Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
- A350-1000 or 777-9? Part 2 April 11, 2024
- Pontifications: Boeing “transparency”–not so much. April 9, 2024
Charleston plant continues to give Boeing headaches for 787
Boeing is adding hundreds of workers to its Charleston (SC) 787 plant top deal with continued quality problems, reports The Wall Street Journal.
The details in the article are at odds with statements from Boeing throughout the last year that all was well at the plant, including that plans to produce three 787s a month by the end of last year were on track. When the Charleston Post-and-Courier prepared to report that the Charleston plant would fail to meet this goal, Boeing’s Charleston spokeswoman issued a rather snarky response that proved to be at odds with statements from Boeing’s own officials.
We heard all year that there were continued quality control issues at Charleston and production was slower than expected. Further, we had heard of traveled work that required IAM 751 members at the Everett (WA) plant to fix this work–which the WSJ reports has been climbing and now exceeds the 2011 level.
IAM 751’s president Tom Wroblewski steps down
Tom Wroblewski, president of IAM 751–the Boeing touch labor union in Puget Sound (WA)–announced last night he is retiring on January 31.
The Seattle Times has the full story. In a nutshell, Wroblewski’s health blew up alongside the labor relations with Boeing over the 777X site selection and the relationship within the District 751 and between 751 and the International.
We’ve casually known Wroblewski for many years. We like Wroblewski and knew he had the welfare of his members at heart. We disagreed with him and 751’s positions on many occasions, just as we did with Boeing’s position toward labor, but we always respected Wroblewski.
More to the point, we also believe Wroblewski was more in tune with his membership and more concerned for 751’s welfare than the International. We felt so strongly about this that in February 2010, at the Pacific Northwest Aerospace Alliance conference, we suggested that it would be in 751’s interest to “divorce” itself from International.
Wroblewski, who shies away from the press, called us protesting our suggestion. We later learned that he got into hot water with International over our opinion that he knew better what was important for 751 than the International leadership.
Wroblewski was further cranked with us a few years later when we advocated that Washington State needed to become Right To Work to make it more competitive with other states competing for our aerospace business. And he didn’t like our recollection that it was the IAM (though a different District) that lead to the shutdown of Eastern Airlines rather than grant concessions to save 10,000 jobs. (International president Tom Buffenbarger had a hand in that one.)
Readers know well what we think of how International handled the 777X contract negotiations and ran roughshod over 751. We opined that International was more concerned with retaining 751’s membership dues than it was about what was best for the members.
Under Wroblewski, 751 engaged in several philanthropic activities, most notably raising money for guide dog training and related needs. These activities got little press (including from this venue), who instead focused on the “sexier” stories of labor contract negotiations and strife with Boeing management.
A new leader for 751 may well be more militant than Wroblewski. While there now is a contract in place well into 2024, a militant leader for 751 can nonetheless make things difficult in an already tense situation for years to come. We think this has the potential to be a negative development for Boeing.
We’re sorry to see Wroblewski leave under these circumstances but not surprised. We wish Wroblewski a speedy recovery.
Would delayed IAM vote had made a difference? We don’t think so
We really hoped we were done with this story, but the saga of the IAM 751 Boeing 777X contract vote lives on.
- Several complaints about the timing of the January 3 vote have been filed with the National Labor Relations Board.The NLRB says it will take three months to investigate the matter.
- More than 1,000 members of 751 local units have called for a recount or a new election; the International rejected these demands. (Note: in government elections, recounts are generally not undertaken unless the margin is less than 100 or the percentage difference is less than 0.5%.) The margin in the January 3 vote was 51%-49% and some 600 votes.
- A local 751 member declared his candidacy for general vice president of the International IAM, in an election to be rerun from a year ago because of procedural irregularities. This is, of course, part of the irony of the entire matter: the International hijacked the election process from 751, which has never been accused of voting irregularities (that we know of). We’ve observed a couple of vote counts by 751 and found them to be scrupulous.
The critics of the election’s timing note that several thousand members of 751 were on vacation on January 3. Absentee voting was allowed for the first time in IAM history, but according to media reports, about 2,700 members did not vote in this election who voted in the November 13 election. The 777X contract was rejected then by a 67%-33% margin.
If these 2,700 members voted in the January 3 election, about 72% of these would have had to vote “Reject” to overcome the 51% “Accept” result. This is 5 percentage points greater than the November 13 Reject vote. We’re not persuaded this would have occurred.
We were involved in local suburban and state legislative elections from 1998 through 2011. In the suburb where we live, voter turnout in presidential years routinely was 85%. We analyzed voting results and voting trends in all but the 2011 election. In no case did absentee votes alter the initial reported outcome by more than 1%. Those on the losing end hoped that absentee ballots would make up the difference. We always calculated what percentage of votes would be required to overcome a deficit. Super-majority percentages were beyond reach.
It is based on this experience, and the percentages achieved in the November 13 and January 3 votes, that leads us to conclude that even if the “missing” 2,700 members had cast votes, the required percentage to win–72%–was impossible to achieve.
We believe the contract still would have been accepted.
IAM 751, in dramatic reversal, accepts Boeing 777X contract
The members of the International Association of Machinists District 751, in a dramatic reversal of its November 13 landslide contract rejection, today approved a revised contract offer from Boeing by a vote of 51% to 49%.
http://www.youtube.com/watch?v=0TCWIIs9P2c
Approval means Boeing will produce the new composite wings for the 777X and undertake final assembly of the airplane right here in Puget Sound (Seattle). The 777 Classic is assembled at Boeing’s Everett factory, home to all wide body assembly since it was built specifically for the 747. The 777 Classic’s wings fuselage panels are produced in Japan and shipped to Everett for assembly to the fuselage.
The outcome was in doubt as 751 members began voting at 5am today. Rallies leading up to the vote were largely anti-acceptance. Pro-acceptance rallies were lightly attended.
Sentiment on blogs and in Comment sections of the Seattle papers overwhelmed positive comments. Reports from the field polling places suggested the contract would be rejected.
The vote secures jobs for the IAM members at the expense of ending the defined pension plan in 2016 in favor of a 401(k) approach to retirement benefits. It also extends of Letter of Understanding (#42) providing that 737 MAX and KC-46A tanker production remains in Puget Sound through 2024, to which is when the 2016 contract has now been extended.
The controversial contract may bring mixed feelings to union members, but it brings unfettered job to elected officials, the Puget Sound supply chain and other interested parties who feared Boeing would take all the 777X production elsewhere at the cost of nearly 30,000 direct and indirect jobs and huge hits to the local economy.
But make no mistake: when Boeing proceeds with a new airplane design to replace the 757, followed by one to replace the 737, we’re going to see another round of efforts to browbeat the union and the state into more concessions or give-backs in exchange for production to be located here.
The timeline for decisions for a 757 replacement should begin around 2017. Decisions for a 737 replacement should begin around 2020.
Tonight’s IAM 751-Boeing 777X contract vote (Update, 9p)
Vote results and IAM 751 statement are here.
We’ll be at IAM 751’s headquarters tonight for the vote results. Follow us on Twitter @leehamnews for news throughout the evening from around 7pm. We’ll post results here when announced, which is estimated between 8-9pm PST. Depending on how things are going, we may also update this post during the evening before the results are in. Update, 7:30pm: We’re at IAM 751 HQ awaiting the vote. Vote counting is done here and is either underway or done at the other locations except Everett, where high turnout and slow process delayed counting, which was estimated to begin at 7:30. IAM officials don’t know yet how long it will take to complete the counting and call in the results. We’re still standing by for result announcements around 9pm until advised otherwise. Unlike the November 13 vote, it’s very quiet here. The prediction is for a “no” vote. We shall see.
Update 8:30pm: Nothing new, still in holding pattern.
Update 9pm: Everett done counting, results in about 20 min, now said to be too close to call.
Countdown to IAM-Boeing vote January 3; poll results; union urged to accept; no tax breaks from WA if Boeing splits work
- The New York Times has a good summary of the “optics” of the IAM-Boeing 777X situation.
Two third of Readers in our on-line polling this week urged IAM 751 members to accept the Boeing contract offer that contains major concessions, notably on pensions, in exchange for Boeing selecting Washington State to assemble the 777X and produce its wing here.
The unscientific polling is broad-based and not restricted to union members, and should not be considered indicative of the outcome of the vote today. Results are to be announced tonight around 9pm PST.
The polling results below are as of January 2. Voting is still open so totals may differ in the original post vs what is reported below, but voting subsided to the point where results should remain constant.
Should IAM 751 Members Accept or Reject the Boeing 777X contract?
| Answer | Votes | Percent | |
|---|---|---|---|
| Accept | 366 | 67% | |
| Reject | 183 | 33% |
Key political leaders in the Puget Sound area met Monday with Ray Conner, CEO of Boeing Commercial Airplanes, before meeting with the press and urging the members of IAM 751 to approve the contract.
The Puget Sound Business Journal has a detailed story, including the dire consequences if the contract is rejected.
The Associated Press has a similar story.
IAM 751 sent a letter December 23 to its members recommending a No vote and detailing why.
According to the civic leaders meeting with Conner, the BCA CEO said if the 751 members don’t accept the contract, the wing production will be sent elsewhere. According to the news reports, Conner was more ambiguous about the fuselage work and final assembly.
The Requests for Proposals Boeing issued after 751 members rejected the first contract offer on November 13 allowed for splitting the FAL and the wing production among sites. But we confirmed with Washington’s Director of Aerospace that if Boeing does this, none of the $8.7bn in tax breaks the state offered Boeing will be extended; it’s an all-0r-nothing offer.
Missouri is the only other state to go public with its tax break offer: $1.7bn from the state and $1.4bn from St. Louis County.
Texas, California, South Carolina, Alabama, Utah and Georgia are among the 22 states that offered up 54 sites to Boeing in the RFP process. North Carolina and Pennsylvania are the only ones to publicly reveal they were eliminated in Boeing’s early analysis of the RFPs.
The contract offers set off internal strife at the IAM. District 751 leaders are feuding with the IAM International leaders, who negotiated the contracts with Boeing and who have largely run roughshod over 751. Local leaders oppose ratification of the contract and the International urges acceptance. International forced the January 3 vote over the objections of the District.
But our polling also shows the District 751 leadership is in trouble. A large percentage of our Readers blame 751 leaders for the current mess and more want to see the District leaders replaced than the International heads.
A large number of Readers also believe District 751 should be decertified as Boeing’s union representation and a large number believe 751 should divorce from its affiliation with IAM International.
We understand that neither decertification nor “divorce” can occur until 2016 under the current contract, or until 2024 if the contract is Accepted and extended. One of our Readers believes that if this contract is rejected, it is possible for changes to be made this year. We don’t know the answer.
These poll results are below the jump.
Odds and Ends: Looking ahead in 2014; Boeing letter to Machinists; TWA retro choice; Screw it, let’s do it on Virgin [plane]
Looking ahead in 2014: We wrote this outlook for 2014 for CNN International Travel. More seats, more fees, quieter year.
IAM 751 members vote Friday on the ‘777X contract.‘ Here is a letter dated December 27 from Boeing to the Machinists making the case to vote for the contract.
It is the TWA Twin Globe livery that is the clear choice by our Readers for American Airlines to select for a retro livery.
Source: Photobucket.com. Convair 880
TWA’s last livery was a distant second. (We didn’t particularly like this design.) The design should probably go on an MD-80, the derivative of the DC-9 on which the Twin Globes livery appeared.
Source: Ed Coats Collection. Douglas DC-9-15.
Which TWA livery should join American Airlines’ fleet as the “heritage” airplane?
| Answer | Votes | Percent | |
|---|---|---|---|
| Boeing 707 Twin Globes Livery | 944 | 53% | |
| Final Blue/Red/Gold Livery shown on Boeing 757 | 427 | 24% | |
| Red Stripe, Solid Tail Livery shown on Boeing 747 | 165 | 9% | |
| 1950s Livery seen on Lockheed Constellation | 158 | 9% | |
| Boeing 707 Delivery Livery (no Twin Globes) | 56 | 3% | |
| Reverse Red livery shown on McDonnell Douglas MD-80 | 23 | 1% |
In other news and irreverence:
- We’re chuckling at this one: The slogan “Screw it, let’s do it” is on a Virgin [airplane, that is]. Check out this story on CNN International Travel.
- Readers know we like going to the polar regions–we’ve been to Alaska’s Arctic Circle and to 80 degrees north in Svalbard. But this is not something we care to endure.
- Today is the last day to vote in our polls concerning the IAM-Boeing ‘777X Contract.’ We’ll post the results before the machinists begin voting on Friday.
- Aspire Aviation has a long profile on the 777X here.
The deeper, longer term implications of IAM’s Boeing contract vote January 3
There are deeper, longer term implications for the January 3 vote by IAM 751 members on the revised contract proposal from Boeing than have been discussed in the public domain.
- Contract extension to 2024 brings “labor peace,” but also significantly weakens the union in the future.
- The replacement for the Boeing 757 lurks in the background.
- So does the replacement for the 737 MAX.
The near-term implications have been discussed ad nausea: for employees, vote for a contract that includes concessions, notably on pensions, or risk losing the assembly site for the 777X. For the states, Washington could be a winner, or a big loser. The state that’s awarded the assembly site would be a big winner. Suppliers will supply Boeing regardless of where the 777X is assembled.
Another near-term implication we’ve talked about: the fall-out on the IAM, both at the International level and the District 751 level. No matter how the vote turns out, there is a civil war within 751 members who are royally upset with their leadership and others who believe in it. The civil war between 751 and IAM International HQ will continue well beyond the vote, with the prospect that International could simply depose all the 751 leaders and place 751 under a trustee “for the good of the union.”
But there are much longer term implications of the vote.