September 12, 2008
Will the Machinists Learn This Lesson in Time?

Richard Davis, commenting on the no-end-in-sight Machinists strike against Boeing:

Job security in this environment will always be elusive. Employers cannot provide workers with guarantees they themselves do not have. Expanding global prosperity, markets and, inevitably, competition has transformed the workplace. While no one would deny the workers who generate profits an appropriate share of current earnings, it's not realistic to make long-term commitments for pension, survivor and health-care benefits. Brisk sales and high profits this year do not assure future success.

The problem is, despite that economic reality, the Machinists have made job security and related legacy costs their cause du jour .

Davis continues:

The drama has already played out in the automobile business, where the once-dominant Big Three hemorrhage red ink, shed jobs and struggle to catch up with their more nimble international competitors. Still, they stumble under the weight of the enormous legacy costs of unsustainable pension and health-care obligations. Displaced autoworkers painfully learned that paper contracts don't provide job security.

One increasingly gets the feeling that the Machinists won't figure this out until Boeing announces it will assemble the next generation of the 737 and 777 models somewhere else.

UPDATE: link fixed.

Posted by Eric Earling at September 12, 2008 08:14 PM | Email This
Comments
1. Like all things of collective ideology, the union Machinists can't figure our that their ideology harms them much more than it helps them. And the same is true of the larger philosophical malaise that is the collectivism of Democrats, Nutroots, etc.

If collectivism worked, there would be many examples of its success throughout history. But it does not work, because human nature is metaphysically of the individual. We are all our own persons. We must act accordingly for our rational self interest. The only system that can accommodate human nature is rugged individualism, capitalism, etc. A philosophy that motivates us not for the sake of our neighbor but for the sake of ourselves.

The Left will keep on trying, and keep on failing. And the smarter amongst them, will figure out that their collectivism doesn't work, and they will come and join us on the right where we know individualism, hard work, and personal responsibility are the keys to success and happiness.

If you wait for the union or the collective to grant your wishes, you might wait a long time, or forever.

Posted by: Jeff B. on September 12, 2008 09:10 PM
2. Build airplanes, not burn-barrels.

Posted by: Big Tex on September 12, 2008 09:10 PM
3. Oh, I sure hope the union doesn't drive Boeing out of the area more than it already has. We NEED Boeing. If things are so bad for the workers, then they should go work somewhere else if they think they can get more. The fact that they don't is very telling.
And no, the company indeed cannot give guarantees of jobs because Boeing itself has no guarantee that any orders beyond what they have in the pipeline will come through the door.

I heard on the radio the other day that some company in Spokane has had to lay off half their workers, due to this strike. Spokane does not need this kind of thing to be happening. It needs that productivity as much or more than than Seattle does. I was sorry to hear about the effects the strike is having on a city clear across the state.

Posted by: Michele on September 12, 2008 09:12 PM
4. My father participated in 2-3 month Boeing machinists strike in the 80s. He says this will end like all other Boeing strikes end: The Company will give the workers what they want, they'll just give it to less of them.

Posted by: Tim on September 12, 2008 09:57 PM
5. I doubt this strike will last much beyond Sept. 30. That's when the employer health insurance stops and COBRA kicks in if one wishes to stay insured. That chunk of change alone is enough to make many of the strikers reconsider. Plus, the good old days of letting obligations like utilities, car payments, and mortgages slide until the strike was over are gone.

There might be a few minor changes to the contract, but in the end it will probably be very close to what was turned down. However, I am sure the union bigwigs will spin doctor this as a "victory". I have also wondered how many of the strikers ever stop to consider that one reason the union is insisting on higher wages instead of bonuses and incentives is that higher wages means more dues money, something that might not be deducted from the bonuses (depends on the contract). Gee willikers, who is really benefiting from all this? Duh.

Posted by: Burdabee on September 12, 2008 09:59 PM
6. No they will not learn, nor will any Union, especially STATE unions, but soon they will be gone from their greed

Posted by: gs on September 12, 2008 10:14 PM
7. "One increasingly gets the feeling that the Machinists won't figure this out until Boeing announces it will assemble the next generation of the 737 and 777 models somewhere else."

No, they won't. KOMO talked to a union striker in Everett the other day. "Boeing will never move, this is the biggest building in the world." said the union man.

Posted by: MattC on September 12, 2008 11:27 PM
8. Boeing will move despite the big building, and most of all despite the big union

So what do we say about the most powerful state Union that Gregoire supports

I say I have no more to give you Gregoire, I have no More to give you....

Posted by: Gs on September 12, 2008 11:39 PM
9. Whoo Hooo! Go Alabama!!!


(Just kidding!)

Posted by: me on September 13, 2008 12:15 AM
10. It is difficult to impossible to have a competitive workforce when you have a strong Union representing them. The accountability in performance is greatly reduced when the worker is over protected by an outside entity. The worker does not have the incentive to produce at the expected and needed level of production because, his job is so protected by the Union. He has little fear of accountability if he does not do his job nor his share of the workload that he is being paid to do. Those workers who are less than honest in putting in a full days work and do as little as possible to get through the day are a drag on the other workers who do their full share. This condition hurts the morale and the profitability of the Company and allows their Competition to take a greater share of the market. Thank GOD that at this time, Boeing's major Competition is Airbus. a top heavy multi-Government involved inefficient Company. Thanks to the IAM, the economy of this State as a whole will suffer along with the Strikers as this Strike draws out over a long period of time.

Posted by: Daniel on September 13, 2008 01:21 AM
11. I'm pretty sure Dairygold is a collective. There's probably a lazy farmer or two in it's membership who doesn't deserve the money, and the price of their products are above market rates, but most consumers prefer the constistent quality over the price premium they pay for collectivism.
A UPS driver makes a bit more than the average Boeing machinist, and twice that of a DHL driver, but I don't see UPS struggling, mostly because the labor cost is offset by concentrating on efficiently using that labor.
As an analogy, suppose one wanted to make good chicken soup. One would not feed the chickens less to save money, one would use the chickens to their best advantage, and grow them in-house to maintain control over their quality.

Posted by: Joe Dolan on September 13, 2008 03:48 AM
12. The machinists union is holding on to pensions, and they don't realize that pensions are the Achiles heal of business. Sorry, but defined contribution plans like the 401(k) are the future of retirement, and they'd do well to realize it and get smart about investing for retirement.

Back when Otto Von Bismarck was running the newly-created German state, he gave everybody a pension who served in the German army at age 65. The system worked because most people were dead at age 59, so not many pensions were actually paid to army vets.

All the pension plans (including social security) adopted age 65 as the magic age when we all could start drawing benefits. It worked for many years, but medical technology and the general level of knowledge concerning one's health has led to increased life span. This essentially doomed companies with pension plans because the liability grew to unprecedented levels as life expectancy increased.

Pension plans at firms like Boeing, GM and Ford will eventually doom those companies (and any government bali-out of pensions will be kopelessly inadequate for the beneificiaries). The machinists should wake up and smell the coffee: pensions won't be there if Boeing fails and/or government has to bail out Boeing's pension plan. What are they going to do then? Live off of that great Ponzi scheme, Social Security?

Posted by: Politically Incorrect on September 13, 2008 03:49 AM
13. 12--yes; usually the union fights of today are about bitching to pay $5 for a co-pay or having to pay ANYTHING for health care; sorry, guys, you havent run a small business in Reals-ville where you're squeezed from all sides and can't always pass on every cost;

and as for the big company #'s? anything big will have big #'s; and as for exec pay? ask your stockholders why they o.k. it; or any company's stockholders; as for post-retirement bene's? you're lucky; they owe you nothing but a paycheck and reasonably safe place to work; companies are not charities by their natural charters; their mission is only 1 thing--profit; what they do more is nice, but not a corporation's pure natural mission;

Posted by: jimmie-howya-doin on September 13, 2008 06:38 AM
14. It's all about power, as IAM president "Buffaloburger" tries to shove it up Boeing's a$$.

I still recall that day in 2001 when I sent a scalding resignation letter to the IAM that was on Buffaloburger's desk (confirmed by my DC connections) that same afternoon. The IAM had crossed too far left with their member magazine and I'd had enough. When will union workers get smart and realize they would do better without greedy bums like Buffaloburger?

Posted by: Saltherring on September 13, 2008 07:08 AM
15. Demands keep growing but in the long run who loses. How many jobs have been lost over the past decade. How many small associated businesses have disappeared? Our economy is not good because of Government regulations and rules. Did not a certain city demand a bribe to allow Boeing to build a warehouse. Everyone wants a cut of the profits. Too many groups want what they claim is their fair share. As Government fees, Regulations or taxation increases on a business who pays for it. A business must make a profit. Yet everytime a business makes a profit out come the groups demanding more of its money. as though a business should not make any profit for its stock holders.
What would happen to boeing if every stock holder thought it was not worth keeping it stock. The price would drop. You want the stock holders to see profit so they keep buying or holding onto the stock.
Boeing does not exisit without investors. Yes machinists make the products but the bottom line is if investors think Boeing expenses are too high and that they will not be able to sell their planes well those investors will run away and where is your value then. Where will your jobs be?

Posted by: David Anfinrud on September 13, 2008 07:38 AM
16. #11 Dolan, farmers that belong to the Darigold Co-op are still paid like any other farmer, by the pound of milk sent in. No milk, no pay. Give cows rBST, no pay and other such standards.
About the closest thing a farmer has (had) to a co-op is of course the farm subsidies act. That's a flat out "we'll pay you for what you don't produce this year in relation to what you did last year and if you oversupply the market we'll buy it and give it away for pennies on the dollar"
Courtesy of Washington DC.

Posted by: PC on September 13, 2008 09:13 AM
17. This is how it's going to play out over the next few years. Boeing is going to forced to suck up the legacy costs. Airbus will move some of it's operations to the U.S. to hire non-union workers. Airbus will have the competitive advantage, just like Toyota, Honda, Nissan, all who have plants in the U.S. with non-union labor.

As a sidenote, it's an odd paradox that liberal minded people buy Toyota Priuses built by non-union labor. Hmmm....

Posted by: Thomas B. on September 13, 2008 10:06 AM
18. Twelve more years and those machinists will have
recouped the lost wages from their last strike
and the benefits derived from it. Pure genius.

Posted by: mark on September 13, 2008 10:08 AM
19. Everybody, listen up and try to be a little objective, okay? Let's look at some indisputable FACTS.

Let's look at some numbers first. In 2002, BA had approximately the SAME number of employees as it does today (160k). The output is much higher (double the deliveries), yet there are approximately half the number of IAM folks at BA.

Damn, those machinists are putting out TWICE as much. Deserving of TWICE the pay!

Secondly, why is employment approximately the same? As I've noted countless times, there are more managers wandering aimlessly, putting up charts for everything from toilet times, which colors should designate "happy and productive" colors (seriously!?!), putting lines around every pencil sharpener and chair (they PAY SOMEBODY for this???!!!).

Exactly the right conclusion: Management has GONE WAY WAY WAY UP in numbers.

Now, if ya'all are REALLY conservatives, you should applaud and reward the increased productivity of the SKILLED help and DECRY the CORRUPTION (continuous, ongoing, see: Sears, Michael, et al. Why exactly CAN'T BA get a straight shot at the tanker? HISTORICAL, WELL-DOCUMENTED CORRUPTION!) of management. What kind of featherbedding, increasing management by a like number of machinists actually working?

Why, why that would be UNETHICAL! Nope, no history of THAT at BA! No sir! Other than those few thousand times....

Posted by: cmiklich on September 13, 2008 10:53 AM
20. How many of the above POSTS incorrectly state that the IAM pensions are the "achilles' heel" of BA????

PAY ATTENTION!

BA puts ZERO DOLLARS (that's a "0", followed by lots more "0"s) in the IAM pension fund! It puts ZERO DOLLARS into the BA machinists' pension fund. IT IS SELF-SUPPORTING through its own interest.

Now, can anyone guess how much $$$$ BA is putting into the EXECUTIVE PENSION FUND??? That's right, HUNDREDS (and HUNDREDS) of MILLIONS of dollars! Every year!!!!! Whoa! Ya'all didn't know that didja? That's 'cause yer brainwashed!

Anybody on this board wanna do an about face? (Probably not.) Like the boondoggling executives, NONE of YOU know what it takes to actually design or build aerospace products. Can't just read a process sheet or a book and do it. It takes years of HANDS ON experience, whether an engineer or machinist. Obvious that NONE of you, especially Earling, have ever worked a real job.

Posted by: cmiklich on September 13, 2008 11:04 AM
21.
For some twisted, sick, UNAMERICAN reason, folks who call themselves "conservative", but are really totalitarians (THE OPPOSITE of conservative) want BA to send every last job to RED CHINA or other nations THAT ARE THE ENEMIES OF FREEDOM and DEMOCRACY!

What, exactly, is wrong with you people?

No country has EVER changed its form of government from other countries being NICE to it. Doesn't work. RED CHINA isn't going to be all nicey-nice to America because we send them our technology and jobs. Neither is Russia. Anybody know just how much raw material BA gets from Russia? (Hint: It's a lot!)

You want BA to get the tanker? Hell, parts of that are made in RED CHINA! How, exactly are we supposed to engage the most obvious threats in the world (Russia and RED CHINA) when parts of our MILITARY airplanes are made there? And materials for them come from there?

What is this place, Horsesass "lite"?

Posted by: cmiklich on September 13, 2008 11:09 AM
22. Pensions are a risky thing these days. Give me the cash now and let me put into the 401K. A promissory note 20 years into the future only means the company has 20 years to kill the pension plan in future contracts.
I don't see how they will be able to get any meaningful concessions out of Boeing on outsourcing, the company won't be able to compete if their hands are tied on how they adapt to the market.
That all said Boeing should not be trying to gut their benefits. Boeing should give all their Employees the exact same benefits package and try to keep it stable throughout the years. Workers shouldn't feel like they have an ever-changing deal with their Employer and have to threaten to strike every 3 years to keep what they have.

Posted by: akosted on September 13, 2008 11:24 AM
23. Too many managers is bad. But so are overpaid union workers. Neither is needed in new-economy technology companies, and we do quite well. Today's young intellectual workforce is appalled that there are people in unions who get their butts covered and with a salary that is far greater than their actual deliverable value. Just like we are appalled by bad managers. The difference is that bad or too many managers can be fired for performance or to shape the company for success.

No one wants to see a great American company like Boeing move all of its jobs to China. That would suck. But, like Detroit, bad union policy does have impact. And if those jobs are lost overseas, hey, it's tough out there in America with free will, capitalism, etc. The rest of us play by those rules every day, sink or swim, work hard or lose you job. And frankly, we don't shed a tear for an overpaid union employee with a guaranteed job, be it in government or at Boeing.

Posted by: Jeff B. on September 13, 2008 02:45 PM
24. Those that dare to state and restate that Boeing will move because of union labor, are DEAD WRONG.

After reading these documents, I want those of you that hate the IAM, It's members, want us to work for whatever crumbs Boeing tosses our way, want our kids to starve, think we are ruining the economy etc........

I want you to come back here and re-state your point and support your arguements.

Let's see if you can make a calm, well thought out, logical and intellectualy based arguement for your case.

I don't think you can. I think it's entirely likly that you will come back with 'you are a bunch of whiney greedy ingrates. I hope you are fired and your families suffer'.
**********************************************

Boeing, Boeing, Gone:
How the American planemaker clipped it's own wings.
The American Conservative
January 31, 20

http://www.jpri.org/friends/BoeingFingleton.pdf

Boeing's Diffusion of Commercial Aircraft Design and Manufacturing Technology to Japan : Surrendering the US Aircraft Industry for Foreign Financial Support

http://www.leeham.net/FileLib/March2005BoeingOutsourcing.pdf

Posted by: Graphite Epoxy on September 13, 2008 04:11 PM
25. The 787 program has shown clearly that American workers are in fact BETTER than everyone else in the world.

And not just factory workers, but engineers and managers and everyone else it takes to design and build airplanes.

The fact of the matter, as proven beyond a shadow of a doubt on the 787, is that American workers are worth more money than any workers anywhere else in the world.

The machinists are just asking to get paid what they're worth. And the SPEEA engineers will make the same claim for the same reasons.

Posted by: Mark on September 13, 2008 04:13 PM
26. I think the Union is making good points -- points of rational business sense. In the article, they point out that Boeing's outsourcing is not based on bottom line costs. A lot of it is because of arcane deals and finagling. The union says, we can do a comprehensive job.

Posted by: John Bailo on September 13, 2008 05:59 PM
27. I'm waiting for the bigmouths to read those papers and come back and try to refute them.

It also renews the debate as to whether being conservative is really consistent with free trade globalism, and lazzies fare economics (AKA anarchy).

I don't think it is, and I do think most conservatives outside pat Buchannan have been hoodwinked by Wall St into believing that free trade policies without hope of reciprocity, having America prostrate befo the WTO and an coperate and financial system free of any restraint is a good thing.

Posted by: Graphite Epoxy on September 13, 2008 06:25 PM
28. If things suck so bad at Boeing why not go to another company?

Any job is only worth what somebody will pay for it. So, to those union workers out there who are screaming that their job is worth so much more than what Boeing is paying, why not go find somebody who is willing to pay you what you think you are worth?

As former boss of mine once said when people were complaining about their work situation "I don't see an anchor on your ass. If you think it sucks here, go find something better."

Posted by: Ken on September 13, 2008 06:42 PM
29. @28:

Sure, but the union is making its case to Boeing, the upper management and the shareholders (public) that overall they can do a more efficient job.

It's the same argument that the old leveraged buyout guys made when they raided a company: get rid of inefficient management and bad decision making and let us do the job and keep more money inside the company.

Posted by: John Bailo on September 13, 2008 10:11 PM
Post a comment
Name:


Email Address:


URL:


Comments:


Remember info?