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Boeing contract underscores decline of union clout

A Seattle-area union's close vote ceding hard-won benefits to keep production of a Boeing airliner in the area illustrates the waning clout of labor unions nationwide.

January 06, 2014|By W.J. Hennigan and Maria L. La Ganga
  • Seattle-area machinist union members rally against a contract with Boeing that included concessions on pensions. In the end, members narrowly approved it after Boeing threatened to take production of the new 777X airliner to another state.
Seattle-area machinist union members rally against a contract with Boeing… (Elaine Thompson / Associated…)

SEATTLE — After battling for months with Boeing Co.'s leadership, the company's largest union approved an eight-year contract that trades hard-fought pension benefits for the right to build the 777X airliner — a bitterly fought concession that underscores unions' uphill battle at the bargaining table.

The contract approved late Friday was negotiated not with a bankrupt city or a struggling manufacturer, but with a company that delivered a record 648 planes last year and whose shares traded at all-time highs on the New York Stock Exchange.

It's part of a larger trend for labor unions, which face dramatic declines in membership strength, reduced bargaining power because of right-to-work states and hostile public opinion.

"The fact that Boeing is doing this is going to send a message to other companies — we can now put that on the table," said Leon Grunberg, a University of Puget Sound sociology professor who co-wrote "Turbulence: Boeing and the State of American Workers and Managers."

"Unions are in retreat and they are trying to slow the tide of concessions," he said. "It's a defensive battle to slow things down."

FULL COVERAGE: Building Boeing's 777X jetliner

Boeing said the contract concessions were essential to compete financially with longtime European rival Airbus, which plans to deliver the first of its more fuel-efficient twin-aisle jetliners this year. The two companies are neck and neck in the large jet market, with each looking for even the smallest of financial gains over the other.

Boeing, showing it was willing to move the program out of the Puget Sound region, opened a nationwide sweepstakes to find a potential home for the 777X production. Twenty-two states, including California, offered incentive-laden proposals amounting to billions of dollars in case the union deal didn't come through.

The outside offers — combined with the passage by Washington state legislators of the biggest corporate tax subsidy in U.S. history at $8.7 billion — put a heavy burden on the union local to agree on a deal, union leaders said.

When Boeing came to local union leaders with the offer, they flatly turned it down. But they were overruled when the union's national leadership forced a vote.

The outcome highlights the increasing inability of organized labor to confront companies whose wide geographic options translate into formidable bargaining power. At stake for the International Assn. of Machinists and Aerospace Workers were thousands of jobs and union dues in a major manufacturing state that still allows unions to hold sway— at a time when major union-sponsored work stoppages, a measure of union activism, have been in steady decline since the 1970s.

"We faced tremendous pressure from every source imaginable influencing how to vote today," said Jim Bearden, the local union's chief of staff, at a news conference after the contract was approved by just 51% of voting members. "The politicians, the media and others — who truly had no right to get into our business — were aligned against us and did their best to influence our peoples' vote."

The international machinists District 751 represents more than 31,000 of about 82,500 Boeing workers in Washington state.

"In the larger context, there were some important gains that the machinists won long term, specifically at least 8,000 machinist union jobs at Boeing and possibly as many as 20,000 jobs in the region," said Harley Shaiken, a prominent union expert and professor at UC Berkeley. "In this global context, to have the most advanced manufacturing sited in a unionized setting is an important victory — that came at a high cost."

At issue was a new contract that would convert traditional pension plans for newly hired machinists to a 401(k) type of retirement program. That drew fire from many union members who felt that acquiescing on pension plans was a line that could not be crossed.

Just one day before the vote, several hundred union members rallied at the local union hall in suburban Seattle. They waved signs urging "Vote No," "Stop the War on Workers" and "Don't Sell Your Soul!" Firefighters, Teamsters and other union members crowded into the meeting hall to show their support for the machinists.

"This is the fight of our lives," said a local union leader, Wilson Ferguson, as the crowd in the hall cheered. "This is the front line of the labor movement right now. Thank you for coming out and supporting us."

Boeing officials said the vote signified a new era of cooperation with the workers. "Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter," Ray Conner, Boeing Commercial Airplanes chief executive, said in a statement. "This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come."

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