AIN Blog: Boeing, IAM Finally Learn To Play Nice
You’ve got to hand it to Boeing. After only a month and a half of negotiations with its machinists union, it reached a deal that not only appeared fair to its workers, but also relieved the company of a potentially lengthy and costly litigation related to its effort to head off any further labor disruptions by building a new 787 plant in North Charleston, S.C.
The relatively quick and apparently smooth road to labor peace might lead one to wonder why Boeing historically had experienced such trouble reaching agreements with the International Association of Machinists and Aerospace Workers (IAM) in the past. In fact, no fewer than four strikes since 1989 have cost Boeing billions of dollars in revenues and less tangible currency with customers. The latest—in the autumn of 2008—contributed to the delays of the 787 Dreamliner and, at least in part, prompted Boeing to build a new factory in a so-called right-to-work state to mitigate some of the risk of future strikes.
This time, however the stakes might well have proved higher than anyone outside the Boeing boardroom really knows. One theory holds that the National Labor Relations Board’s complaint actually carried more legal merit than anyone at Boeing cared to admit, and the company knew it, notwithstanding the bluster from the right wing of the U.S. Congress over what it characterized as un-American efforts to circumvent the U.S. constitution by appointees of President Barack Obama.
Of course, Boeing might simply have deemed whatever defense it would have to muster against the NLRB not worth the time, cost and effort, even if it believed it would win the case.
Whatever the reason, the efforts of the proverbial adults in the room this time held sway, even while Republican congressmen continued their calls for legislation to defund and essentially dismantle the NLRB.
In the end, Boeing’s machinists came away with a guarantee that the company would build the 737 MAX—the planned re-engined version of the 737NG—at the traditional home of Boeing narrowbody production in Renton, Wash., along with a 2-percent wage increase for the life of the four-year contract, a $5,000 signing bonus and a productivity incentive plan that could amount to bonuses equal to 4 percent of gross pay.
For Boeing, the NLRB fight will simply end, sparing it potential embarrassment in court and, in the worst case, the closure of its plant in North Charleston, where it plans to build at least three Dreamliners a month by the end of 2013.
For a change, everyone seems happy—no thanks to the politicians in Washington, whose efforts to effectively castrate the NLRB likely will fizzle. Indeed, the entire affair showed once again that bully tactics rarely serve the long-term interests of anyone, a fact thankfully recognized by Boeing and the IAM when they for once settled their differences amicably.