Boeing, SPEEA talks take a turn for the worse

Labor contract negotiations between Boeing and SPEEA took a turn for the worse (and things were bad already) when Boeing asked for federal mediation.

If this request is granted, SPEEA won’t be able to strike while mediation is in process. Only after an impasse was declared by the Mediator, could SPEEA walk out (or conversely, Boeing could lock out the union).

If mediation is granted, Boeing buys an indefinite time during which aircraft deliveries was proceed more or less uninterrupted.

Update, 530 PST: Well, it seems our long history in the airline business got the better of us. In 20 years we never saw a strike happen until an impasse was declared in a mediation. As Nixon press secretary Ron Ziegler famously said, the statement above is “inoperative.”

SPEEA is already engaging in job action, refusing voluntary overtime and working to the rules. Look for this to expand.

The last time SPEEA struck for an extended period—40 days in 2000—Boeing deliveries for the year dropped by 50.

Negotiations update, Nov. 29, 2012 

 Boeing proposes mediation in SPEEA negotiations

 Today, the company responded to SPEEA’s counter proposal regarding wage increases, the Voluntary Investment Plan and the BCERP basic benefit. Because the differences between the parties are still significant, and this was clearly reinforced during today’s conversation, the company proposed that a federal mediator meet with the Boeing and SPEEA teams. We hope the expertise of the Federal Mediation and Conciliation Service can help move the two sides toward a resolution.

 During today’s session, we explained the salary increase pools proposed by SPEEA for both the professional and technical units of 6 percent a year for three years would move the salaries of our employees above the Puget Sound market. We also pointed out that SPEEA’s proposal to allocate two-thirds of the salary pool to all engineers and techs significantly slows the salary growth of top performing engineers and techs.

 We explained that our Voluntary Investment Plan company match of 75 percent of the first 8 percent employees contribute is already market leading when compared with our aerospace peer companies. SPEEA proposed a company match of 75 percent of the first 10 percent.

 Finally, we explained that the company’s proposal to increase the BCERP basic benefit each year over a four year contract to $85, $87, $89 and $91 keeps the plan market leading. SPEEA proposed to increase the basic benefit each year over a three year contract to $87, $93 and $99. The vast majority of SPEEA-represented employees retire under the pay-based benefit which will continue to go up with pay increases, including EIP, and will make an already market-leading plan even better. 

 The intent of our proposal is to improve upon a total compensation package that already leads the market. The question is — how far can the package exceed the market while we remain competitive as a business for the long term.

 We encourage you to log on to the negotiations website to see regular updates where you’ll also find the Pay & Benefits Estimator. The Estimator shows how the company’s offer will affect you personally.

And the SPEEA message:

Odds and Ends: Boeing’s next twin-aisle strategy; Lion Air/Airbus: you read it here first

Boeing’s next twin-aisle strategy: Aspire Aviation has this long article looking at when Boeing will launch the 787-10 and 777X.

Our thoughts on the topic: We are hearing EIS for the 787-10, as Aspire reports, will be 2018 or beyond and that EIS for the 777X will likely be 2020 or beyond. As always, the situation is fluid and things could change. Aspire’s projection of a formal 787-10 launch in June is timed, probably not so coincidentally, for the Paris Air Show. (Unlike the boring Farnborough Air Show, Paris already is shaping up as a prospectively exciting show. Bombardier announced first flight of the CSeries is now expected in June [before, during or after the Show?] and Airbus would like to fly the A350 before the show–something that will likely be a challenge.)

We know Boeing continues to wait as long as it can in hopes Airbus will commit to a final design of the A350-1000 before launching the 777X, but time may be running out unless Boeing is willing to extend the gap between EIS of the -1000 and EIS of the 777X.

A 2018 or later EIS of the 787-10 means Boeing will avoid the EIS of two airplanes (the MAX and the -10) simultaneously, which could be a lesson-learned from the 787/747-8 programs. Readers may recall that Jim Albaugh, former CEO of Boeing Commercial Airplanes, said Boeing would avoid this in the future after experiencing the problems of the two programs.

Perhaps, and this is speculation, extending the time between EIS of the 787-10 and the 777X is partly driven by the same concern.

Given program history, at least some Wall Street analysts we’ve talked with are already raising the prospect that the 737 MAX EIS (4Q2017) might slip. Why? They are concerned about the broadening design creep as well as development of the CFM LEAP-1B. Can they point to anything concrete? Not yet. Chalk the conversation up to Boeing’s poor performance on the 787 and 747-8 programs and the fact that there are still industrial issues with the 787 suppliers, according to the chatter.

You read it here first: Aviation Week reports Lion Air is considering Airbus A320s to supplement its Boeing 737 fleet. We reported this on September 24.