As if the Boeing 787 problems weren’t enough of a headache for the company, the second vote by its engineers will be counted tomorrow on a contract offer.
SPEEA members rejected the first contract offer from Boeing in October with a 96% vote. Boeing subsequently agreed to extend the current SPEEA contract provisions except for all issues related to the pension. The headline issue on this section is that Boeing wants to shift from a defined benefit retirement plan to a defined contribution plan. SPEEA says this results in a 40% reduction in benefits; Boeing says it’s less than that but still significant.
Boeing points out that all non-union employees are on a defined contribution plan and new hires for the unions should be, too. Current members would retain the defined benefit plan.
Boeing hopes this split approach will be enough to win approval for the new contract offer.
Also being voted on: whether members will grant SPEEA negotiations authorization to call a strike should the contract be rejected. Executive Director Ray Goforth has already said negotiators would not call an immediate strike, but they will seek a return to the bargaining table.
[Reuters has this article profiling Goforth.]
The hazard is that Boeing could withdraw its “Best and Final Offer” on all the other issues it agreed to and seek to renegotiate the entire contract rather than just the pension issues. Of course, this would incense union members and make a settlement ultimately that much more difficult.
Boeing needs the engineers to resolve the issues surrounding the 787, and to return the plane to service–the number one priority of 2013, says CEO Jim McNerney. The development programs of the 787-10 and 777X can wait (and, according to our information, these have been pushed to the right as a result of the 787 issues). Management’s lead engineer, Mike Delaney, basically said SPEEA members aren’t needed–that Boeing can rely on other engineers to resolve the 787 problems, a statement that went over like the proverbial screen door in a submarine.
In a webcast for SPEEA, Ray Conner, CEO of Boeing Commercial Airplanes, played the patriotic card, according to those who listened to it, by saying a strike would hurt customers and aid Airbus. (Boeing traditionally doesn’t comment on internal employee communications.)
We think the vote will be close, though we don’t know how to define it other than we don’t expect margins to remotely reflect the 96% rejection last October or the 85% rejection by IAM 751 in 2006 (and a similar strike vote). As we’ve talked to people, the sentiment seemed fairly evenly split with a tilt toward rejection and a strike vote.
Unlike IAM 751, which needs a two-thirds vote to strike, SPEEA needs only 50% plus one.
Votes will be counted tomorrow, Feb. 19; results will be known tomorrow night.
As the Boeing 787 problems evolve from annoying, in-service teething issues into a fire, a full program review by the Federal Aviation Administration, a second battery issue and now a grounding, the program review raises almost as many questions as it hopes to solve.
The FAA has never been adequately staffed, nor staffed with enough experts, to conduct program development and certifications without relying on the manufacturers and supply chains to provide analysis and expertise.
Since the creation of the FAA, this system has worked pretty well. Although some may argue that the FAA and the industry are too cozy—and sometimes there certainly appears to be justification in this criticism—it’s in nobody’s interest to screw up. The airplane makers and their stakeholders have to make safe airplanes. The FAA—the regulators—have to assure that the airplanes are safe. The airlines, who carry the passengers, clearly need safe airplanes.
SPEEA, the engineers union at Boeing, and the company appear to be at odds in the early stages of contract negotiations and there appears virtually no chance of a surprise breakthrough similar to the IAM 751-Boeing contract last December.
People familiar with the situation on both sides say they are hunkered down for traditional contract negotiations in advance of the October 4 amendable date.
SPEEA suggested in June 2011 that both sides go to binding arbitration as a first, not last step as a way to speed up a contract and avoid protracted, potentially contentious negotiations. Boeing declined, according to SPEEA and confirmed by a person familiar with the Boeing position. According to two sources, Boeing didn’t want to give up decision-making to a third party. Boeing also didn’t see the urgency or need to avoid normal contract negotiations, according to the person familiar with the Boeing thinking.