McNerney: Strikes hurt Boeing’s standing

Published 10:56 pm Monday, October 6, 2008

EVERETT — The Machinists’ strike has hurt the Boeing Co.’s reputation and threatens the nation’s aerospace industry with a fate similar to that of automakers in Detroit, the company’s chief executive said Monday.

“While we’ve disappointed customers for other reasons in recent years, too, we believe this track record of repeated union work stoppages is earning us a reputation as an unreliable supplier to our customers, who ultimately provide job security by buying our airplanes,” wrote Boeing’s Jim McNerney, in a memo to employees.

McNerney told employees that the company wants the Machinists’ strike to end but remained firm that Boeing needs to be able to outsource to be competitive in the market. Job security has been at the top of the union’s list of demands in trying to negotiate a three-year labor deal with Boeing. No new contract talks have been scheduled 31 days into the strike.

McNerney noted that Machinists’ leaders have recommended strikes four times, shutting down Boeing’s commercial aircraft assembly plants three times in the past 13 years. About 27,000 Machinists — most in the Puget Sound region — closed Boeing’s commercial jet factories by walking off the job Sept. 6. Union leaders urged members to reject Boeing’s contract, saying Boeing’s offer fell short in the areas of job security, wages, health care and pension.

“The IAM is not on strike to harm Boeing or its customers,” said Mark Blondin, Machinists’ aerospace coordinator. “However, we are on strike and our members have made it clear that protection of IAM jobs and the scope of IAM work is critical to getting a ratified agreement.”

Some of the “other reasons” noted by McNerney for delivery delays are the result of outsourcing, especially pre-strike foul-ups by subcontractors who have postponed testing and production of the new 787 jetliner. Boeing is already 15 months behind schedule on the 787.

The Machinists’ Blondin acknowledged that some outsourcing is “necessary for sales” but said the union seeks guarantees for positions that historically have been performed by the Machinists.

But “we also know that there is a vast amount of outsourced work … that could been done more efficiently and less costly in house by the IAM,” Blondin said.

Besides increasingly tight competition from Airbus, “other nations — including Russia, Japan, Canada and Brazil — either already produce or are developing the capability to produce airliners that approach the size of Boeing’s smallest and best-selling 737,” McNerney noted.

Airbus’ parent company, EADS partnered with Northrop Grumman to compete against Boeing for an U.S. Air Force tanker contract, proposing to build tankers in Alabama. That would allow Airbus “to establish a beachhead for producing commercial airplanes in the United States — and in a very low-cost location, too,” McNerney wrote.

Boeing stock plunged to a four-year low of $47.92 Monday in the widespread market sell-off before closing at $51.29.

The Associated Press contributed to this story.