Boeing's Bad Year Is About To Get Worse

Forbes

The embattled plane maker may be heading for a damaging strike with its biggest union, which wants a rich new contract – and a bigger say in how the company is run.  Read the full story on Forbes: https://www.forbes.com/sites/jeremybogaisky/2024/08/09/boeings-bad-year-is-about-to-get-worse/#:~:text=A%20strike%20stands%20to%20worsen,of%20a%20plane%20on%20delivery.  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Boeing's bad year is about to get worse.

00:06Boeing's machinist union has been urging members

00:09to save money for a strike since 2019.

00:12Today, Monday, August 12th, the negotiations

00:16that will determine whether they need it

00:17will kick into high gear.

00:20Teams from Boeing Management

00:21and the International Association of Machinists, or IAM,

00:25the company's largest union that represents

00:27the 32,000 workers who assemble Boeing planes

00:30in Washington state, will check into a Seattle-area hotel

00:34to hammer out a new contract, the first since 2008,

00:38before the current one expires on September 12th.

00:42Many industry observers think the two sides

00:44are headed for an impasse and a strike.

00:47That would exacerbate the pile of problems

00:49Boeing is struggling with this year

00:51following a mid-air blowout of a panel

00:53on an Alaska Airlines 737 MaxJet in January

00:58that has led to increased government scrutiny

01:00of the company's manufacturing and a steep slowdown

01:03in production as Boeing tries to improve quality.

01:06A lengthy work stoppage could derail the ramp-up

01:09in plane deliveries that the company desperately needs

01:12to stop bleeding cash.

01:14It's anyone's guess how the situation will be handled

01:17by Boeing's brand new CEO, Kelly Ortberg,

01:20who reported to work just last Thursday

01:22with the tall task of repairing Boeing

01:25and its relationship with its workers,

01:27customers, the government, and the public.

01:30The machinist's leverage is high,

01:32given skilled labor shortages.

01:3435% of jobs at U.S. durable goods manufacturers

01:38were unfilled as of June,

01:40according to the U.S. Chamber of Commerce.

01:42Also high is the anger of longtime union members.

01:46Over the past decade, Boeing executives used the threat

01:49of relocating work away from the Seattle area

01:52to negotiate a series of contract extensions

01:54that held wages stagnant, took away workers' pension plans,

01:58and shifted healthcare costs to them.

02:01Last month, the members of Lodge 751

02:04of the International Association of Machinists

02:07voted 99.9% in favor of authorizing their leadership

02:11to call a strike.

02:13This happened in a raucous meeting of some 20,000 workers

02:16at baseball's Seattle Mariners Stadium.

02:19The machinists have a long list of demands

02:22that could be hard for the company to swallow,

02:24including a 40% pay raise over three years,

02:27the restoration of the pension plan,

02:29and the elimination of mandatory overtime,

02:31which the union argues would help reduce

02:33increased worker turnover that has contributed

02:36to a steep loss of experience on the assembly line.

02:40But John Holden, head of IAM 751,

02:43has laid out a much grander mission,

02:46saving America's largest aerospace company

02:49from its management's missteps.

02:51In an interview in a wood-paneled conference room

02:53at IAM 751's headquarters near an airfield

02:56in South Seattle, where Boeing hands over

02:59the 737 MAX to customers, Holden told Forbes,

03:03quote,

03:03"'The U.S. aerospace industry is at stake here.

03:06"'We're going to push this company farther

03:08"'than they thought they would go.'"

03:11That includes asking for a seat on Boeing's board,

03:14which critics have long said lacks expertise

03:16in manufacturing and has rubber-stamped management efforts

03:19to improve financial returns at the expense

03:22of the company's once-vaunted engineering excellence.

03:26The machinists are also asking for a commitment

03:28to raise the number of quality control inspectors

03:31and to guarantee that Boeing's next plane

03:33will be built in the Seattle area.

03:36In public statements, Boeing has seemed open

03:38to at least improving workers' pay and benefits.

03:42In one of his last acts before stepping down,

03:44outgoing CEO David Calhoun spoke on a conference call

03:48discussing second-quarter earnings last week.

03:51On the call, he said, quote,

03:53"'We're not afraid to treat our employees well

03:55"'in this process.

03:57"'We're just going to work as hard as we can

03:59"'not to have a strike.'"

04:02For full coverage, check out Jeremy Bogaski's piece

04:05on Forbes.com.

04:08This is Kieran Meadows from Forbes.

04:10Thanks for tuning in.

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