Update, 10:30 PM PST:
It’s official: 79% of the engineers and 69% of the technicians voted for the contract.
Update, 9:00 PM PST:
Unofficial returns: it appears that both contracts passed. It may be another 30-60 minutes before the returns are official.
Update, 8:00 PM PST:
SPEEA is still counting the votes. There was a record vote of more than 14,000. Estimates are another 60-90 minutes for the tally to be completed.
SPEEA, the engineer’s union at Boeing, will tally votes today on a new contract.
Actually, there are two contracts–one for the technicians and one for the engineers.
Up to now, technicians have been pretty vocal that they don’t like the terms negotiated by the SPEEA leadership, responding with a vitriol that surprised the negotiating team, who thought they had a good contract deal. This raised fears that the technicians might reject the contract, while the engineers are expected to approve it.
Final results aren’t expected to be counted until late tonight (Seattle time), but we’re geared up to post results as soon as we have them this evening.
If, by chance, either contract is rejected and a strike is authorized, don’t expect a walk-out. SPEEA historically goes back to the bargaining table to renegotiate if a contract is rejected. SPEEA has only struck twice in 40-some years.
Bloomberg News has a story quoting the head of mega-lessor saying he has a deal to buy International Lease Finance Corp. from insurance giant AIG.
ILFC is the largest customer of Airbus and Boeing. It owns and manages a fleet of slight more than 1,000 planes with a value of $55 billion.
This is a highly positive development for the airline industry. But as is often the case, the devil is in the details. The deal has to close (next year) and it remains to be seen how it is structured and what flexibility the company has in the future.
Steve Wilhelm of the Puget Sound Business Journal (Seattle) has a long story about Southern states “eyeing” Boeing in the wake of the IAM strike. Speculation has been rampant (in peaks and valleys) that Boeing might be fed up with its unions in heavily unionized Washington State and be looking South when it comes time to build its next airplane (or two).
One quote from the story that is filled with irony is:
“If I was a Boeing executive, I’d look at the state of Alabama and see there’s a qualified work force … I’d take a look at the assets we have,” said Stephen Nodine, president of the Mobile County Commission, whose offices are in Mobile, Ala.
Alabama, of course, is the proposed site for the Northrop Grumman/Airbus KC-30 tanker proposed in competition with Boeing’s KC-767, which will be assembled in the Seattle area if Boeing ultimately wins the contract. But what is more ironic is that Boeing’s Integrated Defense Systems denigrated the skills of the Alabama workers during the tanker competition, suggesting they might have trouble building a tricycle if Northrop got the tanker contract. (It apparently mattered not that IDS has a large facility in Huntsville, AL.) Boeing’s Commercial unit cringed at the IDS statement because the Northrop/Airbus production model isn’t that different from BCA’s assembly model, including the high-profile 787 program (in which case IDS may have a point) but to a lesser degree with the 767 itself.
And speaking of tankers, Northrop didn’t even wait for the new Congress and the new president to take office before resuming the tanker wars with an advertisement that got the Pentagon’s chief purchaser up in arms (so to speak). Read about this one here and here.
We criticized Northrop for being slow off the PR and advertising mark in 2007, letting Boeing’s well-oiled machine set the agenda and frame the debate. (Once Northrop got running, it did make up for lost ground and scored some great PR/advertising hits.) But this advertisement, and more so it’s timing, strikes us as very premature. Nobody knows who the decision-makers in the Pentagon will be (and in any event, they shouldn’t be influenced by ads) and we doubt Members of Congress are paying much attention to the tanker debate right now anyway. With four million people expected for the inauguration of Barak Obama and the organization of the power structure in Congress, we suspect the Members of Congress might just be focused on something else right now.
Addison Schonland and Richard Aboulafia join us in a 19 minute podcast discussing whether Boeing is fundamentally and structurally sound. This follows comments by Boeing Commercial Airplanes President Scott Carson at a Credit Suisse conference saying so.
Do we agree or disagree? Listen and find out.
Update, November 21:
We inadvertently linked the podcast reference to a nice environmental story-we fixed it. Sorry about that.
James Wallace today confirmed what we predicted from the get-go when Delta Air Lines and Northwest Airlines announced its merger months ago: that Delta, long a solid Boeing customer, will buy from Airbus.
Wallace is the aerospace writer for The Seattle Post-Intelligencer; his story may be found here.
Boeing just announced what we were the first to predict nearly a year ago: flight testing and delivery of the 747-8 will be delayed. The press release is here.
Boeing announced a nine month-long delay, in part due to engineering resource issues. We’ve been reporting a creeping delay in the program, initially six months, then nine and most recently one year. Customers tell us they expect a year’s delay.
Meanwhile, the French news service AFP reports Airbus may not deliver all A380s next year originally planned. This short item is here.
Negotiations between Boeing and SPEEA appear to have taken a discouraging turn. SPEEA scheduled a strike authorization vote by the Council (SPEEA’s parliament) to authorize a strike vote by the membership.
Boeing stalls negotiations – Council issues strike authorization vote – Managers improperly poll members
With The Boeing Company stalling on responding to SPEEA counterproposals, the Northwest Council on Thursday authorized a member vote seeking strike authorization power for the Professional and Technical negotiating teams.
The bargaining unit councils each voted unanimously to hold a member vote on strike authorization. A simple majority “YES” vote gives the negotiation teams authority to call a strike if necessary. The action comes after two days of non-productive and discouraging dialog with Boeing over key economic issues, including wages, pensions, medical benefits and the company’s ongoing attempts to strip Utah engineers from the Professional contract.
“A great deal of progress has been made,” said SPEEA Executive Director and Chief Spokesperson Ray Goforth. “It would be unfortunate for customers, shareholders and employees of Boeing if we can’t reach a deal at the bargaining table.”
Main Table talks started Oct. 29 after eight months of negotiations in committees. Early this week, SPEEA negotiation teams made some major moves in an attempt to bring negotiations to a successful close. Despite the efforts, Boeing negotiators remain convinced they can force SPEEA members to accept a contract that keeps wages below market, removes pensions for new hires and opens the door to fragmenting bargaining units into smaller and smaller groups of employees.
By mutual agreement, specific details of the responses and counterproposals will not be available until negotiations conclude.
Managers improperly poll members
SPEEA has heard that some managers are polling employees in the workplace about their views on terms and conditions of employment. This improper communications is being used by Boeing negotiators to gauge what is an acceptable contract offer for SPEEA members.
For legal reasons, we are interested in your experience if contacted by management. This type of employee polling is not acceptable as part of the collective bargaining process and is affecting our ability to successfully conclude our contract negotiations with the company.
What is the difference between a pidgeon and an investment banker?
A pidgeon can still leave a deposit on a BMW.
Update, November 11: We’re cautiously optimistic a settlement will be reached without a strike.
A strike authorization vote by SPEEA members is scheduled for tomorrow in the contract negotiations with Boeing, but it’s likely to be postponed until a final offer comes in from Boeing.
If this is like the IAM process, a strike authorization is different from an actual strike vote. It’s sort of a sense of the membership. The IAM had a vote in July that long preceded the actual strike vote September 3.
Right now things don’t look encouraging but they also don’t seem quite as bleak at the situation preceding the IAM contract votes.
The best description is that the situation is highly fluid and uncertain.
Boeing last week announced an order for four more 767s (in this case, -300ERs) that help keep the line alive pending a new competition for the USAF aerial tanker.
Boeing previously booked an order for nine 767s for All Nippon Airways, a customer affected by delays with the 787. Japan Air Lines is expected to take nine 767s as well; there are nine listed on Boeing’s website as unidentified–these are believed to be JAL’s. Another airline ordered two 767s.
All four carriers are 787 customers affected by the delays.
There are now 68 unfilled orders listed on Boeing’s web site for the 767. Boeing’s production rate is currently one a month but it likely will go to two a month as early as 2010.
This is good news for Boeing in keeping the 767 line active while Boeing competes for the KC-X contract. (Good news, that is, which originates from the bad-news 787 delays, of course.)
It’s unclear how the Department of Defense and the Air Force will handle the new round of KC-X competition. DOD hasn’t said if it will simply restart the competition suspended from the GAO decision upholding the Boeing protest or completely restart the competition. If the former, a decision could be rendered within a year and the 767 production rate is moot. If the competition is completely restarted, worse-case, it could take up to four years. Before the 767 orders were placed to take care of 787 customer delays, the backlog was about four years at one a month. The current backlog and production rate gives Boeing four years to keep the line open.
Update, November 11: Lan Chile just announced the acquisition of four 767-300ERs for delivery starting in 2012 to accommodate delays in its 787 order.