All these events, of course, have generated big headlines, here in The Herald and everywhere else people turn for information about Boeing and the aerospace industry.
But when the historians, years in the future, write this chapter on the major events of 2011, I believe they'll focus on something else that happened this year that got overshadowed by the headlines and ignored by the TV talking heads: Boeing and the Machinists Union have agreed to a common set of goals, and a new framework for achieving them, and we've committed to working toward the mutual success of both labor and management.
All this was part of the four-year contract extension that our Machinists Union members voted to ratify earlier this month. As we all know, Boeing's commitment to building the 737 MAX here in Puget Sound grabbed all the headlines, but it was the pledge to work together that I feel will bring the longest-lasting benefits.
We all know the story of how we got here, of how relations between Boeing and its union workers have deteriorated over the past decade or more. We've gotten good -- very good -- at fighting each other.
But even as we engaged in very public arguments, Boeing and the Machinists Union have continued to find ways to work together, quietly but effectively, to win new business and to improve on old processes. There is no better example of this than the fact that for nearly a decade, Boeing and the Machinists fought side-by-side to ensure that America's military would get an American-made refueling tanker.
Working together -- Machinists, engineers and managers -- we were able to find ways to reduce costs and improve productivity, and that's what allowed Boeing to submit the winning bid for the Air Force's KC-46 tanker, which means we'll be building 767s here in Everett for years to come.
Think of what that meant: Instead of fighting our unions in hopes of squeezing 1 or 2 percent cost savings through drastic wage and benefit cuts, Boeing management worked with us to improve processes and efficiencies, and together we were able to slice more than 20 percent off the asking price. And because of that, Boeing won a huge order.
This will be the example for how Boeing and the Machinists will work together in the future, for the benefit of everyone.
I say "everyone" because the contract extension is good news for Washington state, and especially for Everett.
The agreement secures the jobs of thousands of men and women across the region, by ensuring that they'll get to continue doing the work they do on current-model 737s on the next version. This includes all the people working on 737 parts in the Everett Wire and Interiors shops, as well as scores of Snohomish County suppliers who provide parts and services for the 737 program.
These are jobs with above-average wages and good benefits. This means that aerospace workers will have money to buy cars and houses and computers, to take their families to the movies or out to dinner. In short, they'll have money to support all the other businesses in Snohomish County.
The significance of this agreement to work toward the mutual success of both labor and management goes beyond Boeing and Puget Sound, however.
For the past generation, the thinking in American business has been dominated by the notion that success is a zero-sum game. By that, I mean that Wall Street and its political allies decided that there was only so much money to go around, and the only way that they could increase their share was to take it away from workers, by crushing the unions here at home and outsourcing as much work as possible to overseas nations desperate for jobs and business investment. Labor has responded with a desperate fight to hold on to what is left of America's shrinking middle class.
After 30 years of this, we now see the result: This month, the Census Bureau reported that nearly half of all Americans are living in poverty, or are just one missed paycheck or emergency room visit away from it. In the meantime, U.S. corporations are sitting on record piles of cash that they're afraid to invest in America, because with poverty at an all-time high, no one here can afford to buy their products.
With this contract extension, Boeing is choosing another path. It is committing to the Machinists Union that one of its top goals is to sustain and grow good-paying jobs with benefits: health care that means a sudden illness won't bankrupt a family, pensions that will allow our seniors to contribute to our communities in their retirement.
And it has been rewarded for it. Since we announced our tentative deal with Boeing, shares of the company's stock have jumped up by as much as $3 a share, which means the company's valuation jumped by more than $2 billion. Boeing customers have responded to the news by ordering more than 250 planes with a list price of close to $30 billion. And these amazing financial gains have come even though the company has committed to keeping work in the United States, has given its workers pay raises and agreed to keep providing pensions -- which is the opposite of what the Wall Street types have been urging companies to do.
At the same time, our union has agreed to a new road map, using our skills, experience and knowledge to help Boeing lower costs and raise productivity, so that together we can better fight our competitors in Europe, Asia and South America. We'll be meeting every month to look for new opportunities and to resolve issues before they become problems.
We also have been rewarded for our actions, with stronger written commitments than we've ever had to ensure a new generation of workers will find jobs at Boeing.
Boeing and the Machinists Union have jointly pledged to work closely together to achieve these goals, and to meet other objectives that are central to the mutual success of both the company and its people.
To me, that could be the greatest legacy of our contract extension with the Boeing Co., and the most important achievement of 2011, a year that has seen more than its share of groundbreaking successes.
About the author
Tom Wroblewski is president and directing business representative of Machinists Union District Lodge 751. District 751 represents more than 31,000 working men and women across Washington, Oregon and California, including nearly 29,000 employees of the Boeing Co.
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