The folks on the Boeing side are telling me they’re going to release more details of their latest health care offer to the Machinists tonight — hopefully in time for us to get something into Monday’s paper — so while I wait for the call, let’s look at some other reporting on this.
Stan Holmes at BizWeek http://www.businessweek.com/bwdaily/dnflash/aug2005/nf20050829_1114_db002.htm has been talking with someone on the IAM side of the bargaining table, and working with his calculator.
Key Quote: “Boeing can afford to pay its employees a higher pension, according to its own financial and pension documents. … Increasing the pension benefit by $10 would cost an additional 56 cents per hour worked, or roughly $24 million annually. When Boeing hired new Chairman and CEO James McNerney in July, the board showered him with a $22 million supplemental pension. While that’s a one-time expense, it’s hard to argue that Boeing can’t find an additional $24 million for 18,300 workers who will have put in 20 to 30 years apiece at Boeing when they retire. The difference is that the additional $31 million would be an annual expense essentially forever… it’s easy to see why Boeing execs are loath to add any additional long-term liabilities. Such an expense can be a real drag on earnings …”
OK, that’s a long quote, but it makes the arguments for both sides nicely, I’m thinking:
A) Boeing can afford to raise pensions now, but
B) Boeing is afraid if it raises those pensions now, it’s going to saddle itself with a big costs for decades to come.
Which is just about what Teal Group analyst Richard Aboulafia told me Saturday, while I was interviewing him for this story http://heraldnet.com/stories/05/08/28/100loc_union001.cfm that appeared in today’s paper.
Key Quote: “It would be tough for Boeing to weather a strike right now, Aboulafia said. Airlines, particularly in Asia, are rebounding, and Boeing is locked in a market-share battle with Airbus to supply jets to the new low-cost carriers springing up. … However, in the long term, if Boeing is forced to pay more than it wants for labor, that only increases the likelihood of its outsourcing more work, Aboulafia said.”
That story prompted a chastizing e-mail from a Machinist who is Not A Friend-of-Blog: “We work everyday with Boeing management, you don’t, Aboulafia doesn’t. Why don’t you write an article about ‘Top hat pensions’ and explain to the rest of the public how corporate management takes care of itself.”
In case you missed it (like this guy) here’s my Aug. 17 column on IAM’s position on pensions. http://www.heraldnet.com/stories/05/08/17/100bus_corliss001.cfm
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