Boeing’s message vs. big profits

While Boeing Co. leaders have said workers need to make concessions for the company to stay competitive, it has posted huge profits in recent years.

“Here they’re making record profits and doing millions in stock buybacks, and Boeing is crying poor house,” said Scott Hamilton. “There’s a real disconnect.”

Hamilton is sort of our hometown aerospace analyst, based in Issaquah. He is the voice of Leeham News and Comment, and he planned to be at the Machinists District 751 headquarters in Seattle tonight to await the results of the union’s vote on a proposed contract extension. If accepted, the revised contract would bring major changes in benefits for the men and women who build jetliners in Everett and Renton.

Hamilton said that while times might be good now, Boeing does have to keep an eye on controlling costs in the next decade as competition increases from China and Russia as well as Airbus.

A no vote by members of the International Association of Machinists and Aerospace Workers (IAM) doesn’t mean the 777X wouldn’t be built here, Hamilton said.

“Boeing is going to put this out to bid, and that’s not to say that Washington isn’t going to be one of the bidders.” It could even be a top bidder, given its highly trained workforce and developed infrastructure. But right now, Boeing is offering a sure thing, albeit at a high price for workers, he said.

Union members “thought the threat to put one of the 787 sites outside Puget Sound was a bluff,” Hamilton said. The outcome was a second 787 assembly line in North Charleston, S.C.

That gamble hasn’t been without problems. A year after it opened, Boeing’s factory there is struggling to produce one plane per month, well below the company’s initial expectation of three per month, Hamilton said.

While “Everett is clearly the best choice” for 777X work, Hamilton said, the problems in South Carolina will be worked out “given enough time.”

As for other Boeing cities:

  • Long Beach, Calif., where Boeing has built the C-17 transport for the world’s air forces, has a workforce with necessary technical skills but no experience with the 777.
  • Huntsville, Ala., and San Antonio, Texas, lack the experience and training of Everett and Long Beach.

More in Herald Business Journal

Health-care consumers need to take the lead, so get smart

David Russian, CEO of Western Washington Medical Group, writes our third essay about fixing health care.

Robots on Wall Street: Slow-footed regulators lose ground

Watchdogs have to figure out how to check computers running lightening-fast algorithms.

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Molina Medical holds fall carnival for families in Everett

Molina Medical is hosting a free event for families in the Everett… Continue reading

Leadership Snohomish County celebrates 20 years of service

Leadership Snohomish County is celebrating its 20th anniversary. The organization was launched… Continue reading

Snohomish, Monroe manufacturers honored for innovation, excellence

Two Snohomish County companies have been honored with Manufacturing Excellence awards at… Continue reading

Remodeled home tours planned this weekend

This weekend, Edmonds-based Chermak Construction will participate in the 2017 Remodeled Homes… Continue reading

Barron Heating to celebrate anniversary at Marysville showroom

Barron Heating and Air Conditioning is celebrating its 45th anniversary from 10… Continue reading

US budget deficit hits $666B, an $80B spike for the year

The deficit issue has largely fallen in prominence in Washington in recent years.

Most Read