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Wichita workers must reapply for jobs at new company Mass layoffs at Boeing By Lee Sustar | March 25, 2005 | Page 11
ANOTHER CRISIS looms for the International Association of Machinists (IAM) after Boeing Co. laid off the entire 5,200 hourly workforce at its Wichita, Kan., commercial airline plant, pending sale of the facility to Onex Corp.
The IAM--already reeling from job losses and wage cuts imposed by bankruptcy judges in the airline industry--now faces demands for massive concessions from Onex, a big Canadian investment company that controls a series of companies ranging from auto parts makers and health care providers to movie cinemas. Boeing announced the layoffs March 12 after IAM Local Lodge 834 officials rejected Onex's demands for givebacks, although local president Steve Rooney so far has refused to provide details to union members.
Along with Boeing's "big stick" is a carrot dangled by Onex--new investments that would double the Wichita plant's workforce in order to build regional jets for Canada's Bombardier company. A smaller Boeing plant in Oklahoma is also part of the deal. But to get the new jobs, the union will be expected to make big concessions--most likely lower wage rates for new hires and changes in work rules that would greatly reduce union power.
The Wichita complex has already lost 5,000 jobs in recent years due to a decline in orders and outsourcing. In its last contract, negotiated in 2002, the union also made big givebacks in health care coverage. Giving concessions to Onex now will only accelerate Boeing's demands for similar givebacks at its remaining commercial airline plants when the IAM's contract expires in September.
A majority of IAM members in the commercial airline group voted against the last contract in 2002, but didn't reach the required two-thirds majority needed to reject the deal and strike. The campaign against that contract was disorganized by the IAM leadership, which urged a "no" vote, but suspended the balloting on a first contract vote and then parroted Boeing management's scare talk about a long strike.
Since then, Boeing management has continued to grind down the IAM membership by eliminating jobs through outsourcing. The total numbers employed in Boeing's commercial airline division is about 35,000 less than before the September 11 attacks, which management used to push through massive job cuts. At Boeing's main airline production facilities in the Puget Sound region, IAM District 751 suffered layoffs of 8,791 workers since then, leading to a total of 13,000 laid-off workers on the recall list.
Boeing has started to slowly rehire workers over the past year--but management has made it clear that most jobs are gone forever. And with a high-stakes trade dispute with Europe's Airbus over airline subsidies, Boeing management--which recently ousted its second CEO in two years--can be expected to take a hard line.
By selling off part of the commercial airline group to Onex, Boeing aims to focus on final assembly of the aircraft, following the example of the Big Three auto companies that have sold off their parts-making plants as separate companies. And like the auto companies, Boeing seeks to use outsourcing to lower costs by pressuring outside suppliers--including those in Japan and China--to keep labor costs low.
The Boeing job cuts have accelerated the decline in the IAM's active membership, which is down to 380,000, compared to nearly 1 million in 1980. The pressure on the IAM will be especially strong in Wichita, where "right-to-work" laws allow workers to remain nonunion even though they're covered by collective bargaining agreements.
What happens next in the Onex-IAM negotiations will have far-reaching implications not only for the IAM in Wichita, but also for manufacturing unions across the U.S. So far the unions' response in the auto and steel industries has been to try to slow job shrinkage by making concessionary deals in order to make new owners profitable--an approach that the IAM seems set to follow.
Local 834 leaders, for example, have already ruled out a strike, warning members that the Boeing-Onex deal--and its promised new jobs--would disappear if workers reject a future contract. Such a strategy will only ensure further decline for the IAM--unless the rank and file takes the initiative and fights for a decent contract.
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