Updated Thu, October 10, 2024
By David Shepardson
WASHINGTON (Reuters) -Boeing said late on Thursday it had filed an unfair labor practice charge with the National Labor Relations Board against the union representing its striking U.S. West Coast factory workers, accusing the leaders of not bargaining in good faith.
The charge is the latest sign of the growing acrimony and increasing frustration in the labor talks as the strike by about 33,000 union members enters its fifth week and piles financial pressure on the struggling planemaker.
Boeing said on Tuesday it had withdrawn its latest pay offer to the International Association of Machinists and Aerospace Workers after two days of talks with federal mediators, citing the union's refusal to seriously consider its proposals.
In a filing with the NLRB, Boeing also accused the union's leaders of misrepresenting the terms of Boeing's offer to its members and of not bringing negotiators to the table with authority to make a deal.
Boeing said the union had engaged in a "pattern of bad faith bargaining" and its "public narrative is misleading and making it difficult to find a solution for our employees."
The union said on Tuesday that Boeing was "hell-bent" about sticking to its "best and final" proposal of a 30% wage increase over four years that it offered last month after the strike began. The union had declined to put the proposal to its members for a vote and said this week it planned a new survey of members.
Boeing noted the union later acknowledged the planemaker had improved its offer, with IAM 751 president and lead negotiator Jon Holden telling Reuters on Wednesday that the proposed changes were "meager".
The union did not immediately respond to request for comment on Thursday. More than 90% of its members voted down an offer for a 25% pay rise last month and it has been seeking a 40% wage increase and the restoration of a defined-benefit pension it agreed to give up in 2014.
Boeing said it remained committed to reaching a compromise to end the strike, which has halted production of its best-selling 737 MAX as well as its older 767 and 777 wide-body programs.
Last month, IAM 751 filed unfair labor practice charges against Boeing. No result has been announced.
The planemaker said it had reluctantly decided to file its charge to "respond to the IAM's legal filings, and to ensure the NLRB other interested parties have an accurate picture of the events of the past few weeks."
U.S. Transportation Secretary Pete Buttigieg said earlier on Thursday it was increasingly important to see a resolution to the strike.
"The solution is going to be one that supports workers, that's compatible with the business succeeding," Buttigieg told reporters at the department's headquarters. "We think both those things are absolutely compatible, and there's a deal to be had."
Asked when the labor stoppage impact would cause concerns about the broader airplane supply chain, Buttigieg did not specify a date but said with "each passing day it becomes more important... for them to come to terms."
A letter sent on Wednesday from 30 House Democrats to Boeing CEO Kelly Ortberg and the union representing the striking workers urged the two sides to bargain in good faith to reach a fair contract in a "timely manner."
To conserve cash, Boeing put thousands of white-collar staff on rolling furloughs and said it would freeze most parts orders except for the 787, made in South Carolina. It also faces a risk of losing its investment grade credit rating.
The Boeing machinist strike is nearing the 1-month mark. Where do things stand?
Melvin Backman
Thu, October 10, 2024
Boeing workers on a picket line - Photo: Stephen Brashear (Getty Images)
The latest news: Striking Boeing workers are ‘in this for the long haul,’ union leader says
As the Boeing (BA) machinist strike threatens to drag into its fourth week with no end in sight, it remains unclear where things go from here. The company is losing hundreds of millions of dollars in badly needed cash, but that hasn’t prompted it to strike a deal.
In fact, it broke off talks with the union representing the workers, the International Association of Machinists and Aerospace Workers, telling Reuters that “further negotiations do not make sense at this point.”
An earlier labor dispute this year between the planemaker and 125 unionized firefighters gave a sense that the company was gearing up to play hardball. After more than two months of the negotiations it locked them out, an inverse of a strike where a company refuses to let its employees work until an agreement is reached.
The Associated Press reported that the firefighters ratified a contract after three weeks (and some prompting from President Joe Biden), but the machinist strike is much larger, disruptive, and has higher stakes — observers are expecting it to dent the November jobs report and weigh on national GDP figures for the rest of the year.
A pay dispute
After months of negotiations, the company reached a tentative agreement with the union in September for a contract that would see members get a 25% raise. Newly installed Boeing CEO Kelly Ortberg begged the machinists to ratify the contract and not walk off the job.
The 30,000-plus machinists had been negotiating their contract in full for the first time since 2008. The IAM seeking a 40% raise, though, so members rejected the tentative agreement and kicked off the strike — as they had promised to do in a 96%-in-favor authorization vote.
“We walk the walk and talk the talk in the Labor Movement,” the union’s negotiating committee said at the time. “We stand on business, and now it’s time to show them we aren’t going anywhere.”
Some analysts had expected that Boeing would be facing as much as $1 billion a year in extra costs if it gave the union what it wanted, but paychecks aren’t the only remuneration keeping the two sides apart. The union is also seeking the restoration of its pension, which Boeing killed in 2014 in one of the contract extensions.
Bad-faith bargaining accusations
After the first week and a half of the strike, Boeing sweetened the pot, teasing a 30% raise. There was a catch, though: The company said the bump was its “best and final” offer. The union called that a “blatant show of disrespect.” It wasn’t just because of how much the number fell short of the IAM’s ask, but also how it was communicated.
“Your Negotiating Committee did not have any discussion or input on this offer,” the union told its members. “We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready. These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.”
The “direct dealing” references to how Boeing publicized its offer, which the union said was an effort to cut it out from contract negotiations. That’s forbidden under federal labor law because it undermines the collective bargaining process.
“We first presented the offer to the union and then transparently shared the details with our employees,” is how Boeing characterized it at the time.
Since then, the company has also cut off the Boeing workers from their company healthcare plans.
Last week, just before the most recent round of negotiations was announced, Rep. Pramila Jayapal of Washington state, the senior whip in the Democratic Party House caucus and the congressperson representing the district where much of Boeing’s operations are based, pushed the company to resume bargaining.
“I hope to see Boeing and the machinists come back to the table to work in good faith to address the issues of fair wages and pensions,” she said.
A recovery on pause
In the background of the strike is the ongoing fallout — primarily stemming from a door plug blowout aboard a 737 Max 9 plane in January — which has contributed to Boeing shares falling 40% this year. The incident, which prompted a great deal of scrutiny from federal regulators, hampered the company’s efforts to come back from the last 737 Max crisis when two Max 8 planes crashed months apart in 2018 and 2019.
The Federal Aviation Administration, which has ramped up its oversight of Boeing’s operations after admitting that it had been “too hands-off,” imposed a cap on the number of 737 Max planes the company can build. Even before the machinists’ work stoppage, the company was bleeding billions of dollars at a time amid reduced deliveries.
Ahead of the strike, Boeing reportedly tried to speed up production of some models using the same stop-and-start manufacturing methods that it was trying to reduce in the wake of the door plug scandal. That’s because the models produced by the IAM-represented workers make up nearly 90% of Boeing’s commercial airliner order book.
For every day that its assembly lines are shut down, Bank of America (BAC) analyst Ron Epstein told Quartz that the company is likely losing $50 million in cash a day, money it needs. Its investment-grade credit rating is hanging on by a thread; several ratings agencies putting the planemaker on watch for a cut to junk-bond territory. Should that happen, it would make Boeing’s problems much more expensive to fix because its borrowing costs would jump.
“If the strike goes beyond a certain point — I wish I could tell you, maybe a month? — the risk increases,” Epstein said. “If you get beyond a month, things get more disruptive.”
Having initially figured that the machinists would get their 40% raise and get back to business as usual, he expressed surprise that Boeing is holding out for as long as it is.
“At a point, they have to get back in the business of building airplanes,” he said.
Melvin Backman
Thu, October 10, 2024
Boeing workers on a picket line - Photo: Stephen Brashear (Getty Images)
The latest news: Striking Boeing workers are ‘in this for the long haul,’ union leader says
As the Boeing (BA) machinist strike threatens to drag into its fourth week with no end in sight, it remains unclear where things go from here. The company is losing hundreds of millions of dollars in badly needed cash, but that hasn’t prompted it to strike a deal.
In fact, it broke off talks with the union representing the workers, the International Association of Machinists and Aerospace Workers, telling Reuters that “further negotiations do not make sense at this point.”
An earlier labor dispute this year between the planemaker and 125 unionized firefighters gave a sense that the company was gearing up to play hardball. After more than two months of the negotiations it locked them out, an inverse of a strike where a company refuses to let its employees work until an agreement is reached.
The Associated Press reported that the firefighters ratified a contract after three weeks (and some prompting from President Joe Biden), but the machinist strike is much larger, disruptive, and has higher stakes — observers are expecting it to dent the November jobs report and weigh on national GDP figures for the rest of the year.
A pay dispute
After months of negotiations, the company reached a tentative agreement with the union in September for a contract that would see members get a 25% raise. Newly installed Boeing CEO Kelly Ortberg begged the machinists to ratify the contract and not walk off the job.
The 30,000-plus machinists had been negotiating their contract in full for the first time since 2008. The IAM seeking a 40% raise, though, so members rejected the tentative agreement and kicked off the strike — as they had promised to do in a 96%-in-favor authorization vote.
“We walk the walk and talk the talk in the Labor Movement,” the union’s negotiating committee said at the time. “We stand on business, and now it’s time to show them we aren’t going anywhere.”
Some analysts had expected that Boeing would be facing as much as $1 billion a year in extra costs if it gave the union what it wanted, but paychecks aren’t the only remuneration keeping the two sides apart. The union is also seeking the restoration of its pension, which Boeing killed in 2014 in one of the contract extensions.
Bad-faith bargaining accusations
After the first week and a half of the strike, Boeing sweetened the pot, teasing a 30% raise. There was a catch, though: The company said the bump was its “best and final” offer. The union called that a “blatant show of disrespect.” It wasn’t just because of how much the number fell short of the IAM’s ask, but also how it was communicated.
“Your Negotiating Committee did not have any discussion or input on this offer,” the union told its members. “We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready. These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.”
The “direct dealing” references to how Boeing publicized its offer, which the union said was an effort to cut it out from contract negotiations. That’s forbidden under federal labor law because it undermines the collective bargaining process.
“We first presented the offer to the union and then transparently shared the details with our employees,” is how Boeing characterized it at the time.
Since then, the company has also cut off the Boeing workers from their company healthcare plans.
Last week, just before the most recent round of negotiations was announced, Rep. Pramila Jayapal of Washington state, the senior whip in the Democratic Party House caucus and the congressperson representing the district where much of Boeing’s operations are based, pushed the company to resume bargaining.
“I hope to see Boeing and the machinists come back to the table to work in good faith to address the issues of fair wages and pensions,” she said.
A recovery on pause
In the background of the strike is the ongoing fallout — primarily stemming from a door plug blowout aboard a 737 Max 9 plane in January — which has contributed to Boeing shares falling 40% this year. The incident, which prompted a great deal of scrutiny from federal regulators, hampered the company’s efforts to come back from the last 737 Max crisis when two Max 8 planes crashed months apart in 2018 and 2019.
The Federal Aviation Administration, which has ramped up its oversight of Boeing’s operations after admitting that it had been “too hands-off,” imposed a cap on the number of 737 Max planes the company can build. Even before the machinists’ work stoppage, the company was bleeding billions of dollars at a time amid reduced deliveries.
Ahead of the strike, Boeing reportedly tried to speed up production of some models using the same stop-and-start manufacturing methods that it was trying to reduce in the wake of the door plug scandal. That’s because the models produced by the IAM-represented workers make up nearly 90% of Boeing’s commercial airliner order book.
For every day that its assembly lines are shut down, Bank of America (BAC) analyst Ron Epstein told Quartz that the company is likely losing $50 million in cash a day, money it needs. Its investment-grade credit rating is hanging on by a thread; several ratings agencies putting the planemaker on watch for a cut to junk-bond territory. Should that happen, it would make Boeing’s problems much more expensive to fix because its borrowing costs would jump.
“If the strike goes beyond a certain point — I wish I could tell you, maybe a month? — the risk increases,” Epstein said. “If you get beyond a month, things get more disruptive.”
Having initially figured that the machinists would get their 40% raise and get back to business as usual, he expressed surprise that Boeing is holding out for as long as it is.
“At a point, they have to get back in the business of building airplanes,” he said.
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