Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Airbus 1Q2025 results: So far, so good, but US tariffs make future results unpredictable May 1, 2025
- Does an Airbus A220-500 need a new wing and engines? May 1, 2025
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
IAM press release in Boeing vote
MACHINISTS VOTE FOR JOBS!
SEATTLE – Machinists Union members have approved a four-year contract extension with the Boeing Co. that ensures the 737 MAX will be built in Puget Sound.
The final vote was 74 percent to accept the extension, union officers said. More than 31,000 union members in Washington, Oregon, Kansas and California were eligible to vote.
“This agreement represents a historic moment in changing the relationship between this union and the Boeing Co.,” said Tom Wroblewski, the president of Machinists Union District Lodge 751 in Seattle. “For the first time, company executives are committing to you to keep work in Puget Sound.”
“This agreement shows the collective bargaining process is flexible enough to adjust with the times,” said Wroblewski. “The process allowed us to be creative and produce a win-win for everyone – our members, Boeing, airline customers, and the community. This is a vote of confidence for job security and a stronger future for this region.”
The agreement extends the current contract, which was set to expire in September 2012, another four years.
The biggest benefit to the contract was the commitment to job security, Wroblewski said.
“As a result of this vote, we have the strongest commitment to the future of aerospace jobs in Washington State that we’ve ever had,” he said.
The new contract also creates a new, top-level joint council of union and company leaders that will meet monthly to pursue opportunities and work together to solve problems.
“This committee has agreed to four mutual objectives, and first among them is this: creating and sustaining good-paying jobs with benefits,” Wroblewski said. “Thanks to your vote on this contract extension, that now is one of the Boeing Co.’s stated goals.”
Under the terms of the extended contract, Machinists will receive:
2-percent wage increases in each year of the contract, plus additional cost-of-living adjustments;
A new incentive plan that will pay out up to 4 percent each year;
Increases to the formula for calculating pensions, plus a continuation of the current 401(k) savings plan with a company match, plus a commitment to preserving pensions for new hires;
A $5,000 ratification bonus, which will be paid on Dec. 15.
In exchange, union members agreed to pay higher medical premiums starting in 2013.
Boeing and the Machinists Union have clashed in the past, Wroblewski acknowledged. But with the ratification of the contract extension, the two sides are now committed to working together.
“It’ll be a big shift; that we both need to embrace. But we must do this,” he said. “Because it’s obvious that we as union members cannot prosper if the Boeing Co. isn’t successful, and we’ve seen quite clearly that Boeing’s success is tied directly to the skills and experience of our Machinists Union members.”
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IAM approves Boeing contract 74%
IAM 751 tonight approved a new, four-year contract with The Boeing Co, extending labor peace to 2016. The union and the company negotiated the contract nearly a year early, an unprecedented move in Boeing-IAM relations.
The vote passed with a votes of 74%.
The union gets raises, a signing bonus, and assurances Boeing will build the 737 MAX in Seattle (though the contract language isn’t actually rock-solid definitive). The union will tell the NLRB it wants to drop the complaint over the Charleston 787 assembly site.
IAM-Boeing vote: early returns, appears to be passing 3-1
We’re at the IAM HQ in South Seattle for the vote on the historic IAM-Boeing contract. Seattle and Auburn votes being counted, and eye-balling the piles, it appears the contract is passing 2-1.
Results will be announced between 8-9 pm.
Follow us on Twitter @leehamnews for updates this evening.
7:30pm: It appears Yes votes gaining ground. Appears better than 2-1 now.
7:35pm: It’s subdued here at IAM HQ as votes are counted. One IAM official predicted at least a 75% yes vote, but others are more cautious out of innate conservatism.
8:00pm: IAM estimating announcing results around 8:30. Oregon and Kansas votes are in but no idea of the count.
FedEx, Southwest near Boeing deals: Bloomberg and WSJ
While we are waiting for the IAM vote tonight, it looks like two more big wins for Boeing.
Bloomberg reports FedEx is about to order 30 767-300ER freighters.
The Wall Street Journal reports Southwest Airlines is about to commit to the 737 MAX.
Yes vote on Boeing-IAM deal appears likey: Seattle Times
Posted on Twitter a short time ago:
Airbus repays launch aid on WTO complaint but has drawn aid for A350
Airbus has repaid nearly 2bn Euros in launch aid associated with the findings of the WTO complaint filed in 2004 by the US Trade Representative, an amount far less than the American agency alleged as US$25bn in illegal aid, but this isn’t likely to be the last word by any stretch.
Airbus parent EADS in 2010 has already drawn down “reimburseable launch aid,” according to the 2010 EADS annual report. The A350 funding was not part of the original US complaint, and is the only commercial model Airbus has produced not covered by the final report of the 2004 complaint. The USTR has threatened to launch a new complaint over the A350 launch aid. Airbus previously said launch aid for the A350 would comply with the findings of the 2004 complaint.
Airbus said after the WTO case was over that the WTO did not find reimburseable launch aid was illegal, only that the terms and conditions provided in the A-Series programs had been. This opened the door, Airbus said, for allowing launch aid for the A350 provided the terms and conditions complied with WTO findings. Commercially-based terms and conditions were at the heart of the illegalities.
The EADS financial statesments do not disclose the terms and conditions.
A spokesman for Airbus told us that the aid for the A350 complies with the terms and conditions findings of the WTO ruling, though most likely Boeing and the USTR will argue differently. The Airbus spokesman did not know the amount of the launch aid and the EADS 2010 annual financial statements (Page 63) does not disclose it: “European Governments refundable advances (incl. A350 XWB) net of reimbursements have increased in 2010.” The financial statements (select “Financial Statements 2010”) show the 2010 liability to be 5.968bn Euros vs 4.882bn Euros at Dec. 31, 2009. It is not disclosed how much of this is associated with the A350 or how much is associated with other programs, such as the A400M. However, military programs are not subject to WTO rules. The A320neo program was subject to research and development costs in 2010, which have been ruled illegal under WTO findings, but the program wasn’t launched until December 2010 and while it is theoretically possible some launch aid could have been drawn for neo, we think it more likely the spike in liabilities is largely associated with the A350.
The nine month interim financial reports do not discuss launch aid.
Boeing, IAM talk about labor deal
AirInsight has these two podcasts about the grand labor deal announced Wednesday between Boeing and the IAM.
Boeing’s Albaugh hints at 12/mo rate for 787
The chief executive officer of Boeing Commercial Airplanes Wednesday hinted at increasing production rates of the 787 beyond the committed 10 per month to 12 a month.
Jim Albaugh, speaking at the Credit Suisse Aerospace conference, reiterated plans to meet the oft-stated target of assembling 10 787s per month by the end of 2013.
“The 787 has been a tough program. Everybody knows that,” he said, citing the variety of difficulties the program has experienced. “All those were difficult tasks. We have more ahead of us. We have to get up to rate. [Plan] Z24 still has us going to 10 a month by the end of 2013. My view is that if we can get to 10 we can get to 11 [and] if we can get to 11 we can get to 12.”
The recently issued Z24 obtained by Flight Pro shows a sharp decline in planned production over Z23.
| 2012 | 2013 | 2014 | |
| Z23 |
61 |
95 |
120 |
| Z24 |
45 |
66 |
119 |
“We held the rate at two for quite a while and we had a couple of pauses as you know,” Albaugh told Flight Pro after his presentation. “Z24 does move some things to the right, but we still get to 10 a month at the same time, which is the end of 2013.”
Albaugh said the plan is to get to a production rate of five per month by the end of 2012. Rate bumps won’t happen before officials are convinced rates are stabilized.
The production rate does not reflect delivery rates, however. Boeing has more than two dozen aircraft produced but parked at its Everett (WA) assembly plant awaiting rework. Albaugh declined to specify the delivery rate for 2012, however.
“I know precisely [how many deliveries there will be] but I am not going to tell you. When we come out with our guidance for 2012 we give you some clarity on that,” he said.
Albaugh said Boeing’s Charleston facility “has demonstrated they can go beyond 2 ½ a month,” and he suggested the plant’s first 787 may be ready for delivery ahead of the planned June schedule.