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Our view: Boeing vs. union threatens Dreamliner investment

For decades, aircraft maker Boeing has had rocky relations with the union workers who build its planes in Washington state. Since 1977, the union has gone on strike five times, including a 58-day walkout three years ago that cost Boeing an estimated $2 billion and infuriated some of the company's customers. ( More...

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Brian Bishop 0
Excellent article. A very fair view on the entire issue. I hope more important people than us realize what is at stake here before Boeing becomes the next GM and Airbus rules the world.
indy2001 0
Boeing has made a prudent business move, despite what the union and their lackeys in Washington would have us believe. The unions have made it abundantly clear they would rather see Boeing go down the tubes before they will give an inch, and it is ridiculous to think that our largest exporter would sit back and do nothing. Comparing this great aviation company to BP or the "big banks" is absurd and reeks of desperation. I just hope common sense wins out over labor protectionism. But I'm not holding my breath.

How many times does this scenario have to play out?

Workers need a goes out tells all its customers about how the nasty unions are pushing the price of it products out of line with the competition (notice they fail to mention the absurd management salaries' effects of pricing), the customers rant and rail about the evil union's unreasonable demands (a fair wage for a day's work!!!!) and USA picks up the story and editorializes on it. Beating up on unions is fun and the readers just LOVE it.

Personally, I'd like to see a how management compensation stacks up against the competition. If there needs to be some belt-tightening, let it start in the management suites and THEN let labor follow the leader.
Mark Duell 0
Did management go on strike in 2008, delaying deliveries by months? No.

Management compensation is about an order of magnitude lower than the unionized workgroups. It is not what's driving costs.
andy streit 0
When you consider the NLRB is only a board made up of pro-union organizers, its no wonder Boeing lost the first round. It only makes sense for Boeing to WANT to employee people and build aircraft to become bigger, to move to a state where they can assist in keeping costs down and not having to worry about the possible 58 day work stoppage. The Unions only have themselves to blame for not having 100% of production in Washington. If they weren't so greedy and demanding a raise with the thought of another work stoppage if they don't get it.

I am all for Boeings decision. If the Unions don't like it, then its their right to cry and complain about it (Which they do very well), but they must know the reason for the new plant in S.C. is because of their own actions.
Can both sides negotiate? Yes. but the company went beyond that, it opened a non-union shop. That is just as much a threat to move operations overseas as far as I am concerned.

I have watched company after company instead of negotiating, moving production out. Communities went broke as their tax base in both residential and industrial properties dropped like a lead balloon. Some tried to maintain their status by getting two jobs. Some life eh?

When are we going to learn, that so long as we keep reducing wages in the U.S., that our economy will not keep up? Remember the actions of Henry Ford; “his policy proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy.”

We have instead, gone backwards, pay our employees less, and degraded the standard of living we used to have. Blame not the few Unions that exist today, blame the workers for settling for less and less, and companies wanting to have the U.S. mimic low wage countries. Most of all, blame the U.S. consumer, who wanted cheap, even if it meant their neighbors loosing their jobs.

Both parties can settle this, and both would come out with at least a bit more than they had.
conmanflyer 0
Well, Its just a grab for POWER by the unions. In the Seattle there have been 2000 NEW jobs from boeing since the move. There has been NO lost jobs. Boeing putting the new plant in Charleston is a BUSINESS move. I, and many other americans would rather see the jobs at least remain in the states. I hope that this power grab by unions and the government will be shut down. This is actually turning into govenment overstepping the bounds. :'( shame to see the aviation being so widely attacked these days
conmanflyer 0
PS- thousands of jobs were also added in charleston...
preacher1 0
To: RRKen: There is nothing to settle. The plant has already been built and workers hired. South/non union or not. Better to have the jobs here in the US rather than off shore.Have the Union go to SC and see if they can organize that plant instead of trying to make the government give them something. What they do not realize is that 30-40 years ago, Boeing had no real competition, at least overseas type like they do now. They do now. What unions also fail to realize that when a private company runs out of money, they shut down. They owe nobody a living. They exist by making a profit and a viable existence creates jobs.
The article is slightly off. First, the union agreed to the 10 year no strike clause. Then, Boeing changed it to 12 years. The union again agreed, then Boeing demanded 20 years and the union said no.

An internal memo obtained by subpoena from Boeing by the NLRB shows that the decision to relocate the new plant to South Carolina was to "teach the union a lesson" and not be so hard in negotiating new contracts.

That, is a violation of the National Labor Relations Act and the NLRB had every right to bring the action. The matter is in front of judge and will be decided based on the law. Not rhetoric, not pro-union or anti-union sentiment, but the law.

And, the NLRB is not made up of pro-union organizers. The NLRB is governed by a five-person board and a General Counsel, all of whom are appointed by the President with the consent of the Senate. Board members are appointed to five-year terms and the General Counsel is appointed to a four-year term. The General Counsel acts as a prosecutor and the Board acts as an appellate judicial body from decisions of administrative law judges.

At the moment, there is one vacancy, as the Senate has not acted upon President Obama's appointment.

The chair is held by Wilma Liebman, who was appointed as Chair by President Obama in January, 2009. Wilma B. Liebman has served as a Member of the National Labor Relations Board (NLRB) since November 14, 1997. She was first appointed by President Clinton and confirmed by the Senate to a five-year term that expired on December 16, 2002. She was reappointed by President Bush and confirmed by the Senate to a second term that will expire on August 27, 2011. She was again reappointed by President Bush and confirmed by the Senate to a third term that will expire on August 27, 2016.

Craig Becker was sworn in as a Board Member on April 05, 2010, following his recess appointment by President Obama. Craig Becker has served as Associate General Counsel to both the Service Employees International Union and the American Federation of Labor & Congress of Industrial Organizations. He graduated summa cum laude from Yale College in 1978 and received his J.D. in 1981 from Yale Law School where he was an Editor of the Yale Law Journal. After law school he clerked for the Honorable Donald P. Lay, Chief Judge of the United States Court of Appeals for the Eighth Circuit. For 28 years, he practiced and taught labor law. He was a Professor of Law at the UCLA School of Law between 1989 and 1994 and has also taught at the University of Chicago and Georgetown Law Schools. He has published numerous articles on labor and employment law in scholarly journals, including the Harvard Law Review and Chicago Law Review, and has argued labor and employment cases in virtually every federal court of appeals and before the United States Supreme Court.

Mark Gaston Pearce was sworn in as a Board Member on April 07, 2010, following his recess appointment by President Obama. Mark Gaston Pearce was a founding partner of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux, where he practiced union side labor and employment law before state and federal courts and agencies. In 2008, he was appointed to the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the NY Department of Labor in matters including wage and hour law. Pearce has taught at Cornell University's School of Industrial Labor Relations Extension, and is a Fellow in the College of Labor and Employment Lawyers. Prior to 2002, Pearce practiced union side labor and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his J.D. from State University of New York, and his B.A. from Cornell University.

Brian Hayes was appointed by President Obama in May of 2010. Before becoming a Board Member, Brian Hayes served as the Republican Labor Policy Director for the U.S. Senate Committee on Health, Education, Labor and Pensions. Hayes was in private practice for 25 years representing management clients in labor and employment law, and began his legal career as a clerk for the NLRB's Chief Administrative Law Judge. Hayes later served as counsel to the Board Chairman. He is a graduate of Boston College and Georgetown University Law Center.

Note that President Obama had to resort to using recess appointments to have two of his three appointments seated. The Republicans were very upset over this, failing to recall the President Bush made 7 recess appointments to the NLRB. It is unfortunate that the office has become so politicized, but given the need to have qualified labor law people on the board, they generally are either labor union based or management based.
Bad management=strong unions. Workers don't want to have to unionize. They do so only to protect themselves from predatory management.

If Boeing's management practices continue, the workers in SC will unionize. It would probably have been cheaper for Boeing to treat its workers well than have to relocate plants, but as long as management sees the unions as "the problem" instead of their management practices/policies, it will perpetually have to relocate and run from organizing workers.

Are there abusive unions? Yes, but they are a result of abusive management practices. Managers, get your own house in order first and stop using the unions as scape goats for your ineptitude/greed.
Tom Werner 0
If workers do not want to unionize, why does the UNION REQUIRE they join(and pay dues) in Washington. Shouldn't they speak for their people?
Mark Duell 0
RRKen: The company opened an additional factory (in no way replacing the existing factory) and the workers at that factory chose not to unionize. There's no reason for the NLRB to be telling companies which states they should be opening additional factories in.
Thomas Kovac 0
There have been no jobs lost in Seattle do to the opening of the plant in South Carolina,though it has provided work to thousands of skilled workers.The workers in Seattle,and the Union need to stop their crying and just get over it,or they may find that they are out of a job!
Tom Werner, it depends on the type of shop it is. Not all unions have mandatory membership. That is set by labor law which is subject to the democratic process.

Personally, I think we need much stronger pro-labor laws in this country. The shell games and fake bankruptcies used to rob labor are clearly abusive.

Were US business tactics used in certain European countries there would be open rioting in the streets. However, the American worker (amongst the most productive in the world) has been beaten down for so long that he is easily subdued.

I suspect there is a grass roots revival of unionism coming as a result of falling wages/benefits and the attack on the middle class. Rather than condemn it, managers better change their ways if they want to head it off. The medicine will be bitter and it won't help anyone in the long run.

Bad management is short-sighted and ultimately undergoes a "Darwin-effect"; it is self-limiting.
flynavy001 0
There is plenty of right an wrong to go around in the Boeing verus union debate.

The union position is eroded by the statue in front of the IAM Headquarters in Everett. The statue is not a bunch of skilled workers going to work with their lunch pails, or a proud worker pionting out an aircraft to their child. Rather is is a bunch of picketing strikers (and their children) around a burn barrel. This statue totally overshadows the positive work that the union does for the members and the community.

Unchecked management if a dangerous situation, however to outsiders looking in, the unions at Boeing need to review the image they project. Among the "non-Boeing" there is still a prevailing image of the "Lazy B" in the Seattle area.
Erik Weseman 0
Workers in South Carolina can't unionize as it is a right-to-work state. The government does not have the legal authority to shut down the new Boeing 787 'Dreamliner' plant just because it is located in South Carolina which voted against President Obama in 2008.
Chris Bryant 0
CW Grady - Interesting, because I was living in Seattle at the time and never heard that the union agreed to any no-strike clause - ever. Also, it's interesting to note that the 2 recess appointments are both pro-union lawyers (Becker being a former counsel for SEIU and AFL-CIO, and Pierce practicing "union side" labor and employment law).
Mooneymite - the point is that Washington is NOT a right-to-work state. Boeing is a closed shop up there.
IMHO, even if the ultimate reason for Boeing to build the second (NOT A REPLACEMENT) plant in SC was to "teach the union a lesson," so what??? As long as nobody in Everett lost their job because of it, there really shouldn't be an issue.
Mark Duell 0
BatWeseman: Workers in South Carolina *can* unionize; the former Alenia plant Boeing bought was unionized, and the employees voted the union out after Boeing bought it. In a right to work state you're not coerced into joining a union as a condition of employment.
Jeff Grana 0
The government needs to stay out of this and let the market fix itself. If enough workers get bent-over by Boeing, they will rectify the situation on their own (by creating a union). This is the classic example of Union entitlement mentality: Boeing's workers are hardly taken advantage of, and their union is limiting their ability to be competitive on the world stage, so Boeing expanded operations to a place with fewer complications. If the workers in SC get so disenchanted with Boeing that THEY unionize, then Boeing obviously is doing something wrong. But they haven't, so to me it looks more like the Everett union throwing a temper-tantrum than anything. They're biting the hand that feeds them, even when it feeds them even more of their favorite food.

Unions in general have been outdated for probably two decades already.
Ah, Jeff Grana, you seem to be a "free market advocate"....just let the market correct itself, right?

Unfortunately, the "free market" has been rigged by big money by having unfettered immigration ensuring wages are always depressed. On the one hand, there is not a meaningful minimum wage to bolster income for the working class and on the other hand, there are plenty of skilled and unskilled immigrants to take your job if you don't like working for peanuts.

Free market, my butt! The only thing "free" about the free market is that labor is almost free.

The only legitimate purpose for government is to protect its citizens, but our government is in cahoots with big business to depress wages and ensure cheap labor.

Labor unions outdated? I don't think so! It's just that they've had their legs cut out from under them and rendered powerless by the last six administrations.

And people wonder why the middle class is disappearing?
From Seattlepi, October 28, 2009, following Boeing's announcement to build a plant in Charleston.

EVERETT -- Wandering his union's parking lot across the street from Everett's Paine Field, Charlie Grieser clutched his paper coffee cup as he waded through the news crews toward Snohomish County Executive Aaron Reardon.

Grieser, a Machinists Union member who has been putting airliners together for 32 years at the Boeing Co. plant, didn't need any caffeine to shake off the fall chill. He was fired up by, in his view, his employer's betrayal.

Boeing already took billions in tax credits and handouts, Grieser told Reardon. Now, the company is taking the jobs promised by the 787 program and leaving Washington workers and taxpayers high and dry.

"They were given that money to build the 787 here, not half the 787 here," Grieser said after speaking to Reardon. "I think this is going to poison all of the state on Boeing."

That even half the assembly jobs associated with Boeing's first 21st Century commercial jet might remain in the state remained in question Wednesday evening as the perceived betrayal shook union halls around the Puget Sound. The company's move, at least in the eyes of leaders and members of the unions representing Boeing workers, smacked of union-busting and poor business sense.

Boeing, Machinists' Union district president Tom Wroblewski said, had "betrayed" Washington state's loyalty and used talks over a long-term, no-strike labor contract to leverage a better deal from South Carolina for the second 787 final assembly plant.

"It's now clear that Boeing was only using our talks as a smokescreen, and as a bargaining chip to extort a bigger tax handout from South Carolina," Wroblewski said during a news conference at the union hall in South Park.

Wroblewski said the union offered a 10-year, no-strike contract and was willing to discuss a longer agreement to get Boeing to commit to locating the second 787 line in Everett. Boeing never made any proposals and seemed "stunned" by the union's offer.
skylloyd 0
This whole Boeing thing upsets me to no end, I worked for Boeing for 20 years in Flight Test, I believe it was the best place to work period.
I was loaned to Boeing Witchita for the AF1/AF2 remodel on the 747's.
Kansas is a "right-to-work" state, and I will never forget how the management people treated the non-union machinists, the details are to long to describe,yes, there was a small union there for workers that choose to belong to it, but, the union was weak and carried no weight with the company. If there was a serious problem, we had to contact the Seattle office (IAM) and they had to send a rep. down to Witchita to mediate.
What I am trying to convey here is, without union representation at Boeing, there will be hell to pay, like or dislike the union, try and do without it.
About the contract strike, the young new hires wanted to strike, the older employee's did not, however, the strike gave Boeing ample time to receive parts that were not available when the strike began, outsourcing was the biggest mistake that Boeing ever made, and still is.
Maybe I made it a little clearer, maybe not.
I must ask the question reading some comments. It is not a bad thing to be a competitive company, or country. But where is the limit? How low must we go before more and more people cannot afford homes, cars, even the basic necessities?

The Union involved is trying not to loose ground, and who can blame them? And that is what their members want. They are not irrelevant in today's world either. They are however a target by those who believe that being competitive is the end all. And that dooms the U.S. worker to lower wages, higher costs of benefits (if they get them at all), and lower quality of life. Is that what you really want?

I am not speaking in scare tactics, it has already happened. Why are no Television made in the U.S.? Why is it your car has to have imported products? And what happened to all those people who were displaced by those changes? Are they living the same way as they had before? Or did they have to scale their lives down?

How low are we willing to go?
Brian Bishop 0
@ Erik Weseman - "Workers in South Carolina can't unionize as it is a right-to-work state"

This is blatantly false. Workers are totally free to seek union representation in SC if they choose or any other state for that matter. Similar efforst have taken place at a number of manufactureres all over this state, most noatbly at BMW manufacturing which is about 5 minutes from where I sit. The fact is, when given the CHOICE, workers here do not WANT to be dictated to by their union bosses. The difference here is that the state government guarantees workers that CHOICE. Which is not true in many other, mostly unionized (and also mostly bankrupt) states.

What the union whiners have never understood, and what others have tried countless times to point out, is that they are never owed a job. It is the "entitlement" mentality of the unionized workforce that killed GM. I will never, never, ever, buy another GM product for that very reason. In fact I love my new (fairly new) Hyundai built in ALABAMA!

The CEO of my company's total compensation is right in line or actually a bit less that our industry peers, but guess what - he makes a WHOLE lot more than me. But he is responsible for a 1.4 Billion dollar enterprise. My little slice of the pie is about 1/1000th of that. So he should make 1000 x more than me right? What percentage of the hundreds of billions in revenue that Boeing generates is a guy screing screws into a seat bracket all day long worth? All you "fair wage" people need to get a sense of perspective before you complain about how much money executives make, and how much value you bring to the total product, and how easily you could be replaced. If there are 35 million other people in the US alone (not to mention 845 million worldwide) who can do what you do, how much do you really deserve?
Yes, workers in South Carolina have the right, guaranteed under Federal Law, to unionize. However, they are free to join or leave the union as the mood strikes them. When time comes to negotiate a contract, management simply stonewalls and the union is powerless to do anything about it. If the union calls a strike, the workers will leave the union rather than give up a paycheck and the strike fizzles and contract negotiations with it. Unions have no power and are not recognized by the company so they mean little and accomplish little for the workers.
We 'fair wage' people don't really care so much what the CEO makes. We do however care about paying our bills, and trying to keep up.

If a worker does his best at his job, he is entitled to decent compensation. We tire of company after company cutting or eliminating our retirement, decimating our benefits, and giving us useless perks. Then tell those working people, if they do not give back more, they will move the jobs someplace else.

I am personally quite happy with the performance of our CEO. He has carried the company through a very depressing few years, increased spending on capital, and made the hard cuts needed to balance the books. Those chaps who were cut off, have returned to work, and those assets sidelined, have mostly been put back in to use. It was a hard time, and we are grateful that we weathered it. Yet that does not nullify the love/hate relationship between Labor and Management. Nor should it ignore the fact that during that period of time, the cost of our basic needs have gone up. We feel during that time, we kept up our end of the bargain.
Brian Bishop 0
My income has changed by more than plus or minus 50% over the last ten years and is now higher than ever. My point is, there is no guarantee of a stable job with stable pay anywhere. So who defines "decent"? I care about paying my bills, but when my circumstances change, by bills need to be adjusted accordingly. If the company we work for has to tighten its belt as you describe to get through depressing times, we, individaully have to do the same. It's simply a part of life.
If being a union member was such a great deal, why then would there be this constant in and out of membership as described above? Do you think people really make such decisions based on their "mood"? So you're saying that if you choose to join a union you shouldn't have the choice to un-join? Really?
“Decent” is defined in this case as being able to meet your needs, and have a bit left over. Those basic needs cannot be reduced or “adjusted”. In this area that would be about $60,000 per year as a single person working a 40 hour week. Belt tightening at that level means either your Internets, or cell phone, since you no longer have cable, take vacations, or live in a 2000 sq. foot or greater home.

And you are correct, no one is guaranteed a thing. But, if your a company selling cars, homes, food, or other services, you have to think in terms of can customers afford what I offer. It means your markets are getting smaller, as more jobs are being exported. It becomes a race to the bottom of the drain.

Last, I am not familiar with non-union shop states. But from what I have seen, not many people leave the protections of being a Union member, if for nothing else, to avoid the whims of an employer who will fire you for crossing your eyes. It does happen! As well, it all depends upon what union, it's by-laws, and it's leadership.
Brian Bishop 0
Ken, I will agree with you there, that it all depends on the leadership, both of the employer and of the union. I don't know many managers who would fire someone just for "crossing your eyes", it is way too difficult and expensive to recruit, train and on-board new people these days, especially for specialized type work. The problem is that with most unions, youn't fire anybody for any reason and workers know that and use it to take advantage of that position. Not all, but some. Even without union presence, in a company of any size, with all the threat of lawsuits and discrimination charges it is very difficult to terminate even the most troublesome of employees.
And just for the record - the lifestyle you describe that requires $60K where you live, is about $40K here. It shows where we are as a society that a 2000sq. ft home is now a basic need (for a single person?).


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