Did strikers win at Boeing?

October 31, 2008

Darrin Hoop reports on the tentative agreement at Boeing that IAM members will now vote on.

AFTER 52 days on strike, the International Association of Machinists and Aerospace Workers (IAM) reached a tentative agreement with Boeing on October 29.

In many ways, this deal is a victory. It stopped Boeing's demands for health care concessions and retained the same benefits achieved in the last contract. It offers general wage increases of 15 percent over the life of a four-year contract (5 percent the first year, 3 percent in the second and third years, and 5 percent in the final year).

According to the IAM's official statement, the pension increase--$11 for the first three years and an additional $2 in the final year--is the largest dollar increase for pensions in union history. If the contract is approved, the pension agreement would lead the aerospace industry.

And in the single biggest issue for the machinists, the contract also limits outsourcing. The IAM says that it recaptured the scope of work that was lost in the 2002 contract. It says there is job protection for over 5,000 members in the parts delivery and facilities maintenance work. Boeing's previous proposal could have led to at least 2,000 job losses.

Some 2,000 Boeing workers and their supporters rallied in the pouring rain for a decent contract

While Boeing wanted non-union vendors to have the right to deliver parts right up to the planes, now they will only be able to deliver parts inside the factory. From there, IAM members will track their use, disbursement and do inventory on them, as they do now. The union also would gain the right to bid for work being outsourced to non-union Boeing facilities.

IAM District 751 President Tom Wroblewski, declared victory in a statement posted on the union's Web site:

After 52 days of striking, we have gained important and substantial improvements over the company's last, best and final offer that was rejected on September 3...Boeing is profitable because of our members' hard work, and by standing together, our members ensured they receive a bigger share of those profits.

There's no question that in this climate of a worsening economy and unions suffering from more than three decades of attacks by Corporate America, this tentative agreement is a step forward for labor.

For IAM members on the picket line in Washington, Oregon and Kansas, the strike shows the tremendous power this section of the industrial working class still possesses. They brought one of the world's most powerful--and richest--corporations to its knees.

What you can do

Voting on the contract will take place in conjunction with regular weekly strike check distribution. It will be from 8 a.m. to 6 p.m. on November 1 at the following locations: Green River Community College (12401 SE 320th St., Auburn), 751 Seattle Union Hall (9135 15th Pl. S, Seattle) and Evergreen Fairgrounds (14405 179th Ave. SE, Monroe).

You can download a "Vote No" flyer for distribution at Don Grinde's 751 Rank-and-File Voices Web site.

This is the IAM's seventh strike at Boeing, and now the third longest in company's history. The strike so far has cost Boeing 38 percent of its third-quarter profits. It led to a net loss for Boeing of more than $1.3 billion in the first month of the strike alone. It shut down the largest exporter in the U.S. and the Pentagon's number two military supplier.

Furthermore, compared to the last two IAM contracts, in 2002 and 2005, that opened the door for massive outsourcing at Boeing, this contract appears to stop the bleeding.

BUT DOES this proposal give the machinists their fair share of Boeing's massive profits?

The numbers don't lie. Boeing has had record profits of $13 billion since 2002. It has a record eight-year backlog of more than 3,400 plane orders worth $349 billion, according to MarketWatch. In July, an article reported that Boeing sees a market for 29,400 new commercial airplanes worth $3.2 trillion over the next 20 years.

And after the tentative contract settlement was reached, Boeing management announced that it believes China will buy 3,710 new planes by 2028--orders worth $390 billion.

In addition, top Boeing executives who "earn" $3 million a year receive an annual pension of more than $1.4 million, or $120,000 a month--more than 50 times what machinists will get with this offer.

Given the current record profits and the prospects, despite the worsening economy, of enormous future profits, could the union win more by voting the contract down and continuing the strike?

A closer look at some of the gains shows their limitations. The wage increases are the same as Boeing's previous proposal. Boeing was offering 11 percent over a three-year contract. The only difference is that Boeing added a 4 percent increase in the fourth year.

While the pension increase may be the largest dollar amount in IAM history, the $81 offer for the first three years of the contract is only $1 more than Boeing's last offer of $80 back on September 6, when the strike started. It comes out to a 16 percent increase, the same pension improvement that the union won in the 2005 contract, when Boeing's profits were much smaller than they are today.

There is an extra $2 pension bump in the fourth year of the contract, bringing pension improvements to just under a 19 percent increase over four years. Yet that fourth-year increase is significantly less than the gain machinists would most likely get in the first year of the next contract, if they were to accept a three-year contract this time.

The union did hold the line on health care. But given Boeing's record profits, the union has the potential to increase health care benefits to make up for concessions agreed to in past contracts.

In addition, the proposal doesn't pay the 40-cent cost-of-living adjustment (COLA) for May, June, and July that Boeing refused to pay before the contract expired. And there are no increases to the overall COLA formula, despite the dramatic rise in inflation this year.

Nor will this contract stop the outsourcing of work for the future of Boeing's commercial airline business, the 787.

According to the IAM, since it gave up jurisdiction over the 787 final assembly in past contracts, it had no right to reclaim that work in this contract. As a result, New Breed Logistics, which has its own distribution facility just down the road from Boeing's Everett plant, will still be able to have its nonunion workers deliver parts directly to the 787.

MANY MACHINISTS, while proud of the work the IAM leadership has done overall, still feel they could win even more if the membership voted this contract and continued the strike.

Don Grinde, a 31-year crane operator and veteran union activist who runs a rank-and-file blog, speaks for many machinists who are voting no on the contract.

"I'm voting no because Boeing is making record profits," he said. "[Boeing] has a record backlog, and in this economic climate, given all the above, I can't stomach a yes vote."

Judging by the traffic on Grinde's blog, many machinists are listening. Since the beginning of the strike, thousands of people have visited Grinde's site. As Grinde put it on his blog:

This strike is about decades of concessions in our contracts and the erosion of 20,000 IAM jobs outsourced. Boeing blamed the machinists from day one for production delays, when, in fact, management-sponsored outsourcing crushed the launch of the 787. Parts shortages delayed deliveries and profits totaling hundreds of millions of dollars. The machinists fell on the knife for Boeing. Sisters and brothers, we have earned our fair share of a reasonable contract based on the profit we have, and will make, for Boeing.

Grinde and other machinists are campaigning for a "no" vote on Saturday, November 1, when the union will be holding the contract vote at three different locations in the Seattle area.

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