Machinists want new Boeing contract ensuring work for decades to come

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By Dan Catchpole

Updated 2:35 p.m., March 4, 2024

The IAM 741 began promoting a strike fund for 2024 Boeing contract negotiations in 2019. Source: IAM 751.

March 1, 2024 © Leeham News: When representatives from Boeing and the Seattle-area machinists union start formal negotiations on Friday, the context will be a world apart from when they bargained the existing contract 10 years ago. Back then, Boeing management had a new airplane program (777X) as leverage and exploited an internal fight in the International Association of Machinists and Aerospace Workers to push through a concession-laden contract.

Now, Boeing is battered after years of self-inflicted crises, a pandemic and problem-riddled supply chain, and, after decades of defeats, labor has scored major victories around the country, especially in aerospace.

Head of District Lodge 751 Jon Holden told Leeham News & Analysis during a recent interview that he is determined to get back what was taken from the roughly 31,000 members he represents in the Puget Sound area.

The union wants better work-life balance, better pay and retirement benefits, and guarantees that will keep it healthy for years to come.

Given its ongoing struggles, Boeing can little afford to alienate the union representing the vast majority of people assembling its commercial jetliners, industry analysts say.

However, Boeing management and the IAM have had a rocky relationship since workers at the company organized in 1935. In the past 20 years, company leadership has taken a hard line against organized labor and repeatedly pushed for concessions despite banking substantial profits and spending billions on share buybacks.

Summary
  • Unions are resurgent in tight labor market
  • Analysts: Boeing can’t afford a labor unrest
  • Talks breakdown between SPEEA, Boeing over Tech and Safety Pilots contract
  • Boeing firefighters reject latest offer

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Analysis: Labor issues continue to challenge aerospace industry

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By Bryan Corliss

Sept. 18, 2023, © Leeham News – One of the continuing themes we’re hearing – at investor presentations and on quarterly earnings calls – is the shortage of skilled labor, which is disrupting deliveries up and down the aerospace industry supply chain.

The inability of suppliers to deliver parts on time – or to deliver correctly assembled parts – is hampering the OEMs as they attempt to ramp up production to meet high demand from airlines.

This is not just an issue affecting aerospace. There’s a general shortage of medium- and high-skill workers in the Western world right now, with shortages of every kind of worker from line cooks to truck drivers. Shortages existed prior to the Covid-19 pandemic, and there’s still strong demand, even with economies slowing as central banks move to tamp down inflation. 

The issue is more pronounced in industries that rely on high-skill workers – like aerospace.

One outcome of this worker shortage is a rise in union activism. In aerospace, we’ve seen the strike by the International Association of Machinists against Spirit AeroSystems this summer, and the near strike by members of the same union against Boeing’s defense business in and around St. Louis last year.

Next year, both Spirit and Boeing will be back at the bargaining table; Spirit to negotiate with members of SPEEA, the union for aerospace engineers, while Boeing holds talks with IAM District 751, which represents hourly workers at the company’s plants in Puget Sound and Oregon. 

IAM 751, in fact, is urging members to prepare for what it’s describing as a September 2024 contract vote that will “forever change the aerospace industry.” 

The environment seems to be favorable to the unions, for reasons we’ve discussed before. However, with the OEMs and Tier 1 suppliers heavily in debt (and currently bleeding red ink), there’s going to be a limit to what the companies will be willing to offer in a bid to satisfy their labor forces.

  • Demand for workers remains strong
  • Lack of skilled labor is hurting industry
  • Boeing, Spirit aren’t strong financially
  • UAW strike bellwether for next year’s talks

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Analysis: Spirit strike likely a sign of changing aerospace labor market

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By Bryan Corliss

Striking Spirit AeroSystems workers blow whistles in front of one of the factory gates./Wichita Business Journal photo

July 10, 2023, © Leeham News – In case anyone had slept through all the earlier alarms going off, the whistles and airhorns that sounded during the mercifully short-lived Machinists Union strike at Spirit AeroSystems should have been a wake-up call: 

This ain’t the 2010s aerospace labor market anymore. 

In the labor market of 2023, hourly workers don’t want to come in on weekends. They want raises, and they’re not interested in getting paid in stock. And don’t you dare think of cutting off payments for the prescription drugs their kids need to take to stay healthy.

All this is going to create a challenge for the aerospace industry. For the past two decades, executives have focused on growing profit margins by holding down marginal costs – especially labor costs. 

A decade ago, aerospace companies were able to win labor concessions by threatening to take work away

Today, it’s the workers who seem to have leverage, and OEMs are going to have to figure out how to keep them happy and productive, or explain to the Kirbys, O’Learys and Al-Baker’s of the airline industry why their planes aren’t getting out of the factories on time. 

  • Tide of outsourcing seems to have turned
  • Baby Bust: Fewer workers in the workforce
  • St. Louis, Wichita: Red state Machinists vote to strike
  • What’s next: SPEEA at Spirit, IAM at Boeing

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Boeing offers bonuses up to $10,000 as it searches for scarce talent

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By Bryan Corliss

April 17, 2023, © Leeham News: The Boeing Co., which has talked of making significant production rate increases “very soon,” is offering bonuses of up to $10,000 as it recruits workers in touch-labor positions in both South Carolina and Puget Sound.

In Charleston, Boeing is offering $5,000 signing bonuses specifically for experienced painters and interiors installers as it tries to first stabilize, then increase, production of 787s. Boeing wants to reach a rate of 5/mo by the end of this year and 10/mo by 2025/26.

In Puget Sound, the company isn’t offering signing bonuses, but it is offering hefty payouts of up to $10,000 to current employees who refer experienced aerospace workers to openings in a number of job categories, including structures mechanics and general machinists.

The moves come as analysts continue to sound alarms about workforce shortages across the industry. 

“We continue to remain cautious on the supply chain’s ability to support the planned production rate increases in 2H23 and into 2024,” wrote Ken Herbert, with RBC Capital Markets, in a report earlier this week. “We continue to see labor availability and training as the largest headwind facing the sector.”

  • Boeing hiring as it prepares to ramp up
  • Boeing offers hiring incentives
  • Northwest aerospace labor market is tight
  • S. Carolina: Lockheed-Martin offers $10K

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‘What kind of vision is that?’ Industry analysts scorch Boeing and CEO Calhoun

By Bryan Corliss

Feb. 7, 2023, © Leeham News – Less than a week after Boeing CEO Dave Calhoun stood in the company’s Everett factory and vowed to “maintain this leadership culture forever,” a panel of top aerospace industry analysts blasted Boeing’s corporate culture and criticized Calhoun’s leadership, saying he lacks vision, industry knowledge – even charisma.

Aerospace analyst Kevin Michaels.

“No new aircraft until 2035,” said AeroDynamic Advisory Managing Director Kevin Michaels. “What kind of vision is that?”

Having Calhoun at the helm of Boeing at this juncture is “the worst-case scenario,” said Michaels’ partner at AeroDynamic, Richard Aboulafia. “(Calhoun) is somebody not only not from this industry, but someone who maintains a willful ignorance of it.” 

The challenges Boeing faces mending fences with all the groups it has disappointed or alienated in the past 20 years – customers, suppliers, regulators and workers – are immense and it may be more than one person can handle, said Bank of America Managing Director Ron Epstein, who also was on the panel. 

“It’s a hard, hard, hard job right now, to be the president of the Boeing Co.,” Epstein said. 

  • Panel rips lack of new product development
  • Without a new airplane, whole industry is challenged
  • Panel: Boeing struggles to retain engineering talent
  • Michaels: Suppliers in ‘crisis’

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Boeing should build 757 replacement in Washington

Commentary

Dec. 22, 2020, © Leeham News: If you get a chance over the next few weeks – in between binge-watching The Queen’s Gambit, putting up the 79 extra feet of Christmas lights you ordered this year and figuring out how to buy surprise Christmas gifts for your spouse when you have a joint Amazon account – you should take 90 minutes to watch this video from our friends at the International Association of Machinists District Lodge 751.

By Bryan Corliss

The Machinists on Dec. 8 hosted (on Zoom, of course) a high-level panel discussion about the state of the aerospace industry and Washington state’s role in it, featuring a whole bunch of Brand-Name People Who are Smarter Than Me(c).

They shared their insights for those of us coffee-drinkers who are trying to read the tea leaves to divine what Boeing’s next moves should be as it tries to get back on its feet – and what the implications are for its home state.

The takeaway:

The problems for Boeing are obvious, and the solutions are pretty clear – but doing the smart thing would require a major cultural shift from an executive team that’s locked into a 1990s vision of how business gets done.

  • Boeing needs a 757 replacement this decade
  • It should get built in Washington state
  • There are concrete – and audacious – steps for the state to take
  • Can GE alum Calhoun change Boeing’s GE culture?

    Buzz about Boeing’s next new airplane returned this month to making a 757 replacement. Boeing photo.

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2024 will be key year for Boeing in Washington

This is the second in a series of articles examining how labor, Boeing and Washington state could move forward following the COVID pandemic. The first article is here.

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By Bryan Corliss

Analysis

Introduction

Nov. 30, 2020, © Leeham News — You might want to set yourself an Outlook calendar reminder for January 2024.

It’s going to be a pivotal year for Boeing, its home state and its workforce. By then, the company’s recovery from the current Covid-caused crisis should be underway, with the order book refilling.

The countdown should be on for the long-delayed roll-out of the reconceived NMA, at long last giving Boeing a real counter to the Airbus A321. And — barring a surge in 737 MAX orders after its return to service — Boeing could be close to making some tough decisions about the future of the 737 program, thinking hard about whether after 60 years it’s finally time to design and build a clean-sheet replacement.

Also by then, the 787 program will have fully consolidated into Charleston, and the last 747 will have departed the Paine Field flight line, leaving The World’s Largest Building (By Volume) half-empty.

Then, in January 2024, Boeing’s contract with its touch-labor union – IAM District 751 – will expire, after a 10-year extension that was part of the price Machinists paid to ensure the 777X would be assembled in Everett. For the first time since the summer of 2008, the two sides will sit down at a bargaining table with the union having the ability to call for a strike.

What happens between now and January 2024 will pretty much decide the future of Boeing in Washington state. If the players are clear-eyed and rational, we could see a return to the days when high-skilled workers built high-quality planes that created handsome profits for Boeing shareholders and family-wage jobs for Boeing workers.

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Gov. Inslee misses the point in his pique over Boeing 787 production decision

By Scott Hamilton

Analysis

Oct. 5, 2020, © Leeham News: The contrast in tones couldn’t be sharper.

With the announcement last Thursday by Boeing it will consolidate 787 production from Everett into Charleston, local political leaders were disappointed but understanding and even sympathetic.

Gov. Jay Inslee

Snohomish County Executive Dave Somers and Everett Mayor Cassie Franklin likened Boeing to a family member who was in crisis. Hard decisions by Boeing were made, but in a crisis, you must. Support your family. Understand the situation. Figure out how to make the best of it to move forward.

On the other hand, Gov. Jay Inslee vowed to review the state’s relationship with Boeing and tax breaks granted to the company. Inslee claimed understanding but his tone was hostile, defiant and angry.


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