Boeing Strike - Beginning Of The End In Sight?
October 9th, 2008
After weeks of talking about one another, rather than to one another, Boeing and the IAM union decision to seek mediation to resolve contractual differences after over five weeks of disruption points to both sides seeking to close the gap and end the strike that has left dozens of airplanes unfinished on the flight lines and hampered the 7-series production lines.
“We are interested in exploring whether there is a path forward to resolve the strike. There are a number of issues to resolve, and any agreement must allow us to remain competitive and provide the flexibility to manage our business,” said Doug Kight, Boeing vice president of Human Resources.
Image courtesy of Matt Cawby
For its part, the IAM was markedly more upbeat about the new round of talks.
“We are working out the details of the return to the table with the federal mediator.
We hope this meeting marks a major step forward. The Union will continue to do everything possible to bargain a contract that addresses the concerns our members have identified.“
With many customers now voicing concerns about deliveries and possibly face more delays to the 787, some remain sceptical that a deal will be reached any time soon.
Image courtesy of Boeing
One major 777 and 787 customer who declined to be identified offered this assessment.
“Its good that both sides are going to sit down and discuss things. For us, the facts on the ground remain unresolved - we’re waiting for our airplanes and there is no sign of them arriving yet. The quicker everything is fixed the quicker we can start accepting the airplanes we’ve ordered.“
Analyst Harry Nourse had already predicted that the strike would not last more than two months.
“Given the general direction of the economy and the approaching holiday season, we think that the chances of a strike lasting much beyond two months are relatively small,” he noted.
With Boeing’s third quarter earnings call due in just under a couple of weeks time, all eyes and questions are going to be on what steps the company will take to ensure it doesn’t run the risk of the second major union, the SPEEA, walking off the job in protest.
Critically, with an early 2009 first flight of the 787 and inevitable slip in certification for the world’s first major composite built widebody airplane, a target of a late November/early December 2009 service entry still remains possible, depending on how well the flight test programme progresses. This site has already predicted that 2009 may possibly see just 10 or fewer 787 deliveries, in line with Wall Street consensus.
Customers can only hope that any new slippage as a result of the industrial action does not push the 787’s first delivery into 2010.
As stated before, convergence is key to ending the dispute.
(Prior articles on the Boeing/IAM strike can be found by clicking these links here, here, here, here, here, here, here, here, here, here and here. )
Sphere: Related ContentEntry Filed under: Airlines
22 Comments Add your own
1. Graphite Epoxy | October 9th, 2008 at 7:41 am
I’m not confident that this is going to amount to anything.
I think Boeing is out to yank our chains. To get our hopes of a settlement up, and then to crush them, in the false hope of weakening the IAM member’s resolve. They consistently underestimate, misread, and ignore us. I see no evidence of change in that.
All IAM members should be very circumspect, if not outright cynical of this development, keeping in mind what took place in 1995, as well as the psychological warfare campaign that Boeing has undertaken for the last couple of days. Those sabers didn’t get rattled for no reason.
I hope I’m wrong in my estimation of the situation, but the company’s track record where good faith bargaining is the issue, is extraordinarily poor.
2. aircraft_painter | October 9th, 2008 at 7:48 am
Graphite - very well said, especially your last line.
My prediction is that Boeing will come back with almost the same offer but throw a bit more upfront cash at us (the IAM workers) and HOPE that the upcoming holiday seasons will weaken our resolve.
I hope the IAM stays strong!
Did anyone mention that Boeing too asked for money in the 700 billion bail out program?
3. Jon | October 9th, 2008 at 8:06 am
I echo the first posters sentiment; we need to keep are expectations in check. Your dealing with a company that doesn’t respect it’s workforce and underestimates us in every sense.
Most of us know that we were the fall guy for a likely 787 delay. Unless we all can compromise, there is little doubt in my mind, we will be back on the picket line.
As far as the 700 billion bailout; there is also billions being loaned out by the government for business. I have no doubt Boeing will be one of those in line. We already have seen AIG use the tax payers funds for a nice 400,000 vacation of it’s top salesman.
I urge very machinist to watch a film called “Maxed out” dealing with credit in the US. Teach your kids well.
4. Angel/MT-4 | October 9th, 2008 at 8:58 am
After reading the recent articles released to the media, my theory is that Boeing first tried to make the BAFO sound like a “fabulous” deal in hopes to win our votes (but failed) and now that they have surpassed the 30-day minimum of the strike to be relieved of paying any fines, they are turning to the media once again, but this time using intimidation and threats of moving production to places like Alabama (resulting in the loss of our jobs). So, now they say they want to “talk”, but I’m wagering that we will see the exact same contract with perhaps the same $2,500 + $2,500 attached in hopes that they will now get the 50%+1 that it takes to win the vote and get us back to work.
5. mike j | October 9th, 2008 at 9:08 am
I share similar sentiment as bloggers 1, 2, and, 3. But I’m glad to see “movement”.
Boeing is expert at psychological tactics.
I’ll add Boeing is likely to merely “test the waters” with some rearraged numbers to see what our action/reaction is.
I never ever trust Boeing Management at face-value. Nothing they say is true, and they have a trackrecord of deception to the workforce.
But I too hope I am wrong, as I do miss my paychecks.
Regarding 787, (if and when we return to work) I’ll be surprised if it flies within six months, because THAT is how far behind it was prior to the strike .
6. Jerrold | October 9th, 2008 at 10:09 am
Good news and hopefully will result in finding a middle ground and new contract.
The five comments above are examples of negative and cynical thinking. These are people who seem to prefer a strike and enjoy the opportunity to grouse and complain.
The improved prospects of returning to work does not interest them because then they will have one less thing to criticize or be negative about.
Good luck to this new contract effort!
7. Grace | October 9th, 2008 at 11:07 am
It is all rigged. You are a work force that got stripped of 2 trillion in retirement from every venue out thee. There is nothing left of Cinderella. This meltdown in the marketplace only leaves the worker trying to bailout what he did not see. I’m sure McNerney was invited to Regis for pampering. The IAM had an insiders invite to this delay and market kill. They have Boeing stock and are on the board. This is not you mommy and dads Boeing anymoreL Let’s get back to work!
8. Jacobin777 | October 9th, 2008 at 3:45 pm
Does “General Motors” ring a bell? I see the SAME hubris and attitude here that I did with the GM employees years ago….
I guess the fact GM’s stock at 1957 lows doesn’t mean anything to anyone…go figure..
9. HN | October 9th, 2008 at 4:00 pm
Some one said that the company doesn’t respect the workforce, give me a break. What do you expect when you are pay 2-3 times higher than the rest of other industries? When you make double to triple the average folks, they layoff people, and when they make a recall, you are more than happy to be back. What’s what happen when you get pay too much. The working condition is more than great. Boeing machinist use to be able to bring novels, magazine in and read while working. That’s a fact there, I have friends that do that.
I am so tire of the strike, it effects everyone so much. Just tell them to lower your salary, in exchange for job security. Can’t expect high paying and security at the same time. B/c they’ll know you be crawling back once they make a recall. It’s just like renting employees.
10. Jon | October 9th, 2008 at 7:51 pm
So your premise is to get paid a lot less and then the company will show some love?
Also, I don’t see anyone reading books, magazines or anything else, except those running machines who have some free time. Everyone else has to work non stop.
Lastly, we are building some of the most complex parts for any industry; perhaps this is why the pay is higher.
I have heard management say we are about 9 percent cost of the overall airplane.
I suggest if the company wants it down to 5 percent; they start looking in the mirror and seeing how they can thin out layer after layer of redundant management. In the last downturn, we saw the only ones they didn’t downsize was all the levels of management. Not to mention paper pushers, chart makers; Perhaps you can use some help from the IAM on how to reduce overhead waste!
11. DonS | October 9th, 2008 at 8:38 pm
The following was sent this AM - and no doubt received
To: doug kight, robert janetka
From: suppressed
Subject: ETHICAL NEGOTIATIONS -LACK OF
Cc: rayg–ea.org, spe–ea.org,Co—iam751.org
It is past time for both Mr Janetka- Boeing Pension Plan Administrator, and Mr Kight to come forward and honestly answer the questions and statements in the following email copy of a letter sent in July of this year.
I also believe IAM and SPEEA have every right to demand an answer in addition to unrestricted access publication of the legal plan documents which are part of every contract for 401K,Medical, and Pension.
I find Mr Janetkas’ efforts to falsify letters never sent to be outrageous and unethical, especially when acting as plan administrator. The most recent attempt was to forward to EBSA a letter supposedly sent on August 15th to myself. I challenge him to provide proof of mailing or receipt.
You may note name is not completely shown, but everyone involved knows exactly who I am. My name is not shown simply because for over a year, Boeing has set up significant filters which normally block any of my emails. And yes, the Board of Directors and the General Counsel are also aware of Boeing efforts in this regard.
Sent on July 2 and again on July 17, 2008
Refs: A- Plan Documents Extracts for 2005 AND 2007 BCERP
B- SPD FOR 2007- (A12978) AND SPD 2003 EDITION BCERP
C- Mr Bofferdings Confirmation of 25 year award- Attached 2 pages
D - XXXXXX
E - US v Phillips, E. B Rich, USX Corporation 19f3d 1565 May 1994
SUBJECT: QUERY REGARDING PENSION SERVICE AWARDS
Plan Administrator :
During the 2005 Negotiations between SPEEA and Boeing, Mr Bofferding was
apparently awarded a leather jacket along with or as part of a 25 year service award.
(Ref. C). This service award appears to have violated the 10 year vested pension
service limits clearly described in (Ref. A) by approximately 5 years. The award of the
leather jacket mentioned by Mr. Bofferding appears to be either a pension service
related gift with a value in excess of a normal 25 year service award, or (a) gift outside
the ambit of exclusions noted in 29 USC 186. I note that Mr Bofferding still shows as
being on LOA in the Boeing Blues system, even though he was terminated by SPEEA
in July 2007.
I also note no mention in (Ref.B) SPDs of the maximum 10 year vested pension
service awards available to Boeing employees on approved leave and working full
time for a union. This appears to be an ongoing violation of ERISA as described in 29
USC 1131 e.g. (Ref E).
I note that the SPD for the PVP is also deficient in the same manner, except there appears to be no limit on credited service for Union employment.
I believe these undisclosed benefits and awards may have negatively impacted
pension benefits and/or negotiations of all employees for the benefit of those few
who were aware.
Please answer and explain the following:
1) Did the 25 year service award given to Mr Bofferding in November 2005
include approximately the same amount of vested credited pension service to be used
in determining pension benefits ?
2) At the time of Mr Bofferdings’ termination from SPEEA in July 2007,
were his recorded vested pension credited service benefits in excess of the plan limits
which would allow an approximate maximum of 21 years ? Was his vested pension
credited service in excess of 25 years?
3) Must a Union notify Boeing when the applicable union employee (ex-Boeing)
takes an extended Union LOA which is in excess of the Boeing Plan limits?
4) What provisions are there for tracking the minimum 1000 hour/year of
(Union) employment to gain vested pension service as required for all other
employees ?
5) Why has the pension service for Union employment not been disclosed
in previous and current SPD?
6) I note that Boeing usually publishes names and individual service awards (5
year increment), but no such mention has been found for Mr. Bofferdings’ award(s) or
that of other ex-Boeing employees who have accumulated similar Union service
awards.?
7) What publicly available policy(s) or documents are in place regarding
the above service and award issues, including provisions for notification to all
employees of the above mentioned union employment benefits?
Thank you
Don—per — XXXXXXX
12. Ogre | October 9th, 2008 at 9:45 pm
with all the chrsitmas things out, the resumption of talks is a good motivator for people to loosen their spending, only to find that an agreement still can’t be reached.
13. cathi | October 9th, 2008 at 10:05 pm
Now that the economy overall is going low, it doesn’t mean that Boeing’s contracts are going to disappear. There is no rule that says one company tanks all the other ones do too!
It is more important than ever for the machinists to see a big move upward for retirement. A $100 per month of service is not that big a deal to Boeing. Translates into $9000 a year for the average wage. That is a big deal for my hubby and , it means we can buy groceries when we retire. Food and a Home isn’t all that much to ask. We have an inexpensive mortgage and we have no other bills but we could not feed ourselves in retirement at this mpoint unless boeing gives a little more. They are always asking the employees to give more, like doubling their workload while taking away work area to do it in. This is for us THE BIG ISSUE> that and medical.
And boeing might get pertially bailed out of that when the “NEW” government is in Charge. WAHOO!!
Come on Boeing, when your CEO makes more by noon on the first day of the new year then my hubby makes in a year, what’s $9000 a year more for retirement??????????
14. My Two Cents | October 9th, 2008 at 10:34 pm
Both sides talking is always a sign of hope. However, as many have pointed out - Boeing’s executive management and negotiating team have showcased their strategy through the media for all to bear witness to.
Each and every interview, conversation, and even management memo – has been carefully crafted with both innuendo and direct threats to our jobs. Their last interview (published locally as well as nationally) was intentionally aimed at placing the blame for their corporate level mistakes on the IAM-SPEAA union workers.
Their one very brief statement by the CEO - “While we’ve disappointed customers for other reasons in recent years, too” - completely glossed over the fact that the executive decisions regarding outsourcing and utilizing non acceptable measures for doing and securing business has cost our company tens of millions of dollars in fines, hundreds of millions of dollars in revenue, and billions of dollars in contracts. This all being outside of the three separate delays in the 787 – directly related to the outsourcing of parts and procedures the IAM has successfully delivered on time, and under budget for decades.
I think that the union members are cautiously optimistic – but by no means are we any less focused on obtaining what we originally were forced to put into motion by the company’s lack of foresight. We do remember 95, and while we abhor being on strike, we have drawn our line in the sand.
15. Jerrold | October 9th, 2008 at 11:18 pm
Maybe one other person responding to this was hopeful of a reasonable chance for a settlement…all others are either too skeptical or cynical or just cannot believe that there is common ground.
Its always the same characters on all the Blogs or articles I read that state these negative thoughts. It seems they are convinced or wish to convince others that there is no possibility of a fair arrangement.
Don S writes these lengthy and complicated responses about some arcane retirement matter that should be explored by the Union and discussed. You have to be a lawyer or accountant to follow what he is saying and I suspect it is not too central to most people. Everyone has their particular injustice.
Aren’t there others who have some faith in a settlement that works or is this really an insurmountable difference and they are hoping for “punishment” rather than agreement. I really do not understand all the pessimism and negativity that is always present.
There is something very wrong in all these blogs…it is either black or white…and the world igenerally functions in some shade of both. That does not seem to be understood here. Everyone is so focused on their own insistance that they fail to see the larger picture and how that can happen.
Once again, for the sake of the Workers, the Company, the Pacific Northwest and America, get this thing settled and start to contribute to the American economy which is great need of a boost.
16. Bworker | October 10th, 2008 at 5:33 am
I find it very suspect that the company would be talking “Hardball” one day. Then in the blink of an eye want to get back to the table. I expect to see nothing positive come of it, but I hope I’m wrong. I guess we all know where we really stand in the eyes of management don’t we?
17. DonS | October 10th, 2008 at 6:27 am
MR JERROLD ? “Don S writes these lengthy and complicated responses about some arcane retirement matter that should be explored by the Union and discussed. You have to be a lawyer or accountant to follow what he is saying and I suspect it is not too central to most people. Everyone has their particular injustice.”
+++
I wonder why you find unethical and criminal acts on behalf of boeing and certain union officials “arcane”
And why ripping off thousands of retirees to the tune of hundreds to thousands of $$/year ARCANE or claim it is some sort of ‘ personal ‘ injustice or vendetta. ?
bribery is a criminal offense- and is either a misdemeanor <> 1000.
Of course what you dont see is the records, the witness statements, the admissions, or the ongoing cover up by both sides. And dont take the apparent lack of details or expecting an immediate cuffing by the feds as an indication of no interest or no action.
agencies work like any large company- resources, time, proof, research, and the like take time . typically 2 to 4 years before an indictment is made.
In this case, it should not be a surprise that the Boeing Plan administrator is reluctant to put anything in writing. The person who acts as plan administrator under ERISA has an absolute fiduciary responsibility to the participants. And he/she absolutely commits the company regarding correctness and candor. The punishement for lying or misleading is very stiff. So he/she must tell the truth, cannot mislead, and MUST ANSWER. And that answer will be put up against eye witnesses - at least 8 - and written admissions as to events. As to the ripoffs ovr the years, the ARCANE regualtion has to do with YOU CANNOT REDUCE THE RATE OF ACCURAL WITHOUT NOTICE.
in any case, I would appreciate just what part of my posts you believe are ARCANE and strictly personal ??
Don
18. DonS | October 10th, 2008 at 6:40 am
re cathi - it seems that you are confused regarding the 100/month- 9000/year retirement n umbers
The request is for 100/month per year of service so at 30 years when you retire, the annual amount would be 100 * 30 * 12 = 36000/year as compared to 70 * 30 * 12 or 25200/year. I might note that a review of the AVERAGE pension payment for ALL retirees under the BCERP plan in 2006 was about $10900 /year for 68,000 receiving benefits and for the 623 retirees retiring during the year 2006 being about 24,800
don
19. Grace | October 10th, 2008 at 7:15 am
Guys we are hungery and need to generate some active cash flow. A bomber jacket is disgusting but AIG is the parent company to Boeing leasing. The Boeing Execs were invited and can anyone attest to where Bofferding and Blondin were? Facials and 4 together. This was a bad strike based on greed.We could not access our VIP or equity because it would exacerbate this financial crisis. Vote to eat. Get back to work
20. mike j | October 10th, 2008 at 12:30 pm
For Jerrold blogger #15,
In order to understand the “pessimissm and the negativity” you’d need to have worked at Boeing in one capacity or another, and experience it firsthand.
Anyone looking at this labor dispute from the outside wouldn’t understand, and that IS one of Boeing Managment’s tactics: to publicize everything we do, but not publicize what they do.
Also us IAM do not succum to any of Boeing’s or other’s scare tactics, yet we all know what is at stake.
But cautious optimism is good enough.
We’ll know by Monday I think.
21. DonS | October 10th, 2008 at 3:40 pm
GRACE “The Boeing Execs were invited and can anyone attest to where Bofferding and Blondin were?
1) The jacket and pension perks were during the 2005 negotiations with SPEEA. Blondin was not there or involved
2) The boeing team ( 4 to 6) called the SPEEA team into a special meeting in the evening- during negotiations near the last few days
3) The awards - jacket- 25 year plaque - and speech were witnessed by the SPEEA team ( approx 8 people) and the Boeing team . Photos may have been taken
4) Mr bofferding in November 2007 admitted to getting a jacket via email - and a few other team members also admitted to the award and presentation
5) the legal plan docs only allow 10 years additional , in Boffo case, his max award would be 20 to 21 years
6) it takes 40 years of credited service to get enough boeing points to get such a jacket from the boeing store
http://tinyurl.com/2ed3sh
http://tinyurl.com/25t94s
http://tinyurl.com/yqvc8v
http://tinyurl.com/yqd4fz
http://tinyurl.com/ynvtz7
22. mike j | October 13th, 2008 at 3:30 am
Some two-cent notes on Doug Kights statement early in this article:
“…exploring WHETHER there is a path foreward to resolve the strike.” (means there might/might not be one, maybe a lockout/new workforce?).
And “…provide the flexability to manage our business.”(means Boeing wants to outsource however they feel like).
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