Labor situation remains precarious for Boeing
By Helen Jung
Associated Press
SEATTLE — The Boeing Co.'s largest union narrowly voted down a strike and its Machinists union-represented employees are reporting to work.
Bloomberg News Service
But troubles, labor and otherwise, for the world's largest producer of commercial jets are far from over.
Workers on Boeing's fuselage production line may be affected by the company's decision to delay delivery of jets. In the past year, Boeing has cut jetliner production in half and has laid off nearly 30,000 workers. Chief executive Alan Mulally described the outlook for 2004 as "cloudier."
Having recently avoided a strike by the Machinists, Boeing Commercial Airplanes faces similar issues in negotiations with its second-largest union, the Society of Professional Engineering Employees in Aerospace. Contracts for three bargaining units of SPEEA, which represents engineers and technical workers, expire in early December.
Boeing also is awaiting arbitration on its practice of subcontracting work to outside companies, a move challenged by the Machinists.
With reduced commercial jet production and even deeper layoffs possible, the company faces lingering bitterness of Machinists who will work for three years under a contract they overwhelmingly rejected.
"Boeing management has challenges ahead," said David Olson, a labor expert and political science professor at the University of Washington. "They have to be concerned about the morale of workers on the factory floor. They can do things that address the morale issue or they can ignore it, which I think they would do at their peril. ... If Boeing ignores this, their supposed victory will be a hollow one."
The Machinists union, representing 25,000 workers, mostly in commercial jet plants in Washington state, Wichita, Kan., and Portland Ore., failed to muster the two-thirds majority needed to call a strike. Although 62 percent voted to reject Boeing's "best and final" contract proposal, the union requires the membership to adopt the contract if the strike vote fails. It's the first time the union has been unable to back up a rejection with a strike vote.
"It's a bitter pill," said Dennis Warren, an Everett, Wash., factory worker who voted to reject the agreement and go on strike. "There will be more and more job losses."
For its part, the Machinists union said it plans to keep the pressure on Boeing and preserve as many jobs as it can. It is awaiting an arbitrator's ruling on whether subcontracting — at the same time the company has laid off workers — was a violation of a job security clause in the union's 1999 contract.
Labor problems only compound the uncertainty Boeing faces. Some of its biggest customers, including United Airlines and American Airlines, have been devastated by the soft economy and the terrorist attacks. Boeing has negotiated with 58 U.S. and international airline customers to delay delivering more than 500 jets — a year's worth of production — since the attacks.
In the past year, Boeing has cut jet production in half and has laid off nearly 30,000 workers. Alan Mulally, Boeing Commercial Airplanes chief executive, said the recovery is taking longer than expected and the outlook for 2004 is "cloudier."
Labor problems are hitting other Boeing divisions as well, including a strike by about 1,400 workers at Boeing's helicopter plant in suburban Philadelphia.
Like the Machinists, SPEEA objects to its workers being laid off while more work has been outsourced. It is particularly annoyed by the 1993 creation of the Boeing Design Center in Russia, which employs 350 workers doing engineering work that SPEEA said its members should be doing.
SPEEA is negotiating three contracts to cover 19,000 employees, primarily in Washington state and Wichita. The contracts also covers about 1,000 employees in Oregon, California, Texas, Utah and Florida.
In its last contract negotiations in 1999, the union struck for 40 days.
So far, negotiations are in their early stages, and the union hopes to work with Boeing to craft a solution that answers SPEEA's needs as well as Boeing's, said Charles Bofferding, SPEEA executive director.
The company has been discussing "business realities" with SPEEA as it did with the Machinists union, said Boeing spokesman John Kvasnosky. "The overriding business considerations are the same," he said, including "whether there are strategic alliances that we need to help advance our ability to help sell products or to respond to market access."
Boeing needs to keep communicating with its labor force to smooth over upset feelings and to avoid any kind of action or slowdown by Machinists, said Warren Boeker, a professor of strategy at the University of Washington School of Business.
"Especially in tough times, you have to explain your point of view," he said. "The Boeing message has been pretty clear and pretty succinct that times are really tough."
