Boeing in Washington state

[badger]

The union voted against concessions for longterm job security and the reaction was this, according WSJ:
http://s.wsj.net/public/resources/images/BN-AK072_1114bo_G_20131114045632.jpg

Didn't we already go down this road a little recently, when Boeing decided to build another plant in South Carolina because they were sick of Washington state unions holding up production via striking and squabbling?

It was a sound "NO" vote - 67 percent. Link here. (http://online.wsj.com/news/articles/SB10001424052702303289904579196920935090330)

I am not sure if Boeing has a future in Washington state, which is amazing, because the state is prepared to offer $8 billion in incentives to keep work strong up there.

Is it Boeing? Is it right to work vs the unions? Very odd situation. Thoughts?

[Turd_Ferguson]

Fire Obama!!!

[FaninAma]

Why worry? If Boeing pulls out the displaced workers can get unemployment, free medical care, SNAP, housing subsidies, Obama phones and much, much more. Who needs job security?

The new economic reality is that shareholders' interests outweigh labor's interest.

[badger]

I, for one, would welcome the 777X manufacturing in Oklahoma. Is it too late to throw our state into consideration for this mammoth undertaking? I have three words for those who question our candidacy:

RIGHT TO WORK! :D

hey, it worked for south carolina :P

[jkm, the stolen pifwafwi]

Why worry? If Boeing pulls out the displaced workers can get unemployment, free medical care, SNAP, housing subsidies, Obama phones and much, much more. Who needs job security?

The new economic reality is that shareholders' interests outweigh labor's interest.

That isn't really what this is about. The 2 issues that caused the strike was loss of pension and loss of medical insurance for retirees. In other words, direct threats to the ruling caste of a union -> those with the most seniority. There were a lot of less senior people who wanted to take it, but they feared that someone would find out and they'd get ran off. Thus the people with seniority who have the least to fear by them taking the work elsewhere (meaning they are on the tail end of their work career) "ate their young" so to speak to keep their retirement. Heck, most of them probably wanted it this way so Boeing would offer them early retirement.

[bluedogok]

I, for one, would welcome the 777X manufacturing in Oklahoma. Is it too late to throw our state into consideration for this mammoth undertaking? I have three words for those who question our candidacy:

RIGHT TO WORK! :D

hey, it worked for south carolina :P
They have been expanding the engineering center near Tinker AFB in recent years, I could see a push for relocating other facilities to this region.

Some unionists have found out what a "NO" vote can render, just ask the bakers union about how their obstinate position in negotiations with Hostess went. It's pretty bad when you can make the Teamsters look reasonable.

[yermom]

so how many unscrupulous things should labor just accept from management without doing anything about it? Hostess was literally stealing from their retirement fund, among other things.

here is a link not behind a pay wall, in case anyone actually wants to read an article about this:

http://www.reuters.com/article/2013/11/14/us-boeing-unionvote-idUSBRE9AD02120131114

you'd have to offer something pretty good to expect them to agree to losing pensions. i'm still not sure what exactly those terms were though

[jkm, the stolen pifwafwi]

you'd have to offer something pretty good to expect them to agree to losing pensions. i'm still not sure what exactly those terms were though

Pensions as a concept are unsustainable so much that it is cheaper to move your company somewhere else than continue to pay for them. There is a guy in my neighborhood that took early retirement from Boeing at age 48. If the guy lives to be 98 they'll be paying his retirement 2x as long as he worked there. From a company standpoint, pensions are the suck because you can't ever lay those people off if your business hits hard times in the present.

[bluedogok]

Guys like Carl Icahn and Boone Pickens made a bunch of their money by robbing pension funds of the corporations they raided or bought and broke up. The bakers union didn't think the owners of Hostess would close up, they thought they were bluffing and lost. Companies that are mired in debt (for various reasons like for acquisitions or outsized benefit obligations) do things out of desperation. There is reason why the majority of non-union type of corporations have terminated the pension plan and moved to the 401K concept, for one it removes the carrot for the corporate raiders to steal and it clears up a huge balance sheet obligation.

[TheHumanAlphabet]

I hope that Boeing moves all the jobs for the 777-X to a Right to Work state and ****cans all these stupid Union idiots.

[TheHumanAlphabet]

Pensions as a concept are unsustainable so much that it is cheaper to move your company somewhere else than continue to pay for them. There is a guy in my neighborhood that took early retirement from Boeing at age 48. If the guy lives to be 98 they'll be paying his retirement 2x as long as he worked there. From a company standpoint, pensions are the suck because you can't ever lay those people off if your business hits hard times in the present.

jkm...it depends on the company and what recruiting benefit they get they advertise. Without it, they may not be able to recruit people because of the cyclical nature of the business. With my company, I will have a pension (or lump sum offer), SS (supposedly...) and my 401K and company match (hopefully, if the economy doesn't melt down into a 1930s era Depression). They use this as a recruiting tool. Now, I would say my company is probably in a better position than Boeing financially.

[badger]

you'd have to offer something pretty good to expect them to agree to losing pensions. i'm still not sure what exactly those terms were though

Unless I'm mistaken:

Workers get:
- $10,000 approval bonus per worker
- one-time pension boost (pension enhancement to $95 per month per year of service)
- early retirement for some workers (those over 58 years old)

Boeing gets:
- 8-year union contract instead of usual 4
- 4 percent wage increases over the life of the contract (less than past wage increases over same period)
- An end to Boeing’s traditional defined benefit pension plan; an enhanced 401(k) savings plan and a defined contribution pension plan in its place
- Workers’ health care costs would have risen substantially

Boeing cited increased competition from China, Airbus in Alabama, etc. as reasons for needing the concessions. Workers cited all of the wages and benefits built by the unions over decades as reasons for rejecting the new contract.

Union has 2 years left on the current deal. It really seems up in the air where both sides go from here, as Washington state legislators promised nearly $9 billion in tax credits for keeping jobs in-state. That's a tough number for other states to match

[TFSooner]

It really seems up in the air where both sides go from here, as Washington state legislators promised nearly $9 billion in tax credits for keeping jobs in-state. That's a tough number for other states to match

Corporate welfare from such a blue state? Doesn't that go against the democrat party mantra? Won't they fear demonstrations and riots by the Occupy groups?

[badger]

Corporate welfare from such a blue state? Doesn't that go against the democrat party mantra? Won't they fear demonstrations and riots by the Occupy groups?

Here's more info on that -- it was pretty much undisputed in state House and was undisputed in state Senate (http://www.spokesman.com/stories/2013/nov/10/boeing-tax-permit-breaks-sail-through-washington/). The governor mentioned his disappointment in the union after the 67 percent "NO" vote became public.

I do not fault unions for fighting for their own wages and benefits, but as someone earlier cited with the Hostess case, there are consequences to these hard-line stances. Union protestors were sitting around with signs in front of Tulsa's bakery right up till the company went under, even as another union's workers were inside working.

[jkm, the stolen pifwafwi]

jkm...it depends on the company and what recruiting benefit they get they advertise. Without it, they may not be able to recruit people because of the cyclical nature of the business. With my company, I will have a pension (or lump sum offer), SS (supposedly...) and my 401K and company match (hopefully, if the economy doesn't melt down into a 1930s era Depression). They use this as a recruiting tool. Now, I would say my company is probably in a better position than Boeing financially.

Heh, I think you are seriously overestimating how much those in HR care. They take the best candidate within the salary range offered. I've ran into this a lot when I decided to move from contract to FTE. It doesn't matter how much value I can bring to a company based on past projects my salary is out of range so I'm an automatic NO.

[KantoSooner]

It must be very weird to work for a company or at a place that you consider to be your enemy. I imagine it's something like being in prison.
Why don't they go find places they want to work if Boeing is so obnoxious?

[badger]

Update: Sounds like Boeing is going to make the 777x decision next year. (http://www.fitsnews.com/2013/11/18/boeing-will-make-777x-decision-next-year/)

Interesting note from that article is that South Carolina is apparently only about halfway to its production goal of three 787s per month and not expected to reach that level till 2015. Engineers reportedly had to be sent in from Seattle to get things back on track. Ouch.

[KantoSooner]

Just an outsider's perspective, but Boeing seems to have a serious, system-wide problem with bad project management. The 787 has been, not from an airplane perpective, but from a project perspective an un-mitigated disaster, on a par with the Obamacare roll out. Their 737 upgrade was a CF of epic proportions, they've been behind and over-budget on every military project I can think of.
About the only thing that seems to be going smoothly has been their space launch biz.
Not sure what's wrong, but their management team is not covering themselves with glory these days.

[diverdog]

Pensions as a concept are unsustainable so much that it is cheaper to move your company somewhere else than continue to pay for them. There is a guy in my neighborhood that took early retirement from Boeing at age 48. If the guy lives to be 98 they'll be paying his retirement 2x as long as he worked there. From a company standpoint, pensions are the suck because you can't ever lay those people off if your business hits hard times in the present.

So is CEO pay and golden parachutes. I do not see anyone advocating management take a huge hit.

[jkm, the stolen pifwafwi]

So is CEO pay and golden parachutes. I do not see anyone advocating management take a huge hit.

While I agree that CEO pay is asinine, you can't even begin to compare it to Pensions. If you have 10,000 workers for 25 years and they all retire you are then paying for 18,000 workers (10k new + 80% of the others). If you downsize because of sales drops by 1,000 workers, you are then paying for 17,000 workers.

The only 2 ways to get public company CEO pay under control is to a) do something about the board makeup and make sure that it isn't a huge circle jerk for other CEOs and b) make mutual funds fiscally liable if they vote for/abstain on CEO compensation on a company that goes downhill. Having watched proxy votes on stock I own, I've only seen 1 or 2 CEOs get voted down on compensation votes and mutual funds own such large blocks that they have to be just rubber stamping these things.

[KantoSooner]

JKM, you're exactly right. CEO compensation is laid at the feet of the board. And the issue is much more serious than CEO compensation. I have very rarely seen boards seriously challenge senior management decisions at all and that leads to poor decision making. (Mind you, I've only had experience at relatively small companies, but I don't think things are that different among the big boys.)
I have no problem with CEO's making scads of money...if they are producing a similar result for the company. The problem is most aren't.

[Howzit]

you'd have to offer something pretty good to expect them to agree to losing pensions. i'm still not sure what exactly those terms were though

I'm not sure either, but I find it hard to believe that terminating their pension means it disappears and they lose it. More likely, the fund would be discontinued, replaced by a 401k fund (probably with company matching), and then at retirement the union members would still collect on whatever pensions had been collected and funded through the end of the program.


It must be very weird to work for a company or at a place that you consider to be your enemy. I imagine it's something like being in prison.
Why don't they go find places they want to work if Boeing is so obnoxious?

It ain't far from feeling like prison. I worked in corporate management in a Teamster-organized company for several years. After leaving and working for a non-union company, I realized just how miserable it was. I could never go back to that.

[badger]

There's been a few developments since last stab at this, so here goes:

Boeing has a 15-location short list of places to build the 777x (http://www.marketplace.org/topics/business/boeings-15-options-building-777x). Washington state is included. Sadly, I haven't seen Oklahoma mentioned.

However, both Kansas and Missouri appear to be on the list. Here's what Misery's governor's up to (http://www.kmov.com/news/local/St-Louis-competing-for-production-of-Boeing-777X-233603131.html).

Utah's governor claimed (http://www.washingtonpost.com/blogs/govbeat/wp/2013/11/26/states-vie-for-boeing-jobs-after-machinists-vote-down-contract-extension/) Boeing was first to call him after the union vote. Of course, South Carolina's governor said that Boeing was talking to them before the vote.

Of course, it's not like Boeing is the prettiest girl that everyone wants to take to the prom here --- Airbus is using Boeing's problems to get further ahead in the plane biz, including Latin America (http://articles.chicagotribune.com/2013-11-26/business/chi-airbus-boeing-latin-america-20131126_1_airbus-share-u-s-rival-boeing-space-co).

Also, Boeing's having some icing issues (http://www.bloomberg.com/news/2013-11-27/japan-to-issue-warning-to-jal-on-boeing-787-engine-icing-risk.html) as the weather's chilling a bit.

As much as Boeing unionists don't have to care (http://www.columbian.com/news/2013/nov/27/why-polls-dont-matter-to-boeings-machinists-union/) about what everyone else thinks of them, is this a situation where the union members should have been looking out for the greater good, rather than just themselves?

- The Union would have had guaranteed dues collected from thousands (if not tens of thousands) with the new contract for a decade.
- The state of Washington would have had taxes from property and sales (but not income, since they're tax-free in that regard) for a decade from thousands (if not tens of thousands) well paid union workers.
- These jobs would not be at risk of moving overseas, but stayed in the U.S.
- Other states wouldn't be jumping over each other to have the sweetest deal to land these jobs, sure to lead to bitter feelings and more incentives demanded by other industries.

Crazy times. Too bad it's not about jobs in Oklahoma... unless Boeing is the one they're talking about here (http://www.tulsaworld.com/communities/owasso/owasso-city-council-approves-incentive-for-possible-new-employer/article_ee4a7563-85d9-5ba3-a811-9be54eab55cd.html).

[KantoSooner]

Badger, the only way we could do that assembly in Oklahoma would be to relocate the workers here. The workforce here is neither well educated/trained enough nor do we have the sheer numbers of trained folks to handle that sort of influx. Unless and until our state government fixes our education system, these sort of projects are simply outside of our reality.

[FaninAma]

Kanto, Oklahoma has a rich tradition in the aerospace industry. I think Oklahoma at one time had a chance to be THE epicenter of the industry but the cronyism and corruptness of the old Democratic political machine in the state drove away many industrial companies. I still feel that Oklahoma can compete especially considering the military bases that still operate in Oklahoma.....namely Tinker and Altus AFBs.

http://orgs.utulsa.edu/spcol/?p=2798

[badger]

Kanto, Oklahoma has a rich tradition in the aerospace industry. I think Oklahoma at one time had a chance to be THE epicenter of the industry but the cronyism and corruptness of the old Democratic political machine in the state drove away many industrial companies. I still feel that Oklahoma can compete especially considering the military bases that still operate in Oklahoma.....namely Tinker and Altus AFBs.

http://orgs.utulsa.edu/spcol/?p=2798

Agree, I think it'd surprise some people just how advanced us southern states have in the midst of all of our college football rabble rousing. I have a relative working for NASA in Alabama, for example.

We can be just as great as the granola munching stoned hippies of endless-rain country. :P

[RUSH LIMBAUGH is my clone!]

It must be very weird to work for a company or at a place that you consider to be your enemy. I imagine it's something like being in prison.
Why don't they go find places they want to work if Boeing is so obnoxious?Hard to imagine they value their products' quality much, if they despise their employer(s). They only upside is that the union members fly to various places, just like other people, so they might want to have the bolts and rivets work well on the airplanes.

[Soonerjeepman]

I'd see Wichita getting...I'd think they'd have the facilities or at least the skeletal part...and the folks. Been there before.

[KantoSooner]

Fanin, we have a long, storied history in aerospace in this state. Hell, Phillips invented avgas and you can still see the old storage facilities from WWII in the woods across from the Cherokee casino outside Ramona.

But we lost the race post WWII when the West Coast took over the industry. Why? we simply didn't (and don't) have the critical mass of trained workers (from line/floor through to upper middle management) to support a high tech enterprise on that scale. A rule of thumb is that one 'techie' in-house requires another 3-5 in outside/supporting companies to make the thing go. We've got Tinker and we've got Tulsa's maintenance complex in the aerospace field. (yeah, there are more, but those the two that count). They amount to what? Maybe 10-15,000 together? And add another , call it 45,000 in support for a total of somewhere around 60,000 to 65,000 total. A brand new Boeing plant complex would have 25,000 alone. With another maybe 100,000 in support. So, an overnight tripling of Oklahoma's aerospace industry.
People can surely be retrained, but in those numbers? From where? I just don't see that we've laid the foundations in terms of personnel development, to support that sort of leap.
I am not negative on this state whatsoever. I live here, for what that's worth; at least it gives me skin in the game. I just don't see our primary and secondary education systems doing a particularly fine job right now. (and there are lots of reasons for that, many of which I am not privy to). And we do end up paying a price as a state for that.
If I had a choice for OK, I'd say, build on the foundation laid in healthcare and attack the medical equipment market. High margin, high tech, low manpower requirements, lots of peripheral, 'halo', support industrial jobs.