Boeing talks on ominous course

Boeing Co. officials suggest they’ll move work out of the Puget Sound region if costs escalate, but the company’s engineers and technical workers likely will have voted down a contract offer when ballots are counted Monday.

Rhetoric between Boeing and the Society of Professional Engineering Employees in Aerospace, or SPEEA, has onlookers drawing parallels to previous, disastrous contract negotiations with Boeing unions in 2008 and 2000.

The vote takes place as union and Boeing officials trade thinly veiled threats. SPEEA has fanned speculation of a work slowdown or a strike. Meanwhile, Mike Delaney, vice president of engineering for Boeing Commercial Airplanes, has reiterated that the company will move engineering work to other sites within Boeing if it can’t keep a lid on costs here — starting with a competitive deal with SPEEA.

“Slowly over time, if you become uncompetitive, you have to deal with the arbitrage and leverage other resources,” Delaney told the Seattle Times editorial board last week. Delaney noted that 30 percent of the work in his “unit” — it’s not clear what he was referring to — is done outside of metro Puget Sound, though still within Boeing.

Boeing declined to make Delaney available to elaborate. Company spokesman Doug Alder said last week that the company won’t clarify or comment further on Delaney’s remarks.

Comments made by Boeing officials in 2008 about moving work from Washington because of strikes landed the company in a federal labor court. The National Labor Relations Board alleged the company illegally retaliated against the local district of the International Association of Machinists and Aerospace Workers when Boeing built a 787 factory in South Carolina to supplement an assembly line in Everett.

Boeing denied wrongdoing in the lawsuit and later agreed to keep future 737 MAX assembly in Renton when the Machinists agreed to drop the labor complaint and ratify a new contract.

So, naturally, Delaney’s comments in 2012 about placing engineering and technical work elsewhere if payroll costs can’t be kept in check has drawn the ire of union officials.

The parallels with 2008 do beg a question: Is Boeing breaking labor law by saying it will shift work out of the Puget Sound region if costs rise too much? There is no simple answer.

“A company can always act for legitimate economic reasons,” Nancy Cleeland, a spokeswoman for the NLRB, wrote in an email, having consulted an NLRB attorney. “What it can’t do is threaten employees or retaliate against them for exercising their labor law rights. The line between those two things can be blurry.”

In September, local analyst Scott Hamilton of Leeham Co. in Issaquah suggested that Boeing’s corporate managers in Chicago are misreading SPEEA, just as they misread the local district of the Machinists in 2008. The union struck for 57 days that year, halting plane deliveries.

As in 2008, Boeing has more work on the horizon. Not only is Boeing increasing production, but the jet maker has development work ahead, including the 737 MAX, 787-10, 777X and 767-based Air Force tanker. SPEEA’s 22,765 engineers and technical workers design new aircraft and test and approve deliveries of existing models.

Analyst Hamilton noted on his blog Friday that Boeing could go to its board of directors “within days” to request the OK to offer the 787-10 to customers. Developing the new, larger version of the Dreamliner would require engineering expertise — either in the Puget Sound region or elsewhere.

Boeing outsourced a significant amount of engineering on the 787-8 program, a move that led to significant and costly delays. The company brought back within the company more of the engineering work on the 787-9, pledging to keep critical technologies in-house.

Hamilton wrote that Boeing management is “counting” on SPEEA not to strike, the union having done so only twice in its 68-year history. Especially in a tough economy.

SPEEA members are not voting Monday on whether to strike. Members are being asked only whether they accept or reject Boeing’s contract offer.

Under SPEEA guidelines, members would vote separately on whether to give negotiators the authority to call a strike. Negotiators could then do so at any time. But that doesn’t mean SPEEA leaders would actually call one.

While SPEEA bylaws require two weeks for members to review a contract, that wouldn’t necessarily be the case for a strike vote. If talks were at an impasse and SPEEA negotiators didn’t have strike authority, they could hold an all-member meeting and ask for the OK to call a strike, said Bill Dugovich, SPEEA communications director.

The only time SPEEA staged a major strike was in 2000. It lasted 40 days. The union had a one-day strike in 1993.

However, a concerted work slowdown could be worse for Boeing in some ways than a strike, Dugovich said. Boeing would continue to pay SPEEA members but would have far less to show for their work.

Shortly after Boeing made its offer, reports started cropping up that SPEEA members were slowing down their work pace by implementing a tactic known as work-to-rule. Under the tactic, union members perform their duties as policies specify, not using more efficient methods. They frequently also work only the amount of time required, not voluntary overtime.

The contract voting ends just days before SPEEA’s current contract expires on Oct. 6. The union and company could extend the existing contract should SPEEA members vote down Boeing’s proposal, as union leaders recommend.

In the week leading up to Monday’s vote, Boeing and SPEEA exchanged barbs through messages to members and online, often accusing one another of misrepresenting details of the contract.

SPEEA negotiators say Boeing’s offer includes the worst pay raise the company has offered in 37 years. They believe a 401(k) plan that would be offered to new members is inferior to the defined pension enjoyed by existing ones. The union also claims Boeing is looking to do away with health care for SPEEA retirees.

For its part, Boeing faces rising medical and pension costs and increased competition. Company officials accuse SPEEA of cutting off negotiations early, but assert their offer includes “both market-leading retirement and medical benefits, and competitive wage increases all four years of the contract.”

Most engineers and technical workers mail in their ballots. Member participation in the last three contract votes — 2002, 2005 and 2008 — ranged from 65 percent to 77 percent.

The union will begin counting votes after the 5 p.m. deadline Monday, with results posted Monday evening on its website.

Check on Monday for updates on the SPEEA vote.

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