Boeing's Bad Year Is About To Get Worse
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.
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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.
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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.