Is Boeing’s BAFO really it? IAM rejects it and says no vote (Update) (2)

Update 2: Here is the red-lined union contract proposal from Boeing: Redlined-CBA-IAM751W24-Sept-23-2024 (1)

Here is a Boeing FAQ link.

By Scott Hamilton

Sept. 23, 2024, © Leeham News: Boeing’s Best and Final Offer (BAFO) today to its striking IAM 751 union membership for a new contract is a risky gamble.

The offer bypassed the local’s negotiating team and appealed directly to the membership. 751 leadership already filed a complaint with the National Labor Relations Board for alleged violations of collective bargaining laws for the same reason during the original contract negotiations.

Boeing risks a new complaint over its latest move, which almost certainly angered Jon Holden, president of 751, and the negotiating team. No comment has been forthcoming from Holden or 751, but the president of the “parent” IAM issued to following statement, ABC TV News reported yesterday:

“Employees knew Boeing executives could do better, and this shows the workers were right all along. The proposal will be analyzed to see if it’s up to the task of helping workers gain adequate ground on prior sacrifices,” said Bill Bryant, president of IAM International.

The absence of a comment from 751 doesn’t mean others aren’t. Two retired Boeing IAM members told LNA the BAFO is acceptable and said union members should approve it. However, social media commentary takes a decidedly different view.


Update: The IAM 751 just posted a response to its Twitter (X) account, here. It’s a scathing reply.  In part, the union leadership said, “THIS IS A NON-NEGOTIATED OFFER from Boeing. Your Negotiating Committee did not have any discussion or input on this offer. We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready. These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.” (Emphasis is the union’s.)

There will be no vote Friday, the union says.


One post on Reddit mocks Boeing’s “Best and Final Bingo” offer. There are claims of “astroturfing,” ie posts that purport to be from IAM members but which are believed to be ghosts for Boeing. There’s no proof, but one former IAM member said that during the contentious 2013/2014 vote for concessions in exchange for the 777X assembly in Everett astroturfing was traced to Boeing.

Other posts make it clear that there is resentment over Boeing’s releasing the BAFO to the media before the members received it. And generally, there remains a belief that Boeing can do more.

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Boeing makes “Best and Final Offer” to IAM; sets Sept. 27 midnight deadline

Sept. 23, 2024, (c) Leeham News: Boeing issued its Best and Final Offer (BAFO) to its largest union, the IAM 751 a short time ago. The company set midnight Friday as the deadline to accept it.

So far, there has been no comment from the union. The union went on strike at midnight Sept. 12 after rejecting a contract with a 95% vote and went on strike with a 96% vote.

Boeing’s website has additional information.

A retired union member told LNA the members should accept this one, with the restoration of the year-end bonus a key feature.

 

 

Why the IAM 751 rejected the Boeing contract and what is needed for approval

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By the Leeham News Team

Analysis

Sept. 16, 2024, © Leeham News — The lopsided outcome of last week’s vote by the International Association of Machinists District 751 union members to resoundingly reject Boeing’s four-year contract offer caught a lot of observers by surprise, including us.

Not that we didn’t expect the offer would be rejected. That seemed a reasonable bet. But if anyone tells you their Magic 8 ball had predicted a 94.6% vote to reject the contract and a 96% vote to strike, they’re overstating.

Our industry sources tell us that Boeing management was utterly gobsmacked by the result. Even the union staffers and officers we talked to on the night of the vote were surprised.

The result is now that some 33,000 751 members spent the weekend on picket lines surrounding Boeing facilities in Washington state, Oregon, and Edwards Air Force Base in California.

And Boeing management, which had very little leverage going into these contract talks, has approximately zero leverage now.

The problem, for everyone in our industry hoping for a quick resolution of this strike, is that Boeing has been acting since intensive talks started in August like it doesn’t understand how little leverage it has over the union this year. Despite new CEO Kelly Ortberg’s factory floor visits and talk about a “reset” with the unions at Boeing, Boeing acted like it believes it’s still 2014 when it won a bitter fight for a contract amendment granting concessions in exchange for locating the 777X final assembly line in Everett (WA).

Maybe Thursday night’s results will be the moment Boeing’s labor relations strategy needs if it’s ever going to solve its interconnected safety, quality, reputational, and cash-flow problems.

Summary
  • What’s the latest
  • Why the offer failed
  • At the table
  • Where we are
  • How does this end?

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Boeing CFO: we want to negotiate; taking steps to preserve cash

By Scott Hamilton

Sept. 13, 2024, © Leeham News: Brian West, the CFO of The Boeing Co., said management wants to get back to the negotiating table with its largest union, the IAM 751, to reach a new contract agreement as quickly as possible.

He also said the company is taking steps to preserve cash following a strike that began at midnight yesterday after the union rejected a contract by an unprecedented 95% vote and authorized a strike with 96% of the vote.

The strike comes at a time when Boeing is losing billions of dollars in cash, remains in a loss-making position, and struggles to recover from five years of crises and self-inflicted turmoil.

West made his remarks this morning in a previously schedule appearance at the annual Morgan Stanley Laguna Beach investors conference.

An edited transcript of his appearance follows.

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IAM files Unfair Labor Practice against Boeing in thumping rejection of contract

 By Scott Hamilton

 Sept. 12, 2024, © Leeham News—Seattle: Members of Boeing’s largest union, the IAM 751, gave the company a thumping in rejecting a contract offer tonight. The contract was rejected by 94.6% of the vote and 96% of the members voted to go on strike at midnight. It was a thumping of unprecedented proportions, said a union member.

Jon Holden, the president of IAM 751. Photo Credit: Leeham News.

Union president Jon Holden said the 751 also filed an Unfair Labor Practices (ULP) complaint with the National Labor Relations Board. He claimed Boeing violated the law in several ways that prohibit company contact directly with members during negotiations.

Holden, who came under some withering criticism from some members for recommending the contract, previously said it was the best that could be achieved at the negotiating table. But in the end, the members had the final say, Holden said tonight.

“While there were many important things that were in this offer, it didn’t make up, it didn’t bridge the gap for 16 years from 2008 and going through two extensions and the threats of job loss, stagnated wages, cost shift on healthcare, and many other issues, especially relocation of thousands of jobs for other programs here in the state,” Holden said at a press conference after announcing the vote.

“Our members spoke loud and clear tonight. All day they were voting across Puget Sound, across Portland, Victorville, California, Edwards Air Force Base, and Moses Lake. I’m proud of our members. I’m proud of them for standing up and fighting for more for each other, for their families, for the community.”

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Critical labor contract vote for Boeing, IAM 751 today

By Karl Sinclair and Scott Hamilton

Sept. 12, 2024, © Leeham News: The International Association of Machinists (IAM) District 571 votes today on a contract proposal negotiated between union leadership and the management at Boeing (BA). It’s a critical vote for both parties.

The four-year contract calls for a 25% pay hike, a $3,000 signing bonus, an improved benefits package, and a commitment to build any future new aircraft in the Seattle area during the next four years.


Boeing yesterday issued a new Contract comparison sheet in advance of today’s vote: Boeing Contract Comparison_Fact_Sheet 9-11-24


Union workers can reject the offer, which must be approved with a 50%+1 majority. A second vote on a motion for strike action if the contract is turned down will also be on today’s ballot. A strike vote must be approved by a two-thirds majority. If this fails, the contract becomes adopted irrespective of the accept-or-reject vote. Boeing is desperate to avoid a shutdown as it faces pressure from customers, regulators, and suppliers who have endured one of the worst stretches in its history.

On Wednesday morning, hundreds of workers walked out of the Everett factory to rally against the contract. Engineers at the Renton factory were sent home because demonstrations there made it too noisy to work. They were told to work from home today,.

Leadership at the local previously indicated that they intended to demand a 40% raise for members, along with a seat on the board of directors, having gone through 16 years of giving concessions to management, as they were strong-armed in previous negotiations.  Read more

Boeing IAM vote in 2 days; approval a hard sell

By the Leeham News Team

Sept. 10, 2024, © Leeham News: Boeing’s touch labor union, the International Association of Machinists and Aerospace workers District 751 (IAM) votes in two days on a new labor contract.

Although a Tentative Agreement was reached Sunday and union leadership endorsed it, getting 50%+1 vote to ratify the contract appears in trouble. A concurrent strike vote requires a two-thirds majority for a walk out, and there is split opinion whether this high threshold can be met.

This will be a hard sell for IAM leadership. The deal makes progress in the areas IAM members identified as priorities, but falls short of the union’s stated goals in most of them:

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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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