Boeing Has Outmaneuvered Its Union

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The international labor union representing some 32,000 workers at Boeing Co. (NYSE: BA) has forced a January 3 vote on a revised contract offer that Boeing has said must be approved if the company is to build its 777X mini-jumbo jet in Washington state. The local union chapter rejected the revised offer nine days ago without even bringing the it up for a vote of the full membership.

The International Association of Machinists & Aerospace Workers (IAM) that represents the Boeing workers supports the revised offer from the company, while the local chapter is firmly opposed to it. The two main issues are a change from a defined benefit pension plan to a defined contributions plan and a revised salary scale. After the local IAM rejected the first contract offer from Boeing which proposed the change to the pension plan and a lower wage scale, Boeing reportedly offered to revert to the salary plan now in place, but insists on the change to the pension plan.

And what does the local union think of the vote and the Boeing offer? From Local 751’s website:

Despite objections from District 751 leadership, the International has insisted on a vote on January 3rd to ensure you spend your holidays studying and debating a concessionary proposal that is largely unchanged from the one you rejected by a 2-to-1 margin on Nov. 13.

Because of the massive takeaways, the Union is adamantly recommending members reject this offer (more information to come). Members need to look at the facts of the economic destruction they would live under for the next 11 years — without any opportunity to change those economic proposals or any other provision of the contract. And all of this comes as Boeing is experiencing record profits and backlogs, not to mention the $10 billion stock buy back the Boeing Board approved just this last week.

Boeing has managed to split the local union from its national leadership, and it is quite likely that the the company has also managed to split the local union on the basis of age. Older workers who will be retiring sooner want to keep the pension plan as is. Younger workers want to keep their jobs and guarantee those jobs for the next decade or more.

However the vote turns out, Boeing wins and the union loses. If the contract is rejected, the company still has more than 50 locations in 21 states bidding on the 777X manufacturing plants, and it is virtually certain that a non-union location will be selected. Boeing will get to do whatever it wants with pensions and salaries.

If the contract is approved, Boeing gets out from under its pension obligations after succeeding in splitting the local union from its national leadership. The more militant local union will be essentially broken. The company can’t lose.