The Boeing Co. and its Machinists union have called off a brief second round of contract talks that could have ended a labor strike.
“We worked very hard to find solutions, and we are extremely disappointed that the talks broke off,” said Doug Kight, Boeing’s lead negotiator, in a press statement on Monday.
Boeing and its Machinists returned to the negotiating table over the weekend with the aid of a federal mediator. Although the union notes concern over wages, health care and pensions, its major point of contention with Boeing revolves around outsourcing. The Machinists said Monday that Boeing wants to eliminate 2,000 union jobs and replace those positions with outside workers.
“It is a systematic attack on the employees who have generated unprecedented success for Boeing,” said Tom Wroblewski, the Machinists’ district president. “If Boeing succeeds in their plan, it is our members’ concern this will expand to other jobs in the factory.”
About 27,000 Machinists in Washington, Oregon and Kansas went on strike Sept. 6. No further negotiations are scheduled. Boeing is set to begin contract talks with the Society of Professional Engineering Employees in Aerospace later this month. SPEEA has expressed concerns with Boeing similar to those of the Machinists.
The Machinists’ Wroblewski said Boeing is trying to “bargain away” about 2,000 long-standing union jobs — mainly materials handlers and inventory distributors. Boeing already depends on outside vendors to perform such jobs for its 787 Dreamliner. But Machinists continue to do those jobs on Boeing’s other jet lines here in Everett — its 747, 767 and 777.
Last week, Boeing officials stressed the company’s need to be able to outsource in order to remain competitive. Boeing’s chief executive, Jim McNerney, told employees that the aerospace giant won’t allow itself to be “fatally wounded” like U.S. auto companies, which promised their unions “unsustainable wage and benefit levels” and job guarantees. The company had offered the Machinists an 11 percent wage hike over three years and a minimum of $5,000 in bonuses in the first year of the contract, though the Machinists say those gains were offset by takeaways in health care.
“The ongoing turmoil in the financial markets provides a timely reminder of why it would be gravely unwise for Boeing to agree to terms in any contract that would fundamentally restrict our ability to manage our business,” McNerney wrote in his memo to Boeing workers.
The Machinists have said they understand Boeing’s need to place some work in other countries in order to encourage new orders from global airlines. But the union wants the ability to bid on work traditionally performed by Machinists that Boeing decides to outsource.
Boeing officials, like negotiator Kight, maintain that job guarantees reduce Boeing’s flexibility and ultimately its competitiveness.
“We want to resolve this strike so employees can return to work, but we cannot sacrifice our ability to continuously improve productivity and our long-term competitiveness for an agreement,” Kight said.
The past two years, Boeing has won the battle for jet orders over its lead rival Airbus, due in large part to its new, mostly composite 787 Dreamliner. Boeing had fallen more than 15 months behind schedule on its fast-selling 787 Dreamliner jet before the strike began. The company suffered supplier and production setbacks on the heavily outsourced 787, which was due to make its maiden flight later this year.
The Machinists’ Wroblewski said union members have made continuous improvements in productivity and have fixed vendor mistakes.
“The fact is our members have bent over backwards for this company to make them profitable. … It is our members who consistently step up and get the job done for Boeing. We will continue to do that, but not at the price of our jobs,” Wroblewski said.
Boeing’s stock got a bounce with the rest of Wall Street on Monday, rising $5.28 to close at $47.08. The aerospace company’s shares have declined roughly $50 from last year. Boeing has a backlog of roughly 3,700 unfilled orders for commercial jets. It shut down assembly on those aircraft when the Machinists walked off the job last month.
Michelle Dunlop writes for the Herald of Everett.