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Looks Like Boeing Isn't Playing Around this Time: Boeing machinists reject contract offer

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The IAM voted down Boeing's contract offer today to secure work on the 777X. It would appear Boeing intends to look elsewhere for a location for this work to take place. Going forward it will be interesting to see where the 777X ends up getting assembled. (boeing.mediaroom.com) Mais...

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preacher1
preacher1 4
Well, love or hate the unions; whether the offer was good or bad, as some of the rank and file said in the article, "We protected our union". That's all well and good except that the union don't sign the paychecks and is not owed a thing by Boeing. That said, Boeing is going to have to make good to do something else with the plane, lest it be weakened.
tomhuck
Matt Tran 2
Bring it to Long Beach.
preacher1
preacher1 2
Besides being located in the PRoC, wouldn't they inherit the same union problems they are trying to get away from?
canuck44
canuck44 1
Long Beach has one major problem...it is located in the Peoples Republic of California.

Look for a large wing fabricating plant in a right to work state where finished products can be easily moved to final assembly plants for all the Boeing models, now and future. This vote probably lowered Boeing's cost after a capital investment for a plant.

That leaves a question of location for final assembly of the 777X. Hopefully Boeing has a location outside of Puget Sound available.
joelwiley
joel wiley 3
Minor Clarification: that is PRoSC República Popular del Sur de California.
As opposed either the PR of Davis or Berkeley, or the nascent State of Jefferson.
I know they all seem the same from that side of the Mississippi, but as the AngloSaxon asked, "Angle, or Saxon?".
preacher1
preacher1 1
Smart Aleck. LOL
joelwiley
joel wiley 1
Beware of matches, aren't you under a red-flag warning today?
preacher1
preacher1 1
Nope. LOL
JoshZ
Josh Zylks 1
Seeing as Boeing just signed another monster lease with the Charleston, SC airport to have another few hundred acres to expand, I would think that facility would have a leg up in getting the 777X work.
vernegli
vern egli 2
A great big gift for Boeing, so they can look elsewhere with the unions blessings, as they told them too.
joelwiley
joel wiley 2
"I see no reason for me to bail, the leak is not in my end of the lifeboat!"
or some such attitude.
If the union bosses were doing this to protect their jobs in the next election, it sounds as if they erred somewhat.
;->
preacher1
preacher1 2
Well, as one said on another comment string, the senior union folks were the ones that negotiated this and brought it up for election. The rank and file rejected it. I think they probably thought that Boeing was bluffing. As I said below, if they weren't, they must now make a fairly quick move to show the brotherhood that they weren't or they will lose any advantage they may have gained from this deal. In my opinion, I think they have wanted out of Puget Sound for a long time. They now have their chance and must take it if that is the true direction in which they wish to go.
bishops90
Welcome to South Carolina!
WALLACE24
WALLACE24 1
They get a Pinocchio for this statement. They're so disappointed the celebration may last all nite.
preacher1
preacher1 1
Well, underlying all this was just not the 777x wings, unless I am missing something here. It hasn't been said but there could be other aircraft moved to other locations I guess. To me, that no vote is a "NO CONFIDENCE" in the company. If I wasn't wanted, I'd leave.
PhotoFinish
PhotoFinish 3
Actually, I see it a bit differently. It's a 'NO' vote for changing the pension and healthcare benefits.

In a sense, it's a 'NO' vote for their future. They're stuck trying to hold onto the past.

There is no doubt, that there will be massive structural changes to their health care and pension benefits. The only question is how many aircraft and aircraft components they will have to lose to other locations to finally accept the future.

This makes it that much more likely there willbe a strike at the end of the current contract in a few years. The union will now want job protection clauses to prevent the eventual plant closings and terminations thar will be coming. They will not get those.

Boeing will have a very bad year and will have production at northwest facilities come to stop for an extended time. But they'll endure the devastation to their production timelines and to their financials, in order to protect the long term competitiveness and viability of the company and all the jobs, no matter where they are.

It's going to get messy. There will be strikes. There will be plant closings. There will be list jobs. There will be increased unemployment in manufacturing. There will be home foreclosures.

Seattle area will become like any other rustbelt state. The sad part is that labor and management could work together now before the problem arises. Or they can work together after worldwide competition dramatically alters their job prospects and employment.

The only difference is whether Boeing can save their company and/or prevent it from going into bankruptcy. That's why they're trying to make the changes years in advance, while they have world leading production and ample revenues. Waiting would devastate their company and the jobs.
preacher1
preacher1 1
Well, in order for this to happen, the union is going to have to change leadership and get one that will work with Boeing, accepting this new reality, rather than be adversarial as it has; and one that can convince the rank and file that it must do the same. That is a tall order and Boeing must be able to recognize it and warm to it as well, if it should happen.
WALLACE24
WALLACE24 4
You are absolutely right about the leadership of the unions. Their mafia style leadership hasn't been cutting it for a couple decades. If they can't see what's happening and adapt they are committing suicide.
PhotoFinish
PhotoFinish 1
Normally, I would blame the unions too. Often, it is their fault. Their impact in helping to create yhr rest belt probably can't be underestimated.

But in this case, they negotiated responsibly, and signed off on the agreement. It would bring more great jobs to the area. It would put pensions in employee accounts like most other 'great jobs' already do. It would bring cost control to out-of-control healthcare costs (but entirely at the discretion of each individual employee and family to make the cost benefit decisions themselves, like most other workers with 'great jobs' already do.

It would've guaranteed a long-term contract with known conditions. Workers would have a more certain future with known and predictable employment conditions. The company would also have the sand long-term known conditions and could bring more and more work to the area.

The unions agreed to it. The rank and file voted against it.

In the absence of an agreement, jobs will continue to bd lost to other locations. Either at the direction of Boeing, of at the direction of the market.

Best would ve xn agreement. Best for Boeing. They'd rather continue to employ their highly trained workers happily making planes. They don't want future strikes and disgruntled employees over the next decade or two as jobs keep evaporating. They won't be happier to have workers begrudging acquiescing to the changed conditions in desperate conditions (for workers and company finances). I'm sure Boeing would prefer a happy, productive and growing work force.

But if they have to deal with the future mess, they have to.

The management and union leaders agree to tackle the problems early, now, when they're plenty of money to go around.

The rank and file didn't agree.
preacher1
preacher1 1
I thought the Union Leadership was shown as tearing up the contract and calling it crap last week????????????????????
PhotoFinish
PhotoFinish 1
It was a senior union member, but it may have been a plant union leader. The union management clearly negotiated and signed off on the agreement. Wouldn't make sense for those who helped draft an agreement, to tear it up.
preacher1
preacher1 1
PhotoFinish
PhotoFinish 1
But every member had a vote, an equal vote.
preacher1
preacher1 1
In a lot of cases, the Leadership has been trying to feather their own nest rather than fairly try and lead/speak for the rank and file. As they are the duly elected voice of the workers, a company must accept them as they speak/act, and assume they are speaking for the rank and file, hence the relationship, good or bad. There are some in ALPA like that as well and that is what is causing a lot of grief in the airline industry.
PhotoFinish
PhotoFinish 1
I wanted to agree with you. In fact, when I read it the first time I sounded right. 'It's those unions.'

It usually is. But this time, they negotiated a strong contract that would've kept many great jobs on the area for decades. They agreed to 2 important structural reforms of healthcare and pension benefits. These would work to control healthcare costs at workers' descretion by having each worker make better informed decisions as to cost and benefit of treatment. Also, would have employees get their retirement contributes paid directly into their own retirement accounts now in the years in which the workers actually do the work to build planes. Making the payments now, would protect workers future pensions from the uncertainty of future markets, competition, and company bankruptcy, when and if future revenue would be inadequate to fund pension liabilities created today.

But, it was the rank and file workers who voted it down.

I'm not going to patronize the workers, by suggesting that they wouldn't vote in their own best interest (or at least how they perceive their own interests). Further, I wouldn't suggest that they don't understand the issues. This is their future livelihood at stake. Not yours or mine.

All I can say, is that their choice seems to differ from what I would choose for the long-term health of continued aircraft manufacturing jobs in the area. But then again, it's their jobs, their families, their choice.
preacher1
preacher1 1
Well, as you say and allude to, they are all grown folks and it is their future. It will be interesting to see what that future brings. Boeing is not a fly by night operation and cannot just pull up stakes and say bye but they have now been unleashed to do what is best for their company so we shall see.
WALLACE24
WALLACE24 1
On the flip side of the coin, Boeing is a corporation with shareholders and the management will always do what is in the best interest of said corp. The union (rank and file) need to position themselves as being in the best interest of the corp. if they are interested in long term employment.
preacher1
preacher1 1
I couldn't agree with you more, but they apparently did not.
vernegli
vern egli 1
I would look for them too find a good right to work state to move these to in the very near future.... If I was them I would have a smile on my face, they were just given a great big gift.
RRKen
Who can blame the workers? I cannot, and let me explain why.

In the 80's our company unilaterally changed our indexed pension to a 401K. One man lost $100,000 in value four years from his retirement. What did he have to look forward to?

In 1990, my Father retired to nothing despite a union pension. Except the companies decided that with only three men left living, they could not be bothered to make contributions.

In the same period, workers for Wisconsin Steel found out after the plant closed, there was no money in the pension fund. It just evaporated (despite the former owner of the plant, International Harvester maintaining it's obligations before the sale).

What was left for these folks? Social Security? Our elected representatives pat themselves on the back saying they "save" that system, despite their knowing the fact that no one can honestly survive on it.

I woke up in the 90's and got out of that scheme, and have an indexed pension no one can touch, and is self funded. No Social Security. No thoughts in the back of the mind that the company will ignore it's obligations.

Yes, with all that in mind, and your late in your career as many of those machinists who voted, who can really blame them? They spent their whole lives thinking they have that carrot waiting for them at age 60.

Now many here think it's appropriate to change the rules again, for some, so late in the game?

Humbug I tell you!
PhotoFinish
PhotoFinish 3
Your examples illustrate why it's preferable for workers to have their own retirement funds in their own retirement account, invested safely in low-fee long-term investments, balanced over the decades -- more growth earlier in life and more income closer to retirement, when payouts draw down principal.

Your colleague's $100,000 decrease in value may have coincided with the market collapse in 2008. In that case, if your colleague didn't overreact and just let the stock market recover, he'd have the entire $100,000 loss back now, plus a whole lot more.

For very long term investment, like retirement, in which contributions are made over many years and payout is far in the future, some say that investments (like low-fee index funds that track the upward trend of the market) are the best way to accumulate the largest retirement pot. Plus it seems like a safer bet, to bet on the average of the entire market or the entire economy, rather than trust your retirement to continued financial health of the company that you work for in the past to be around to pay your pension decades into the future. Not to mention that you'd have to trust the ethics of every company and union manager with an oversight role over your retirement funds from the first day you start earning your pension until the last day in which you collect a pension payment (which for most people is their entire natural adult life).

Plus when other people have control over your retirement money, they may not always make the best decisions to protect the long-term value of your money. Every time you see union officials or company managers driving around fancy expensive cars and living in huge mansions, you have to worry about your retirement benefits that are only payable decades from now. I don't just mean theft (which happens), I also mean nickel and diming your pension funds legally through fees, for themselves and their friends they hire to 'manage' your funds.

Manage your own funds (by not over-managing them) in your own account, and by not having others over-manage lots of fees out of your money in union or comment pension funds (or even your own retirement account). The problem even carries over to company or union managed 401k accounts. It's just easier to see the effects of their 'funds management' when your name is on the top of an account statement. The stealing (legal and otherwise) also happens in pension funds (just more invisibly).

If you don't get the message -- get your money under your control. If you steal your own money fir a good cause or a bad one, at least it was yours to take. But if you just key it ride, you'll do vest without all those 'fund managers' happily living a lavish lifestyle on your retirement funds.
Moviela
Walk straight down Main Street. When you pass through the castle you'll be in Fantasyland. That is the place where people who manage their own money find out that that the banks and Wall St. are stealing your equity as fast as you can assemble it. There is some nickel and diming as you say, but it is really a billion here, a billion there, pretty soon you're talking about real money. Apologies to Sen. Dirksen for the use of his quote.
PhotoFinish
PhotoFinish 2
They get their grubby hands on your money no matter where you save it. That's why parking your money in low fee index funds, your investments' yield will equal that of the overall market, and be higher than most actively managed funds, without the churn nor the fees. You may want to balance toward growth early on and income later on, but straight-up index works throughout.

Just put it in, and let it sit there for your retirement. You don't want your money paying for union officials', company managers', nor wall st bankers' lavish lifestyles today. Don't fall into the mistaken belief that it matters who' taking your money. If it isn't you, it's stealing, even when done legally.
preacher1
preacher1 1
Long Beach put their bid in yesterday. Horsepower from LA county to the governor. This will all be interesting
upchucked
(Duplicate Squawk Submitted)

Boeing machinists reject contract offer

Boeing made an offer aimed at ending decades of benefits and payment agreements which the union members rejected.

http://seattletimes.com/html/businesstechnology/2022253577_boeingmachinistvotexml.html

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