel.
you are right, having a more productive workers will make up the pay difference from $21 to $28 an hour to start…you get what you pay for
Why do you assume 751 isn’t productive? Bias much?
33k workers for 24 aircraft a month production in Seattle? Airbus 3 FAL in Mobile 16 a month rate with less than 4k workers Need more automation in Renton to make it more productive
This is totally misleading, David. Calhoun staffed back up after covid in anticipation of returning to pre-grounding and pre-pandemic rates. Seattle also makes the 737 wings and that 33k also covers Everett, including making the 777X wings. Mobile doesn’t make anything–it’s all shipped in for assembly.
Scott:
I am probably wrong but I thought Mobile as well as Tianjin start that way and then start to make sub assemblies like tails and flaps and surfaces and then work toward entire build process?
A220 Mobile different as I think it was all subbed out other than making some fuselages in Montreal when the Chinese supplier had issues?
FAL is FAL.
Modules of any kind are done in competence centers.
_that_ are usually not on site.
like wings done in GB, moved to Bremen for aero surfaces, hydraulics, move to FXW for FAL integration.
( don’t concentrate too much workforce in one place.
wide area daily commute is overall more expensive than moving high value parts with much lower frequency.
FXW and Toulouse are outlieer as forex FXW also produces fuselage segments ( afair ).
For Airbus success hinges on perfect interfacing control from the getgo.
Henry Ford understood the value of paying his people the unthinkable rate of $5/day. You get what you pay for. Your employees are not supposed to be a liability
multipliers.
Ford expected his workers to buy Ford automobiles.
Boeing workers are not really expected to buy Boeing aircraft 🙂
( and the relation could be described as paternalistic.
Look at the philosophy behind the Ford colony.
https://en.wikipedia.org/wiki/Fordl%C3%A2ndia
)
American Airlines is fed up with Boeing
““We need Boeing to be strong, and that’s what I’ve told Kelly,” he added. “At the end of the day though, we need them to deliver quality aircraft on time. And I’ll be welcoming that phone call when Boeing says, ‘We’re going to do that.’”
IAM 751 leadership short-sightedness will cost IAM jobs in the future.
on another note
United to Lease 40 Airbus A321neo Amid New Delivery Delays
The lease arrangements, valued at approximately $4 billion, encompass mainline aircraft, regional aircraft under capacity purchase agreements, and various facilities. These agreements activate between 2024 and 2027 and extend up to 12 years.
No matter what anyone thinks or says the union has got plenty of leverage for the first time in history and the membership realizes it and will capitalize on it.Lets debate it 🤫.💰‼️
@RDC:
Caveat is if they are willing to die on the wall.
Boeing carved off 30 some percent on their last offer.
Next one we will see. Is there a hard core 64% or does Boeing get the next 14.9% it wants?
I Truly enjoy reading these hateful comments from these haters on here it’s so humorous to me of the envy and jealousy that permeates this wicked vile 🌎 🤣
https://www.nytimes.com/2024/10/24/us/politics/boeing-email-ethiopian-airlines.html
Good post.
Somewhat puzzling as from what I could tell Boeing had provided guidance on that.
So why would the chief pilot be asking?
I see the disparity of response between US and Ethiopian.
And general background was there were not MAX trainers to train on.
Also of note was the Trim Wheel function had been messed with in the Sim Programs and it no longer locked up at high speed.
The Trim Wheel program debacle continues to be an area no one ever looked into. Its absolutely required a Sim be 100% true (Fidelity) to actual aircraft ops.
Where did that change come from? As all Sim mfgs seem to have had it wrong, it would seem that Boeing was the source.
But that also boggles the mind. I supported a Sim and they ran tests all the time checking Fidelity. No one noticed it had changed?
And that is a long line of Trim Wheel Ops going back to the 707 that locks up at high speed, a manual trim is going to do that.
Airbus trim would do it too, but they have to many backups that rarely do they get to full manual (and then they crash)
I work for a tier one supplier to Boeing. We are a union shop, and our membership voted to freeze our pensions, and add a percentage to our 401k above what our normal contributions were negotiated. I hated it at first, but then realized that I control how the money is invested; and I can declare my beneficiaries ALL of the 401k to next of kin or to deserved charities. The money in your pension just stops, and stays in the pension fund for extra investing. I support IAM members for what they are fighting for, but keep in mind that pensions are not exactly on our side.
Very valid.
The real crime is that Pensions could be vastly underfunded to start with and you can’t take them with you.
The law could easily have been changed to allow that.
One of the best accounts I had (have) was a matching 401k type that while it cost us dearly at the time, has paid off in a fund we still have.
A downside was that their match was company stock.
I cashed that out when they canned us and it went into mutual funds.
As is spot on that a company pensions is a truly iffy thing
The most disheartening thing about this thread is how many people do not know the history of Boeing since the merger.
Old Boeing was run by [Edited], but they knew how to build an airplane. Since the merger, the Jack Welch protégé CEOs believe they can run the company from a bean counter’s spreadsheet.
And that is what got us to here, today.
They have enriched themselves and driven Boeing into the ditch, mostly out of ignorance of how the commercial airplane business works.
The Old Boeing was a management/production mess
So the 20 day production halt in Oct 1997 didnt exist ?
https://www.spokesman.com/stories/1997/oct/04/boeing-to-halt-production-of-747s-and-some-737/
That was the start of the next gen 737..Predecessor to the max. Boeing was required to redesign the over wing escape hatches after EASA stated it wouldn’t certify the airplane for operations in Europe with the old plug type hatch. A rework/modification area was set up at the lake end of the Renton airport runway. Airplanes couldn’t fly out of Renton until the new hatch was designed and installed. The line didn’t shutdown until there was no more room to park an airplane outside. Took about a year to recover. The 747 shutdown was due to trying to ramp up production too quickly with engineering and manufacturing resources trying to deal with the 737 issues. This was all about the same time the Mickey D boys were starting to make their influence felt.
🤣 Condit & Wall Street were mesmerized by MD’s prowess in finance.
The downfall.
@wxyzzy:
No, the people that ran Boeing into the ground KNEW what they were doing.
Each of those managers got away with 10s of millions of bucks.
Back in the day they called them Robber Barons.
None of it has to do with ignorance, it was greed, pure and simple.
I feel like Boeing management has not negotiated as though its priority is ending the strike quickly. It has negotiated more like an old fishmonger in the market of a third world country, trying to wring every possible cent out of the customer. Ortberg rightly mentioned that management needs to be down on the factory floor seeing the issues and proactively solving thousand dollar problems before they become million dollar or billion dollar problems. All true.
But part of knowing what’s going on on the factory floor is having some awareness of how your people feel about the company and their compensation. Ortberg and management seem genuinely surprised that the mechanics are still seething about the 2014 contract and the fact that in the last ten years wages rose, what, 8% while the cost of living rose 40%. Admittedly, the fact that Seattle has become a high dollar tech hub is not the fault of Boeing management, nor is the fault of mechanics. But management either sincerely believed they would accept its mediocre offers (in which case it is woefully out of touch with the vibe on the shop floor) or it thought these offers might be rejected (in which case they are willing to waste time dickering like a fishmonger obsessed with getting best possible price and not intent on ending this strike quickly).
Also, gotta wonder if Ortberg is really in charge of the Boeing negotiations, as it hasn’t played out much differently than if our old buddy Dave “Cash Flow” Calhoun were still driving the bus.
The figures vary, but one I’ve seen is that the strike is costing the company $100m each day, or about $3b a month. So if the strike ends in 3 weeks Boeing will have lost $6b.
As a very simple model, suppose Boeing gave the mechanics an immediate 10% raise to settle the strike. If the average machinist makes $75k, then the e cost of this would be 33,000 x x .10 x $75,000 = $250m a year.
Over 20 years this would amount to $5b. So if they had settled the strike quickly this 10% raise would have been funded.
Conclusion, once again management is happy to lose billions to avoid paying people millions. Seem that the name on the CEO desk has changed, but the beancounter “penny wise and pound foolish” lunatics are still running the asylum.
If the original contract vote would have been with the latest offer it would have been accepted since it fell below the 2/3 rule.
Alternate view
“When the Machinists voted to reject Boeing’s contract offer in 2013, management had a ready threat.
Today, it’s the union that has leverage
Boeing has few options open as its finances crater and it considers the potential damage to stressed suppliers”
https://x.com/dominicgates/status/1849816077678805155
As Machinists strike extends, Boeing is running out of runway
https://t.co/E1wPU7icGl
Boeing holds all the cards.
They clearly are willing to be sunk vs pay the Unions.
The Union will agree as workers need their jobs and they all are not going to get hired by Amazon (who has nigh mare working conditions of their own)
Boeing has the option to go Chapter 11. Then there is no contract and would require an re-organize.
Boeing simply does not care what happens and the workers have a vested interest.
So Boeing goes down to nada. Ortberg has his nice retirement as do all the board members. they simply do not care.
As far as defined pension demands are concerned, be careful what you wish for.
I worked at GE Aircraft engines for 35 years and had a defined pension. Since I retired over 20 years ago retirees have only had 2 general pension increases, which were small.
The unions at GE as can be expected do their best for current members and in negotiations retirees are a afterthought.
A pension that was adequate in 2001 is not very good in 2024!
Boeing should just move to mexico or china.
And take BD with it?
Sale sale sale!
Earlier:
“… two sources told Reuters the executive suite is too busy and understaffed to speed up ongoing divestitures at its space and defense unit, or to prepare data on other units for possible sale despite desperately needing the cash.”
“Boeing explores sale of its NASA business, including the Starliner vehicle & space station ops. The effort, part of a strategy by Boeing’s new CEO to streamline the company & stem losses, is at an early stage.”
https://x.com/MicahMaidenberg/status/1849850778112163847
Also space news
No explanation for this move.
https://x.com/jeff_foust/status/1849790018669154371
Following NASA’s SpaceX Crew-8 mission’s safe splashdown and recovery off Florida’s coast early Friday morning, NASA astronauts Matthew Dominick, Michael Barratt, and Jeanette Epps, and Roscosmos cosmonaut Alexander Grebenkin were taken to a local medical facility for additional evaluation. The crew exited the Dragon spacecraft onto a recovery ship for standard post-flight medical evaluations. Out of an abundance of caution, all crew members were flown to the facility together. NASA will provide additional information as it becomes available.
https://x.com/Commercial_Crew/status/1849788128443142465
Who the hell would want to buy Starliner? 🫣
Man, we agree again.
Or the NASA garbage.
ULA is still up for sale
It depends.
Clearly execution on Starliner is not good enough and maybe design is also not good enough. But maybe there are assets (IP, personal relationships, contractual relationships, human rating design teams, anything) of value to some entity somewhere at a suitable price.
One wonders how long it will take before we (finally) hear that the 777X, MAX-7 and MAX-10 are going to be axed?
We all know that they’re never going to be certified, so why pump more time and money into them?
Ortberg just said on CNBC that it’s better to do a smaller portfolio well than to do a larger portfolio sloppily.
I think that’s a good question.
#dismantling
LNA did an article months ago on the possibility of a HGW 787 and a 787F — far more sensible options than the never-ending saga (and financial black hole) of the 777X. Doesn’t matter that the 787 can’t completely fill the 777X’s shoes — time to just face up to reality.
And many/most MAX-7/10 customers can make do with MAX-8/9 alternatives instead. Time to get real and pull the plug on the whole “any day now” pantomime.
@Abalone
Most worrisome is that the latest earnings report does not even give an EIS prediction of the Max7 or Max10. If they were really that close to EIS…you would think Boeing would put that front and center.
I don’t know if Boeing would ever immediately cancel the entire 777X “at this point,” but certainly the 777-8P is fair game with an EIS beyond 2030 and no backlog.
So Boeing wants to sell the Space business?
Maybe Airbus would buy it?
Problem is that whenever Airbus buys something (Bombardier C-series, Spirit-Ireland) they only pay $1.
What possible use could Airbus have for the trainwreck at Boeing Space?
It could be an option as long term investment. It would expand their reach and benefit from combining human resources, knowledge, launch capacity. Just like Airbus aircraft & helicopters, that has serious plants in Maribel and Mobile and Texas.
Yes, and what use would Boeing have for the $1 Airbus would pay for it?
I didn’t intend this as a serious proposition.
Once sold — even for $1– BA would no longer have to pay salaries, rent or fines for the division in question.
I doubt if a foreign entity would be allowed to buy the Space Division. ITAR restrictions.
The only thing of value out of Boeing Space might very well be IP that none of us are aware of.
The Starliner has no real purpose aside from servicing the space station which is slated to be decomissioned within a decade.
‘Norwegian Air says its 737 Max deliveries from Boeing are “delayed more than one year”
https://x.com/ByERussell/status/1849793971129651308
https://pbs.twimg.com/media/GavJz0-WMAAECTs?format=jpg
has the IAM 751 ever given an official counteroffer to Boeing or is Boeing negotiating against itself?
Any attempt at moving Boeing from one position or another is met with a brick wall.
Boeing just drops offers and walks away.
Turns out Calhoun was right when he predicted $10b in yearly cash flow was just around the corner.
He never said it would be positive.
🙂
grass not always greener. I have pension forced contibute. When I die I can provide husband pension at lesser rate. But I am not able to leave kids ZERO. I would prefer be able to control funds, company contibute and I can leave 401k to anyone I want.
Smart! Flexibilty of 401k is big advantage.
Does anyone know who in Boeing has primary control of its negotiation process with the IAM? Ortberg? Pope? Some committee?
As far as we know it’s Pope. At least on the face of it.
Ortberg’s seeming lack of involvement is a very bad indicator.
Backing the notion is the noticeable use of the same old hard line anti labor negotiating tactics.
You don’t have the CEO sit in the all the negotiation meetings Does the IAM National President sit in the negotiations?
It’s not really about who sits in on the meetings, it’s about who is determining the Boeing position. Who decided the first offer would be 25% general increase, second offer bypassed union leadership, third offer 35%?
Ortberg? Pope? Mo? Larry? Curly?
….All of the above?
Anyone that thinks Pope is driving this bus could not be more wrong.
I doubt it Ortberg, I think he is (mostly) smarter than that. My guess is the Calhoun faction on the board.
The reason I don’t think Ortberg is so smart is that he could have negotiated full control from the board. If he did not, then that is purely foolish.
If he has full control then he is not so smart but I doubt he has full control.
If this strike is costing the company $50 – $150M / day you can bet that Ortberg is making the call.
Calhoun and the BOD. Pope is the head of the company negotiating team. Ortberg and Pope can’t make a move without Calhoun and the BOD approval. Calhoun is part of the problem and not the solution.
I thought Calhoun had resigned from the board- no?
Calhoun did resign from the Board.
@ Vincent
Think Rasputin: no real rank, but lots of influence.
Calhoun stated he would retire officially as CEO in December.The BOD elected him back on the board shortly after him announcing March 24 his plan to retire at the end of the year. From CNBC “Boeing shareholders re-elect departing CEO Calhoun to board
PUBLISHED FRI, MAY 17 202412:10 PM EDTUPDATED FRI, MAY 17 202412:46 PM EDT”
When Calhoun resigned on Aug. 8 as CEO, he also resigned from the Board.
https://www.boeing.com/company/general-info/corporate-governance#board
You are correct. My error. Read an article back a ways where it was stated he would remain as a special advisor to the board thru March 2025. Mistook that to mean he would remain on the board until then.
Some of these comments regarding Calhoun…
When a CEO is axed it is customary for that person to be retained in an “advisory” role. It is not that anyone actually expects Calhoun to do meaningful work but that there is a need for a smooth transition that will require his input from time to time. The moment Calhoun stepped down his functional role at Boeing ended. He may have been involved in a handful of meetings for upwards of a month, but I severely doubt that he has acted in any meaningful way during this strike.
Think of it more like a retainer.
I understand the confusion.
When Calhoun resigned as CEO back in August the first reports I read didn’t mention any change to his status on the board, so I thought he had retained his membership. Only later did I read reports that he had resigned.
Even though Calhoun is totally gone he made a concerted effort to ensure that his neutron Jack beancounter “cash flow Uber alles” mentality lives on. He abruptly promoted Pope from mid-level obscurity to the top of BCA. Why? Best explanation is that she is his mini-me, happy to continue his reckless cost cutting and commitment to not developing a new plane. Plus Calhoun had years to stack the board with cash flow beancounters. Some were replaced but I think others remain.
I too am confused.
The group that made recommendation recommended he not be retained.
The board voted to retain him.
So he is gone anyway? No wonder we are confused.
A contrarian sound in this debate:
Forbes: “Boeing Workers Want Their Pension Back. Here’s Why The Company Should Consider It.”
https://www.forbes.com/sites/jeremybogaisky/2024/10/25/boeing-strike-pension/
Good article. TFTL.
If I were a Boeing machinist I would prefer a 401k type pension. If the company goes bankrupt they can take that money with them. The old defined benefit plan would wind up going to the Pension Benefit Guarantee Corporation. That could reduce the expected pension by more than half.
The company’s latest 401k offer included an automatic company contribution of 4% of total annual pay plus a match of employee contributions up to an additional 8% and a one-time $5,000 contribution to the retirement plan of each machinist. That plus Social Security will make for a very nice retirement.
for the sake of variety
“PM to inaugurate Tata-Airbus C295 aircraft plant on Monday; facility set to bag orders for 12 more planes soon”
As the IAM 751 keeps chasing their “defined pension ghost”, Airbus keeps expanding their global presence
“Local components in the India-made C-295s will rise to as much as three-fourths from about half now, they said.
“The move comes as India aims to reduce its dependence on foreign-made equipment, especially from Russia. Moscow remains New Delhi’s largest weapon supplier despite a drop in recent years, according to the Stockholm International Peace research Institute, an independent thinktank that tracks weapons trade.
“In addition, Russia’s invasion of Ukraine has delayed weapon supplies to India affecting defense preparedness and adding greater urgency to locally produce weapons. ”
https://www.bloomberg.com/news/articles/2024-10-27/india-beefs-up-defense-production-with-airbus-plant-in-gujarat/
India is a very interesting country for Airbus, and particularly for Embraer (it might also be for Boeing, if that company had a future).
The country is friendly with the West, but also with BRICS, it is industrially capable, it has a young (and relatively cheap) workforce, is a huge market, and is undergoing impressive growth.
I’m wondering when AB will announce an A321 FAL there…
You are right about “when” for the A321 FAL One of the issues in India is the lack of second and third tier suppliers to support production processes One needs to have all production capabilities within their facility. (e.g. secondary metal processes)
Airbus style FAL line is a LEGOs click together assembly process .. plus a paint department.
( The thing Boeing tried to cargo cult copy for the 787 line. 🙂
Stock and subassembly production is another venue.
Actually, IAM 751 District President Jon Holden is Airbus’s best sales person! Keeps weakening Boeing financial and marketplace presence with chasing his “hell-bent” mission for a defined pension plan
In about 5 years it will be an interesting “case study” on how a small group of IAM 751 leadership put the final “nail in the coffin” for the US commercial aircraft industry
I think you can stuff your “Dolchstoßlenge” somewhere out of sight.
Boeing need to turn around their process towards a profile that is able to perform as required for Transport Aircraft manufacture.
If they have to increase outlay .. so be it.
Unwilling to spent money currently destined for management gratification ( poof ) on workforce motivational aspects demands closing shop in a corporate sunset.
From the US commercial aerospace industry to IAM 751 local President about wanting a defined pension plan
“Its time to let go”
https://www.youtube.com/watch?v=fV0ApOOSGBc
on another note, does anyone know the number of completed Boeing aircraft for Chinese airlines (e.g. 737 and 787) that are sitting Boeing’s “storage parking lot”? In less than two weeks, those aircraft may never see delivery to China!
I wouldn’t be too sure about deliveries destined for other countries, either.
If mass tariffs and countertariffs start, all bets will be off.
Your right…be interesting to see how many Boeing orders are in backlog for parts of Southeast Asia…meaning China, Vietnam, Malaysia and Singapore
@Pritchard
Latest report indicated 60 737-8 still in WIP of old inventory (45 earmarked for China). It also indicated 30 B787 but did not elaborate on ultimate destination.
Boeing was actually burning down that 737 inventory at about 20/mo clip. You can do the math on how muc longer it would take. The B787 is still hard to get my head around where that production is going to be.
If Boeing is actually trying to hit 38/mo deliveries then in reality that is a jump from ~10/mo to 38/mo. 4X increases have an obvious supply chain quality risk.
I wouldn’t bet on (anywhere near) 38 MAX per month anytime soon — just the other day, the FAA announced yet another impending safety review of BA:
https://www.theguardian.com/business/2024/oct/18/new-boeing-faa-safety-review
And, since that review was announced, yet another safety-critical single point of failure was disclosed in 820 delivered MAX:
https://simpleflying.com/faa-issues-advisory-directive-address-boeing-737-max-spcu-design-flaw/#:~:text=MAX%20EAI%20issues-,Single%20point%20of%20failure,internal%20failure%20in%20the%20SPCU.
In other words, the unadulterated mess is nowhere near over.
Bloomberg reports Boeing to raise more than $15 billion of capital as soon as Monday,
PR damage control? Any comforting words yet from Ms. Pope?
“I exist; I promise! and I have a degree from SW Missouri State!”
What an outfit.. / this will not end well.
And that $15B is to comprise stock AND convertible debt.
Further, the figure of $15B may rise further, depending on demand.
So, BA is taking on even more debt — despite being warned by ratings agencies that doing so would lead to a downgrade to junk.
https://finance.yahoo.com/news/boeing-plans-launch-effort-raise-022717807.html
Re-arranging deckchairs on the Titanic.
from Reuters
“Boeing on Monday launched a stock offering that could raise up to $22 billion as the planemaker looks to strengthen its finances squeezed by an over month-long strike by its workers and preserve its investment-grade credit rating.”
on another note, its that time again for the IAM District 751 striking workers to write another check for November’s healthcare premiums!
How much longer will the 717 fly? Five years? Ten years??
“Qantas’ Boeing 717 has just operated its final commercial flight in Australia. Only 2 operators of the aircraft now remain.
https://x.com/flightradar24/status/1850075823652397183
@Pedro
Good question…look no further than Delta Airlines…the home of wayward aircraft programs. They have 88 in service (over half of the fleet ever delivered) with no stated retirement date.
Best guess is another 10 years given how long they held onto their MD80/90 fleet.
It’s interesting:
DAL still has an outstanding order of 74 A220-300, to be delivered over next four years or so.
I notice on planespotters that, it looks like DAL had 4 B717 from BBC (all ex-Volotea) in 2023 but NTU. All four are reportedly going to HAL but do not appear on HAL’s fleet page yet, eg: https://www.planespotters.net/airframe/boeing-717-200-n728bc-hawaiian-airlines/34v6x3
All 717s from Qantas were sold to “another major carrier” though I believe they are collecting dust right now.
A lot depend on how many parts the remaining two operators have stocked up, how much they are willing to pay to suppliers and when suppliers determine it’s not profitable any more to maintain supply.
Maybe for part-out to supply the in-service fleets?
Hi Scott
You mean ex-Qantas 717 or ex-Volotea 717?
@Pedro
DAL ascribes to the philosophy that you can afford to buy a lot aviation fuel when your aircraft (and MX) are otherwise free. They can probably nose around and buy old aircraft…raid them for parts and warm over their existing B717 fleet. Since there is no other meaningful operator base, the aircraft are being sold at relative salvage value. Better yet…the B717 fleet is not “ancient” it was just a commercial disaster along with the 737-600 and A318. These are aircraft with a measure of life left in them.
Emirates will be well served to take note for their A380 fleet.
Oops sorry
had 4 B717 from BCC*
‘Boeing’s Shareholders are Complicit in Its Mess’:
https://www.bloomberg.com/opinion/articles/2024-10-28/boeing-shareholders-are-complicit-in-its-mess
https://www.seattletimes.com/business/boeing-aerospace/boeing-launches-19-billion-share-sale-to-thwart-downgrade/
Absolutely. I have said this for some time. Where are the big mutual funds; the ETFs that hold millions of the company’s shares? Where’s CALPERS and all the other pension funds that hold these shares in their portfolios? The big family positions? I am dumbfounded that they are so silent. Are their managers beholden to the CEOs of Boeing? Are they that wealthy that all their other holdings make up for the terrible performance of Boeing? I give Elliot Group credit for going after the misguided men at SW. I am not a private equity fan, but I can’t help but wonder if this is where this is headed…
Like I am going to loose sleep over someone’s opinion in Bloomberg.
Boeing executing poorly (probably an insult to the word poorly) on 787 and 737 has nothing to do with stock buybacks. Boeing executes those two programs properly, this whole conversation is null and void.
I do blame Boeing management for that.
Maybe you can’t see it — but the rest of the world can 🫣
“Boeing’s Decline Traced to Decades of Catering to Shareholders Above All Others”
“Boeing’s leaders delivered gushers of cash to shareholders through stock buybacks and dividends — $68 billion since 2010, according to Melius Research — rather than investing in future all-new airplanes, such as pulling forward airline cash advances.
“Many factors have contributed to Boeing’s decline. One notable change has been the company’s broad divestment of assets to please investors. One example was the sale of Spirit AeroSystems, its main aerostructures operations in Kansas. Intended to cut costs, Boeing now outsources this work to Spirit AeroSystems, which has weakened it’s quality control. ”
https://bhr.stern.nyu.edu/quick-take/boeings-decline-traced-to-decades-of-catering-to-shareholders-above-all-others/
“Shareholders, however, deserve some of the blame for management decisions. Boeing was rewarded with gains in its stock for its capital- return policies. From the end of 2013 to the end of 2018, Boeing stock returned about 20% a year on average, according to Bloomberg. Airbus stock returned about 10%.”
https://www.barrons.com/articles/boeing-stock-price-737-max-b8aee149
“It’s difficult to get a man to understand something when his Salary depends on not understanding it.”
-Upton Sinclair
Haha retail argued that both the 737 & 787 programs were “poorly” executed but bought the stock anyway. That must be the most logical way of investing!!
May be that’s one of the reasons why the stonk is still at above $150 after a 15% plus (more is coming) dilution.
“700 Spirit AeroSystems workers begin 3-week furlough”
https://www.kwch.com/2024/10/28/700-spirit-aerosystems-workers-begin-3-week-furlough/
Southwest Airlines CEO: ‘We need Boeing to be better’
“”We started the year expecting more than 80 aircraft, and we’ll get 20 this year,” Jordan said. “And with the strike lingering on, you know, it looks like 2025 could be affected as well.”
“The stoppage has forced airlines to update their flight schedules and increase maintenance to maximize the longevity of their existing fleets.”
“Jordan said that Southwest planned for the strike to last four to six weeks. As the strike continues beyond that timeline, he continued, it’s likely to put pressure on the airline going into next year.”
This was a good summation of the finanaial sheanaigans. Mostly I understand it but it sounds like more borrowing for part of it.
https://wolfstreet.com/2024/10/28/boeing-launches-22-billion-share-offering-to-get-some-breathing-room-dodge-junk-credit-rating-after-having-wasted-64-billion-on-share-buybacks/
All that buy back money and nothing to show for it (well a melted down Boeing)
As far as the Union, give them more into the 401K and the 40% and I suspect it will be approved. Give the Union enough carrot to bear with the stick.
As per the above two comments: I don’t know if they can do better. In reference to the ability of this CEO to do a “Culture Change.” I don’t know if it can be done. The divide may be as wide as the divisions that are now present in the country. At some point a contract will be signed, but that may be far from a change in the relations between labor and management.
Maybe one important move would be to have management put more company stock in the deal, and but a member of the union on the board. But are these people capable of taking these gigantic steps…
Trans
You are probably right on your numbers But until IAM District 751 President puts his rubber stamp on the deal, it will not get approval Jon “Hell-Bent” Holden is still chasing his define pension ghost
cheers Dave Pritchard
At this point Holden’s opinion is only mildly interesting.
If Boeing coughs up a 40% raise but no pension…he will bring that to a vote and the membership will vote accordingly. I always thought a union president’s endorsement was an unnecessary element.
Holden decides if a proposal gets voted on at all…so he does have a measure of power.
Given his recent actions, I’d tend to look askance at Holden issuing any ‘yes’ vote recommendation.
IOW, I’m not sure serving the IAM rank-and-file is
foremost in his thoughts.
Holden can and likely will get voted out. Its really not in his control regardless
Boieng has to sweeten the offer, more into 401K, signing bonuses, 40%, all of the above.
Boeing is better when there is no strife but they have done the strife as well so its the difference between better and getting by. If they go back to work Boeing may be able to get buy (all that financial crud to deal with)
We know there will be an offer. If Holden refuses then lots of pressure including courts.
I don’t believe the rank and file care what he says anyway. They will make up their own minds.
Boeing moved over 30% on the last offer, try again.
Reuters: “Airbus to deliver first A321XLR on Tuesday, sources say”
“PARIS, Oct 29 (Reuters) – Airbus (AIR.PA), opens new tab is preparing to make the first delivery of its longest-range single-aisle jet, the A321XLR, to Spanish airline Iberia later on Tuesday, industry sources said.”
https://www.reuters.com/business/aerospace-defense/airbus-deliver-first-a321xlr-tuesday-sources-say-2024-10-29/
More quality issues with aviation workers in USA:
“Vendor troubles slow delivery of Amazon freighter aircraft”
“Airbus cargo conversion program in Alabama an ‘unmitigated disaster,’ leasing company says”
“In an interview earlier this year, EFW Chief Executive Jordi Boto acknowledged shortcomings with the production process at sites in San Antonio and Mobile, Alabama, which he attributed to subpar training and workforce shortages stemming from the lingering effects of aviation industry layoffs during the COVID crisis. He said the company planned to relocate freighter conversion work to facilities in Asia and Europe until training and recruiting could be brought up to standard.
“Final work is being carried out on the remaining aircraft at both modification sites, and no more conversions will be carried out in San Antonio and Mobile in 2025, EFW spokeswoman Anke Lemke said in an email last week.”
“The company intends to bring back conversions to the U.S. in three or four years once it revamps the entire production and labor process, including recruiting and training, and figures out how to create a strong work culture rooted in quality. The best way to attract and keep good technicians is to set up a training academy or work with technical schools, he said.”
https://www.freightwaves.com/news/vendor-troubles-slow-delivery-of-amazon-freighter-aircraft
So many posts here say:
BCA can move to the “South” and fire up a workforce to assemble their 737/777-9 in no time. 😂
Good old southern hospitality… 🍷
So you can people and you expect what?
Snippet from your article:
“EFW’s problems appear to be limited to U.S. facilities. Rimmer said one of its aircraft was inducted at a Chinese installation site that had never done an A330 conversion before and was finished ahead of schedule. […]
Conversions at sites in China have been markedly different and significantly better managed. The results are very evident.”
😂
Must be fake news.
After all, various commenters here have repeatedly assured us that China’s aviation industry is primitive compared to that in the West…right?
One wonders if the Chinese workers left any tequila bottles in the frames…
😂
Must be those Motai that make their work so impressive 😂
😉
them dern comm’nists..
No wonder BA wants to quit
“It seems increasingly possible in the new space race that China sends astronauts to the lunar surface before NASA is able to return, a factor that should get some attention in the space policy of the incoming administration.”
https://x.com/wapodavenport/status/1851448154069070064
I fully expect a storm is coming with a man yelling at cloud
Abalone:
As usual you do a mis quote and try to spin it. I call nonsense on you (actually a lot more fragrant than that but we have posting rules). You deliberately mis quite, that is truly Pathetic.
Private employed Chinese companies can be very effective and produce world class goods, often Western owned and tech supplied by same.
It is your beloved Communist Run enterprises that are the dinosaurs in the mix. You know, the ones that need two brains just to chomp vegetation.
Another snippet from the article:
‘EFW needs to do a better job of providing management support to partner facilities and monitoring their progress, he acknowledged.
“We have to change the way we support the sites. [Before,] we were delivering them the job cards, the technical documentation and the conversion kits. Now we have to be much more on-site. We have to send work parties to fully train them and work alongside them in critical phases of the conversion. ‘
In overseas sites, job cards, tech doc and conversion kits are sufficient, but over in the US, workers need someone in person to show them how to do it.
“54% of US adults have a literacy below sixth-grade level.”
“21% of Americans 18 and older are illiterate in 2022.”
https://www.crossrivertherapy.com/research/literacy-statistics#:~:text=Top%2010%20U.S.%20Literacy%20Rate,older%20are%20illiterate%20in%202022.
One wonders what the literacy rates are at (shopfloor level at) US companies like BA, LM and PW.
If there’s a basic inability to read job cards and technical documentation, then it’s “game over”.
LNA should do an article on this.
That complements the experience of other non US manufacturers in the US: You have to select and train from zero your workforce carefully.
Avoid union controlled states.
Look at Airbus workforce qualifying processes for Mobile.
The method appears to be successful.
EFW, as an Airbus daughter, should not have run into that limitation!?
An interesting Tim Cook interview in 2017 that he talked about misconception ppl had:
“The popular conception is that companies come to China because of low labor costs.
I’m not sure what part of China they go to, but the China stopped being the low labor cost country years ago. That is not the reason to come to China from a supply point of view.
The reason is because of the skill, the quality and the quantity of skill in one location and the type of skill it is… ”
Watch it yourself.
https://x.com/ripplo/status/1138572753576058882
for the sake of variety
Indonesian TransNusa Airline flies imported ARJ21 to Guangzhou city, launching the model’s longest commercial flight
“In a civil aviation tradition the “water salute” splashed on the plane. The flight route, operated by TransNusa Airline of Indonesia, links Manado with Guangzhou”
“In addition, Bruneian Airlines has also expressed interest in operating the ARJ21. Brunei’s GallopAir signed a $2 billion letter of intent with COMAC last year to purchase Chinese-made aircraft.”
https://www.globaltimes.cn/page/202410/1322060.shtml
Nowadays, it’s C909…not ARJ21 😎
Related:
“Chinese planemaker COMAC opens Singapore office”
https://www.channelnewsasia.com/east-asia/chinese-planemaker-comac-opens-singapore-office-4709536
—
Wanna bet that COMAC will eventually use Singapore’s experience and network to (partially) handle after-sales service for COMAC aircraft?
Related:
“FDH Aero Announces New Contract Agreement For COMAC C919 Platform”
“Commerce, CA (GLOBE NEWSWIRE) – FDH Aero (“FDH”), a global provider of supply chain solutions for the aerospace and defense industry, announced today it has secured a multi-year contract with AVIC-XAIC Xi’an Aircraft Industrial Corporation (XAIC) to support China’s COMAC C919 passenger jet platform. AVIC-XAIC is one of the major sub-tier company which taking the work of Wing assembly and mid-fuselage for C919.”
https://www.aerospaceonline.com/doc/fdh-aero-announces-new-contract-agreement-for-comac-c-platform-0001
just a fyi,
“AVIC-XAIC is one of the major sub-tier company which taking the work of Wing assembly and mid-fuselage for C919.”
Those assemblies are automatic fastened (riveted) on western equipment (e.g. Gemcor and Electroimpact)
All Chinese owned or controlled entities.
Sounds like a plan with Singapore being the western service and spare part center for C909 and C919
Similar strategy that Russia Sukhoi did with Sukhoi Superjet with Italy
That worked out really well
I am not generally a fan of re-naming- it usually being some form of subterfuge- but this one makes some sense.
An overview of the commercial passenger aircraft market
in say ten years will be most interesting.
Will Edsel- sorry, I meant Boeing- still be a player then?
More international flights of the C909 (ARJ21):
“Chengdu Airlines already uses the ARJ21 on international routes from Harbin to Vladivostok in Russia and from Kashgar to Khujand in Tajikistan. China Southern Airlines plans to start flying from Guangzhou to Brunei at the end of this month using the ARJ21.”
https://www.yicaiglobal.com/news/indonesias-transnusa-makes-manado-guangzhou-maiden-flight-using-china-made-arj21-plane
You mean that these countries are simply ignoring the lack of FAA cert for the C909?
What a shocker! 🤭
Oops 😬
Equatorial Congo Airlines ordered 3 C909 (ARJ21), with delivery soon
https://aviacionline.com/2024/09/c919s-global-push-comac-explores-new-offices-outside-china/
“China’s homegrown regional jetliner, the ARJ21, successfully completed its longest commercial route flight Tue, landing in Guangzhou, China, from Manado, Indonesia. It is also the 1st China-bound international flight operated by an overseas airline using the Chinese aircraft.”
https://x.com/China__Focus/status/1851480901181751417
It looks like the 150th ARJ-21 got delivered today Oct 31 to China Southern, the third ARJ-21 in October.
BTW a major fire has broken out at the BAE Systems nuclear submarine shipyard in Cumbria.
“Comac opens new Hong Kong office, signs jet supply-chain support deals Planemaker plans to set-up a global sales and support base to drive purchases of the C919 [& ARJ21]”
https://x.com/GulfNewsBiz/status/1852017698718560306
“HAECO has signed an MOU with SACSC, a subsidiary of COMAC, to collaborate on a range of airframe, engine, and component services that will help meet the growing maintenance needs of COMAC platforms, including the ARJ21 and C919.”
https://x.com/HAECO_Group/status/1851814363277259129
Interesting example of the total pointlessness of imposing sanctions against China — both candidates in the US election should take note:
“China’s Semiconductor Leap: Xiaomi Unveils 3nm Chip Without EUV Technology”
“The announcement, made by Tang Jianguo during a Beijing TV broadcast, places Xiaomi among the select group of global tech companies capable of developing 3nm chips, a feat that was once thought to be at least a decade away due to stringent U.S. sanctions.”
https://www.thedailyscrumnews.com/chinas-semiconductor-leap-xiaomi-unveils-3nm-chip-without-euv-technology/
BA’s tips for maintaining good relations with important customers…
“Boeing overcharged Air Force nearly 8,000% for soap dispensers, watchdog alleges”
“WASHINGTON (Reuters) – Boeing overcharged the U.S. Air Force for spare parts for C-17 transport planes, including marking up the price on soap dispensers by 7,943%, according to a report by a Pentagon watchdog.
“The Department of Defense Office of Inspector General said on Tuesday the Air Force overpaid nearly $1 million for a dozen spare parts, including $149,072 for an undisclosed number of lavatory soap dispensers from the U.S. planemaker and defense contractor.”
https://finance.yahoo.com/news/boeing-overcharged-air-force-nearly-171913511.html
—
No wonder the US “spends” so much money on “defense”.
That’s why TW always believes BDS will be able to make $$ in the long run!!
A license to print $$!
Read this, kinda shocking but not totally shocking, we’re talking about the MIC here.
https://pbs.twimg.com/media/GbD4fkjWEAAL05k?format=png&name=900×900
From your article:
“The Inspector General also noted it could not determine if the Air Force paid a fair price on $22 million of spare parts because the service did not keep a database of historical prices, obtain supplier quotes or identify commercially similar parts.”
You know, those from the USAF know how to cover their tracks!
Bit of a chronic pattern here. From 2021:
“Boeing charged Japan 1,500% markup on plane part, U.S. Air Force says”
“Boeing Co. charged the Japanese government an “excessive” price for some spare parts for its refueling tanker plane, as much as 16 times more than the U.S. Air Force paid for its latest versions, according to a service assessment.”
https://www.japantimes.co.jp/news/2021/06/08/business/boeing-charge/
Into the grifting and looting stage??
Surreal! I almost mistook this coming from the Onion:
“Pentagon’s commercial satellite internet services program soars to $13 billion”
Is there an extra zero misplaced??
Oops sanctions hit US drone maker!
Oh, I’m sure the right palms are getting greased to facilitate
these utterly normal, totally above-board purchases.
Check property prices in NOVA, as a hint.. 😉
WaPo March 2019
“The close relationship between the Pentagon and Boeing is part of a long-standing revolving-door culture in which senior defense officials move back and forth between jobs in government and with defense contractors.”
https://www.washingtonpost.com/business/economy/us-and-boeing-have-long-had-a-special-relationship/2019/03/16/abcebe8a-475a-11e9-aaf8-4512a6fe3439_story.html
Even when it’s at Death’s Door, BA still manages to fill the punch bowl on Wall Street:
“BANKS TO MAKE NEARLY US$400M IN FEES FROM BOEING’S JUMBO US$24.3BN EQUITY RAISE – BANKING SOURCES”
https://www.ifre.com/story/4921516/banks-to-make-nearly-us400m-in-fees-from-boeings-jumbo-us243bn-equity-raise-banking-sources-jxgxvlflfn
That’s in addition to the 7.7% discount that the (institutional, OTC) buyers got relative to the common stock price at Friday’s close.
The gravy train is still up and running 🍾
BA CFO pulled off an impressive fund raising exercise (while WFH??).
I wonder if the (potential) sponsors did help to stabilize the stonk over last couple of weeks in order to win the mandate.
I’ll bet there’s quite the backstory to be found behind this BA stock “offering”.
IAM striking workers over 6 weeks have lost about $400m in wages, might be time to tell Jon Hell-Bent Holden to agree to the Boeing offer
Would that not be for the IAM 751 strikers to decide? Right now there is no Boeing offer on the table- if you have not noticed.
I support the IAM 751 rank-and-file.
So “Boeing” pulled the latest offer off the table after the IAM rejected it? (so they are back at ground zero after 6 weeks of negotiations) At the end of the day, the IAM 751 district for doesn’t pay wages, Boeing does as their employer!
I don’t know what IAM “for doesn’t” [sic] do, bro; and right
now Boeing is certainly not paying the 751 members’ wages.
“Scooplet: Two top FAA officials are set to depart the agency by year-end — David Boulter (head of aviation safety) and Marc Nichols (general counsel).”
https://x.com/willguisbond/status/1851318093236011156
Two top FAA officials to depart agency by year-end
https://t.co/d0jP5OWvFg
where is their next touch down?
‘Boeing and machinists union resume talks, Tuesday’s parlay described as “productive”
https://x.com/AirEVthingTRNSP/status/1851494141139853478
Boeing, Union Hold ‘Productive’ Talks in Attempt to End Strike
https://www.bnnbloomberg.ca/investing/2024/10/30/boeing-union-hold-productive-talks-in-attempt-to-end-strike/
Exceeds Calhoun’s $10 billion cash flow and ahead by a year! 😂
BNN:
“Instead of generating cash in the fourth quarter, the company now expects to burn through around $4 billion, which would bring total outflows for the year to $14 billion. “
“Boeing has $55bn in liquidity to carry it through a long strike, if necessary—far more than the IAM has today.”
Hrm!
How much $ per day does Boeing burn
How much $ per day do the strikers need.
Definitely not 1:1
BA raised say over $20 billion, has roughly (IIRC) $12.5 billion debt due in say next 18 months or so, need to buffer for additional cash outflow as soon as production restarts and ramps, how long the runway do they have, in front of (not behind) them?
Well the point in my post was that comparing
“money to burn” in absolute numbers ( Boeing vs IAM )
is unsuitable.
You need to look at outlay per day for each.
33k workers on strike, assume $100k per head and year
= ~~ $10million per day.
Boeing lost $6billion in Q3 3with a strike going just for the last fortnight.
= ~~ $60million per day.
I meant BA doesn’t have a v long runway ahead
Current forecast is BA will have a cash outflow of ~$4 billion this quarter
Here in the US we don’t have “fortnights”.
We have “a couple of weeks” instead.
As you noticed I don’t live in the US.
so why should I go with the minority vote?
How the revolving door at FAA spins Boeing’s way
https://x.com/dominicgates/status/1851635747771887827
https://t.co/D7lyaTW64P
Saudi startup Riyadh Air orders 60 Airbus A321neo planes
“Saudi startup airline Riyadh Air has ordered 60 Airbus aircraft, the European aerospace manufacturer said Wednesday.”
“BREAKING: Airbus announces succession plans for its commercial aircraft unit. Current MTU CEO Lars Wagner will join Airbus and follow current chief Christian Scherer after “finalizing his term” at the German propulsion supplier. No date for the transition is given.”
https://x.com/jonostrower/status/1851673486869368953
Airbus Picks Successor for Jetmaking Arm, CEO Stays On
https://money.usnews.com/investing/news/articles/2024-10-30/airbus-third-quarter-profit-rises-keeps-full-year-targets
“Airbus Keeps 2024 Delivery Goal Despite Supply Chain Woes”
“(Bloomberg) — Airbus SE reiterated its goal for 770 aircraft deliveries in 2024, sticking to the closely watched target despite supply-chain glitches that have weighed on the planemaker’s ambitious plans to boost production.
“The European manufacturer maintained the target as it announced third-quarter adjusted earnings before interest and taxes of €1.41 billion, according to a stock exchange filing. That topped the €1.21 billion average of analyst estimates compiled by Bloomberg.”
https://www.bloomberg.com/news/articles/2024-10-30/airbus-maintains-2024-delivery-goal-despite-supply-chain-woes/
“Airbus proposes to renew CEO mandate and announces Commercial Aircraft leadership transition
https://x.com/AirbusPRESS/status/1851673936557170918
from Leeham News article
Five years to produce 737s at 50/mo, consultancy predicts
If true, you don’t 33k IAM workers back right away. Slow ramp with better quality controls is the path……….start out 20k IAM workers with 20 a month production rate for 737
HAECO and COMAC set up partnership to explore MRO services
“Aircraft engineering and MRO services provider HAECO and Shanghai Aircraft Customer Service Co. Ltd. (SACSC), a subsidiary of Commercial Aircraft Corporation of China (COMAC), have signed a Memorandum of Understanding (MoU) to collaborate on airframe, engine and component services.”
https://www.aviationbusinessnews.com/mro/latest-news-mro/haeco-and-comac-set-up-partnership-to-explore-mro-services/
One day longer, Another day Comac gets stronger
Not from TC!
Emirates Says Jet Delays Are Disrupting Its Plans for Growth
https://www.bnnbloomberg.ca/business/2024/10/31/emirates-says-jet-delays-are-disrupting-its-plans-for-growth/
I guess Sir TC bet on the wrong horse with 777x
“Emirates is spending $4 billion overhauling its existing fleet of Airbus A380 double-deckers and Boeing 777 jets
The delays are creating a disruption to the airline’s growth plans and there is a shortage in capacity coming along the way, Kazim said. The date for entry into service of the 777X “has gone through many alterations in the past,” that the airline could no longer expect a clear time line for when it will join the fleet.
This month, Boeing said that it would push back plans for the 777X’s entry into service by another year to 2026 due to ongoing certification issues. The model was first scheduled to be delivered in 2020. Emirates has orders for over 200 777X, almost half the model’s total backlog. “
maybe the drama is over and Boeing can get back producing commercial aircraft
“The new proposal includes 38% general wage increases over four years, up from a previous offer for 35%, bringing the compounding pay increases to close to 44%, the union said Thursday. It also gives workers the option of a $12,000 one-time ratification bonus or to choose a previous offer for a $7,000 ratification bonus and a $5,000 401(k) contribution.”
You need to give credit to the IAM negotiating team for their win But they won the battle for this contract but time will tell if they (Seattle) lost the war on how much mfg. content will be in Seattle for the next commercial aircraft launch (if it ever happens.) If you gives grades like they do football games
IAM A- may have push to hard and cost them a FAL in Seattle for a new aircraft
Boeing C finally got it done
Only 3% more money than the one just rejected by 64% of the voter? I would have thought they would throw a few more bucks in the pot to be sure that 15% of the voters will swing from ‘no’ to ‘yes’.
Is management is seeking asymptotic convergence to a 50 ‘yes’ solution?
So them the next vote is 57% ‘no’, and the revised offer increases general raise to 39.5%?
The following vote will be 53.5% ‘no’, so the offered raise goes up to 40.25%.
The next vote is 51.75% negative, and the offered raise goes up to 40.625%.
Etc, etc, etc…….
Just seems like the biggest fear of these guys running BCA = Beancounter Commercial Aviation is paying anyone a nickel more than the absolute minimum required (aside from management of course).
what will be a grade 10 machinist straight time pay be in 10 years when they launch a new commercial aircraft (when in 4 years it will be $140k without OT)
Agree, Seattle is high cost of living area, but how can a company afford pay $200k ST for a machinist (in 10 years) IAM just priced themselves out of any major work content in Seattle for a new commercial aircraft
While many contributors of this board poke on SC 787 FAL decision, maybe the executives got it right years ago
Agreed that Seattle has become a tech hub with the associated cost of living. If Boeing were just starting to manufacture commercial aircraft it would not locate new factories in Seattle due to the cost.
However, it was only a few months ago (June) that we were entertained by the spectacle of disgraced, hapless ex-CEO Dave “Cash-Flow” Calhoun being publicly humiliated and eviscerated by, among others, the Republican senator from the McDonnell Urheimat of Missouri.
When asked about the recent quality failures on the production line he said it was mostly due to the untrained workforce. This means that the company failed at employee retention, which was partly due to recent efforts to get senior employees to take early retirement. If management recognizes that employee retention has a positive value, then it should be willing to pay for that value. A factory with experienced and well paid employees will help avoid another Alaska door blowout disaster.
Also, let’s not forget that from 2010 to 2018, while management was squeezing employees and vendors in the McNerny – Calhoun beancounter death grip, it dumped $64b on the shareholders in buybacks and dividends.
The only action taken by recent CEOs that could be called “smart” was resigning. Collectively they were an unmitigated disaster.
from Seattle Times
“New Boeing CEO Kelly Ortberg this week intervened directly in the negotiations with the Machinists and personally delivered a tough message: If striking union members on Monday reject the company’s latest offer, the next contract proposal will be less generous, with potentially serious consequences for the future.”
“While Boeing did not specify what would be taken away from Thursday’s offer if it were to fail, Holden said that could mean cutting any number of gains, including canceling a commitment to build the next airplane in the Puget Sound region, backing away from a 38% wage increase or losing a 1% decrease in health care costs.
“They said anything’s on the table,” said Holden, president of Machinists union District 731. “They are looking at other options.”
The tone changes when you have a $20B+ infusion of cash. I certainly dont work at the IAM, but there is a time when you take your winnings off the table. Not sure how much that extra 2% to get to 40% is worth it, and you were never getting that pension back.
I have to believe a lot of Ortberg’s words are empty threats and they certainly don’t help his stated objective to reset the culture, but there is little left worth fighting over.
I will say this another way, if this had been the initial offer it would have likely been approved the first time.
“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.”
― Rahm Emanuel
Scenario…closing of Everett in 5 or so years Based on having profitable product lines and other factors
1. 777x is cancelled (not profitable…need to write off development costs)
2. 767 tanker…ask the US government for more money per aircraft for the current contract and on the new bidding lot, price for profit or let the other guy get it If you get the new order, move to a new separate building in SC for Tanker FAL and two new stand along riveters to support 1-2 a month rate
3. 777 freighter end production, move to just offering 787 freighter…close down 777 production (wings and FAL)
4. 737 FAL (second line), just build a new building in SC for 737 FAL and ship the wings from Renton and fuselage from Wichita
If its not profitable, don’t take on the project!
If Boeing remains under the vice-grip control of the Jack Welch beancounter mentality of selling off the future to boost the stock now, the most likely scenario 20 years from now is that Boeing is not building commercial planes anywhere, neither in Seattle nor South Carolina.
Will the latest offer with 38% raise be accepted. Suppose we try to predict the vote based on results of the previous two votes. The simplest model is linear extrapolation. To simplify consider only a single variable, the general wage increase. We have two data points from previous votes: (x,y) = (% raise, % yes vote) = (25, 5) and (35, 36) The line through these two points has a slope of 31/10 = 3.1, so additional % raise to increase yes votes by another 14% is 14/3.1 = 4.5%.
So simple linear model predicts that wage increase required to reach approval is 35 + 4.5 = 39.5%, and latest offer of 38% will receive only 36 + 3.1(3) = 45.3% yes votes.
Of course, there is no reason the vote has to follow a simple linear model. I would guess that a lot of the mechanics are simply getting bored with the strike by now. Much like the other pending vote, this one is hard to call
From Flight Global
Airbus expects to sign Spirit work-package acquisition contract before year-end
“Airbus aims to sign a contract by the end of this year for the acquisition of work packages currently managed by US firm Spirit AeroSystems.
The airframer previously signed a detailed binding term sheet setting out its plans to take over the A350 fuselage production in North Carolina and St Nazaire in France, as well as A220 work in various locations including Belfast.
“We have to get to a formal signing of the contract,” said Airbus chief financial officer Thomas Toepfer during a third-quarter briefing. “We’re expecting that to happen before the end of the year.”
“Airbus’s term sheet also detailed a $559 million compensation package from Spirit, to cover its absorption of loss-making programmes.
“[This payment] should compensate the negative impact that we will then have with those programmes before we turn them to being neutral,” says Toepfer.”
might be time to update Leeham news website
“That’s why since back before blogs – when they were called newsletters – Leeham News and Analysis has been following key developments in aerospace, principally of the “Big Four” OEMs – Airbus, Boeing, Bombardier and Embraer.”
to
That’s why since back before blogs – when they were called newsletters – Leeham News and Analysis has been following key developments in aerospace, principally of the “Big Four” OEMs – Airbus, Boeing, Comac and Embraer.
Thanks, David. Done.