Observations on labor, Boeing

As we prepare to head off to the Paris Air Show, there have been a couple of important developments on the labor front with Boeing.

First, what we consider to be good news.

SPEEA, the engineers union representing Boeing workers primarily in Puget Sound but at a few Boeing facilities elsewhere, proposes entering binding arbitration on wages when contract negotiations begin next year. The contract is amendable at the end of 2012.

Boeing’s reaction is measured but encouraging:

“We are encouraged by this proposal and SPEEA’s offer for a dramatically changed way to negotiate a labor contract. We’ll need some time to review this proposal and engage in some serious internal discussions about it.

“We are in the process of setting up meetings with key SPEEA leaders to further discuss this concept.”

Now for the not-so-good news.

.

As entirely expected, the first day of the NLRB hearing on the IAM complaint that Boeing established 787 Line 2 in Charleston in retaliation for the 2008 strike was just procedural and didn’t go anywhere. The judge’s suggestion that the two sides settle their differences also went nowhere.

.

We’ve already expressed our view that the NLRB general counsel recommendations, and the IAM demands, are non-starters. Some other agreement is necessary to settle this matter, though we have no clue what might be acceptable to both sides.

.

Perhaps the IAM and Boeing should follow SPEEA’s lead and go with an arbitrator. We view settling this before the IAM contract negotiations begin next year to be imperative. Otherwise, this issue will cast a shadow over the negotiations that will only inflame things.

Boeing ups 737 production to 42/mo from 1H2014

Boeing announced today that it will increase the production rate of the 737 to 42 a month from the first half of 2014. This is on top of consecutive rate increases from 31.5 to 35 to 38 a month, which haven’t even been implemented yet. The 38/mo is due to be effective in 2013 and 35/mo next year.

Here is the press release.

This compares to an announced rate of 42/mo for the Airbus A320, although 737 Program Vice President and General Manager Beverly Wyse said during the Boeing pre-Paris Air Show briefing that because Airbus shuts down production in August for the month, the 42/mo really equals 40/mo. (With the announced rate increase, Boeing lifted the news embargo on Wyse’s presentation; embargoes on other briefings remain until June 19 Paris time.)

Boeing’s thinking still up in the air on New Small Airplane

Boeing promises “clarity” at the Paris Air Show about its New Small Airplane (NSA) program, but aside from settling on the performance it believes is required, little clarity has truly been achieved inside Boeing.

We learned last week key insights to Boeing’s thinking–and the divisions still remaining–within Boeing about the direction to go with the NSA. Our information comes from within Boeing, but the sourcing remains unidentified because the sourcing was not authorized to speak to the press. This information was obtained entirely separate from the pre-air show press briefings held June 2-3, which are embargoed to June 19 (Paris time)/June 18 Seattle time.

Information has been cross-checked with others and with statements made by Boeing executives in the public domain.