Boeing’s safety, labor battles heat up while CEO will walk with $34m payout

By Scott Hamilton

May 16, 2024, © Leeham News: Even as Boeing is under fire for safety issues, the company’s battles heat up.

  • Boeing remains at an impasse with its engineers and technicians union over creating a new safety program. The company has doubled down, the union says. SPEEA has turned to lawyers for legal advice.
  • The US Department of Justice on Tuesday notified Boeing that it concluded the company failed to live up to terms of a 2021 Deferred Prosecution Agreement (DPA) intended to put to rest all criminal liabilities stemming from the 2018-19 737 MAX crashes that killed 346 people. DOJ may go ahead with criminal prosecutions now.
  • The firefighters union was locked out by Boeing over contract negotiations, bringing in replacement workers. The union says Boeing’s actions threaten safety at its plants. SPEEA and its powerful touch labor union, the IAM 751, are picketing with the firefighters in support.
  • IAM 751 apparently is using the firefighters’ strike as a training ground in anticipation of its own possible strike in September when its current contract expires.

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SPEEA, Boeing at impasse over safety program, union says

By Scott Hamilton

 April 23, 2024, © Leeham News: Boeing and its engineers/technicians union, the Society for Professional Engineering Employees in Aerospace (SPEEA) are at an impasse over the proposed creation of a safety program widely used by airlines and other companies, the union says.

The Aviation Safety Action Program (ASAP) is already in use by Boeing for flight testing. And the touch-labor union, the International Association of Machinists and Aerospace Workers (IAM) District 751 and Boeing recently adopted an ASAP that is in its early stages of implementation.

ASAP is a program, used across the airline and aerospace industries, by which employees may pass safety concerns to the regulators, in this case, the Federal Aviation Administration (FAA), without fear of retaliation or retribution.

“The ASAP program was designed for FAA-certified airmen—pilots, mechanics, dispatchers,” said a former Boeing employee whose duties at one time included safety. “In the airline world, nothing gets pre-screened. For a reason! The ASAP program is set up for Boeing flight tests. Production pilots at Boeing operate this way.”

“We have offered SPEEA the same agreement we signed with the IAM and the FAA to strengthen safety, quality, and compliance,” a Boeing spokesperson said in an email to LNA. “We believe it will make a difference in ensuring product safety. This tri-party agreement is modeled after the longstanding and proven Aviation Safety Action Program (ASAP) which is used in the airlines and elsewhere in Boeing.”

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Boeing unlikely to meet FAA’s 90-day deadline for new safety program

By Scott Hamilton

April 18, 2024, © Leeham News: Boeing appears unlikely to meet a 90-day deadline to submit a comprehensive plan to address safety concerns, insiders tell LNA.

The Federal Aviation Administration (FAA) on Feb. 28 gave Boeing three months to address “systemic quality-control issues,” a move sparked by new safety concerns following the Jan. 5 accident of Alaska Airlines flight 1282. A 10-week-old 737-9 MAX was minutes into climb-out from the Portland (OR) airport when a door plug blew out, prompting explosive decompression of the cabin. Nobody died but there were injuries and damage throughout the cabin.

“FAA Administrator Michael Whitaker told Boeing that he expects the company to provide the FAA a comprehensive action plan within 90 days that will incorporate the forthcoming results of the FAA production-line audit and the latest findings from the expert review panel report, which was required by the Aircraft Certification, Safety, and Accountability Act of 2020,” the FAA said in the Feb. 28 press release.

  • Boeing firefighters union rejects contract again; free to strike May 3. See below.
  • SPEEA, Boeing’s engineer and technician union, tells members to start saving for a strike. See below.

“The plan must also include steps Boeing will take to mature its Safety Management System (SMS) program, which it committed to in 2019. Boeing also must integrate its SMS program with a Quality Management System, which will ensure the same level of rigor and oversight is applied to the company’s suppliers and create a measurable, systemic shift in manufacturing quality control.”

Now 45 days later, LNA is told Boeing is unlikely to meet the deadline. Furthermore, Boeing’s engineering and technicians union has had no outreach from Boeing seeking its input into the plan.

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Leadership changes required at Boeing, say conference delegates

By Scott Hamilton


Special Coverage of the Boeing Crisis

Jan. 26, 2024, © Leeham News: At the first commercial aviation conference following the Alaska Airlines Flight 1282 Boeing 737-9 accident on Jan. 5, much of the conversation was about the fallout to Boeing. Spirit AeroSystems was a topic of less conversation, even though the problem with 1282’s door plug appears to have originated with Spirit.

Aviation Week’s supplier conference was supposed to begin with a fireside chat with Boeing’s Ihssane Mounir, the head of Boeing’s commercial supply chain. Unsurprisingly, Mounir canceled the week before as the Alaska accident—in which there were no fatalities and only a few minor injuries—expanded into a full-blown crisis for Boeing.

News that the Federal Aviation Administration dropped the hammer on Boeing by freezing current 737 production rates and killing, for now, expansion of the airplane’s final assembly to the “North Line” in Everett (WA) brought disbelief that Boeing has fallen so far from what was once considered the Gold Standard of American engineering.

And, with contract negotiations beginning in March with its touch-labor union, the IAM 751, aerospace analyst Ron Epstein of Bank of America predicted that 751 has more leverage now than in recent years and Boeing will be in the weaker bargaining position.

David Calhoun, CEO of The Boeing Co.

Other than consultant Richard Aboulafia, a vociferous critic of Boeing CEO David Calhoun, speakers were willing to definitively call for changes in Boeing’s leadership. But in sideline talk, consensus was clear: “leadership” at Boeing headquarters and in Seattle with Commercial Airplanes has to go.

But there was no agreement, or even suggestions, about who should replace Calhoun and Stan Deal, the CEO of Commercial Airplanes.

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Analysis: With Gentile out at Spirit, here’s what Shanahan’s hiring likely means

By Bryan Corliss

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Oct. 2, 2023, © Leeham News – Tom Gentile is out as CEO of Spirit AeroSystems, the victim of a number of serious production missteps and a failure to lead the Tier 1 supplier into a stronger position following the Covid-19 pandemic and the grounding of Boeing’s 737 MAX. 

Interim Spirit AeroSystems CEO Pat Shanahan.

The new interim CEO is Pat Shanahan, a long-time Boeing and Pentagon executive who has been serving on Spirit’s board since 2021. 

Spirit said its board is conducting a search for a new chief executive.

  • Markets respond to news
  • Shanahan faces huge challenges as CEO
  • Shanahan’s resume fits Spirit’s need 
  • Our takeaway: What this means for Spirit’s future

Related Article:

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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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‘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 faces exodus of senior engineers in tight market for talent

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By Bryan Corliss
Nov. 28, 2022, © Leeham News: Boeing’s engineering corps could become further depleted within the next few days, as union-represented engineers and technical workers at the company’s Puget Sound plants face a Wednesday deadline on filing their retirement paperwork.

If they don’t leave now, individuals could face retirement benefit losses in the hundreds of thousands of dollars.

The potential loss of several hundred of Boeing’s most experienced engineers comes at a time when the company is scraping together engineering teams to tackle production problems in Charleston, and in the midst of an industry-wide shortage of engineering talent.


  • Aggressive hiring sparks Brazilian lawsuit
  • Engineers face Wednesday deadline
  • All aerospace companies need engineers
  • Tech industry layoffs won’t help
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Pontifications: Boeing spending millions to retain engineers

May 16, 2022, © Leeham News: Boeing is spending millions of dollars to retain engineers represented by the union, SPEEA.

It’s a reversal of efforts to trim SPEEA ranks through early buyouts and outsourcing and to address an aging workforce.

By Scott Hamilton

The proposed 2017 joint venture between Boeing and Embraer was meant to address the retirement crunch. But delays in clearing the JV by the European Union and then the Boeing 737 MAX crisis and the global COVID pandemic killed the deal. Boeing walked in April 2020, shortly after the pandemic began. Officials claimed that Embraer failed to meet all the terms and conditions outlined in the documentation. Embraer denied this, claiming Boeing’s self-inflicted MAX crisis was the reason Boeing walked. The companies are in arbitration over a $100m break-up fee. With the collapse of the JV, Boeing lost access to Embraer’s young (and less expensive) engineering workforce, the No. 1 reason to do the joint venture.

“There is a big push to keep people,” SPEEA tells LNA. “Boeing is using raises, restricted stock, and incentive bonuses to keep engineers. Our contracts called for $7m in out-of-sequence raises last year and the company spent $22m.”

Boeing is more than a year away from clearing its inventory of 737s and 787s. Until then, or until the end is definitively in sight, it’s highly unlikely that Boeing will launch a new airplane program. But there are five 7-Series airplane programs that engineers and others are working on: the certification of the 737-7 and 737-10 this year and next; the development of the 777-8F; and increasing the gross weight of the 787-9 and -10. Certification of the 777-9 is also outstanding. Nothing official has been said in detail, but changes to the airplane demanded by regulators may require engineering work.

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