Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Bjorn’s Corner: Air Transport’s route to 2050. Part 27. June 20, 2025
SPEEA strike authorization vote set
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.
Capital market meltdown
What is the difference between a pidgeon and an investment banker?
A pidgeon can still leave a deposit on a BMW.
SPEEA negotiations update
Update, November 11: We’re cautiously optimistic a settlement will be reached without a strike.
Original Post:
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.
767 sales keep line alive for tanker
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.
Were they at the same meetings?
Boeing and SPEEA have two very different views of the progress of the bargaining to date and contract offer that was presented by Boeing to the engineers’ union Thursday.
The SPEEA contract expires December 1. Many of the contract provisions proposed by Boeing are similar to those offered to the IAM, which rejected the Boeing contract and struck for 58 days. SPEEA said that if it strikes, one will come in January or February, just about the time Boeing returns to pre-IAM strike production levels.
Below is the Boeing communique issued by chief negotiation Doug Kight; the SPEEA response follows. (We can’t do anything about the type size differences–there is no hidden meaning in the different sizes in the following messages.)
Airbus, Boeing news from around the world
Update, November 6:
2:40 PM PST: Boeing is to make its contract offer to SPEEA today, with plans to conclude talks next week.
Armed Forces Journal: We wrote this article for this magazine’s November issue taking a look at the next competitive battle between EADS and Boeing over a military program.
Seattle Post-Intelligencer: UBS’s aerospace analyst thinks Boeing stock hasn’t hit bottom, due to the downturn in the aviation industry. He echoes Goldman Sachs and other analysts in a growing consensus that the worst is yet to come.
London Guardian: Airbus foresees Chinese deferrals.
Bloomberg News: There could be 200 whitetails next year as airlines find they can’t pay for airplanes.
AeroNews: Embraer considers jumping into larger airplanes.
China Daily: China looks to build 150-200 seat jets.
Update, November 4, 11:30 AM PDT: James Wallace of The Seattle P-I reports that Boeing officially told him the 787 won’t make its first flight until 2009.
November 4:
A sampling of news about Airbus and Boeing.
Seattle Post-Intelligencer: Slow restart on production, 787 first flight to February or March.
London Guardian: Lessor BOC Aviation orders 20 A320s.
Defense News: Airbus suspends A400M production.
International Herald Tribune: IAM strike delays 80 Boeing airplanes.
ATWOnline: New fastener problems with the 787.
Corporate website updated wk 11/4
In our bi-weekly update at our Corporate website, we take a look at the challenges Boeing has now that the IAM strike is settled.
We also identify the company that is the largest customer of 7-Series airplanes and the largest customer of 737s later in the same commentary.
Bad news for Northrop?
With Pennsylvania Congressman John Murtha (D-Foot-in-Mouth) suddenly in danger of defeat in Tuesday’s election after calling his constituents racist and rednecks, Norm Dicks (D-Boeing/Washington) is in line to succeed Murtha as chairman of the House Appropriations Committee.
This would be bad news for Northrop Grumman and its effort to sell the Airbus-based KC-30 to the USAF instead of Boeing’s KC-767. Regular readers need no reminder of the dynamics here.
Update, 10:15 PM EST, November 4: Northrop can breath easier; NBC News just declared Murtha was reelected.
“I can see Russia from my house.”
Air Force Magazine has an interesting article about beefing up the USA’s air defense.
Good News, Bad News for Boeing
The good news is that the IAM strike is over and the union members are starting to return to work (all of them have to be back by November 10). The bad news is that two analysts take a negative view of the near-term future.
Bernstein Research has further downgraded its 787 delivery projections, according to ATW Online in this story.
Boeing held off predicting any potential impacts to the 787 line while the strike was underway, other than saying there is a day-for-day additional delay. Although this is the case, we believe the 787’s first flight will now be well into the first quarter. Boeing’s original timeline for a first flight was October 29; at the Farnborough Air Show, program chief Pat Shanahan predicted November. A 58-day delay takes the first flight to the end of December or end of January or later, depending on when in November Shanahan thought the first flight would be. If he was thinking the end of November, then the strike put the first flight at the end of January or February.
Ramping up the work schedule from the strike will likely further delay, suggesting perhaps even a March first flight. If any more technical issues surround the 787, this could slip the first flight to the second quarter.
ATW Online reports that Qantas expects an additional six month delay for its 787s. ANA now expects its first 787 delivery in 2010, says ATW.
Goldman Sachs returned Boeing to its “Conviction” Sell list, according to this report. Goldman remains concerned about economic conditions and the capital markets leading to deferrals that will depress Boeing’s delivery stream in the coming years.
China’s Big Three airlines report big losses and are seeking government money, according to this ATW Online report. JP Morgan cites ATW Online in reporting that China Eastern plans to defer airplanes, which will affect Airbus and Boeing.
News that China’s airlines are struggling and deferring airplanes is bad news. Airbus and Boeing each tell everyone who will listen that their backlogs are solid, in part because of the geographic diversity. China historically has been a rock-solid customer for both manufacturers, where deliveries were maintained through thick and thin. If China is hurting, the could well be the underpinning that belies the theories at Airbus and Boeing.
Update, 1:45 PM: American Technology Research doesn’t expect the first flight of the 787 until February or March. See this item from James Wallace at The Seattle Post-Intelliencer. This is in line with what we write for our Corporate Website update tomorrow. We also will report a 2Q09 first flight is not beyond the realm of possibility.