Boeing workers show their power
reports from the picket lines of the IAM strike against Boeing.
PRODUCTION LINES at Boeing, one of the world's most powerful corporations, ground to a halt after midnight September 6 when a 48-hour contract extension came to an end, and International Association of Machinists (IAM) members went on strike.
The IAM represents 27,500 members at Boeing--25,000 in Washington's Puget Sound region; 1,200 in Portland, Ore.; 700 in Wichita, Kan.; and 70 at Edwards Air Force Base in California.
On the Everett picket line outside Boeing's main--and now silent--manufacturing plant where over 20,000 IAM members work, Jun Delos Santos, an employee for a year, working on 777 Body Structure, summed up how machinists felt about Boeing:
I don't like striking. I've got two kids and a wife. But if we don't strike for this now, who's going to fight for it? Nobody. If they can nail us down now, they're going to do it every contract. Every contract, they will just oppress the little ones. And it makes me feel really angry.
That anger was evident September 3 when IAM members, by a resounding 80 percent margin, voted down Boeing's "last, best and final" offer. Then, by an even bigger margin of 87 percent, they voted to authorize the union leadership to call a strike.
But instead of calling the walkout, Mark Blondin, the former president of IAM District 751 who, since the last 28-day strike in 2005, has been promoted to national aerospace coordinator for the IAM, announced that the union had agreed to return to the table with a federal mediator for 48 hours.
The Seattle IAM hall immediately erupted in a chorus of boos, as infuriated machinists shouted down Blondin and current District 751 President Tom Wroblewski.
While the two sides did meet at the Walt Disney Coronado Springs Resort hotel in Orlando, Fla., where the IAM is holding its international convention, the machinists might as well have been on strike. As a September 6 Seattle Times article pointed out, according to reports from IAM members, as many as 30 percent of workers stayed home Thursday and Friday instead of working during the 48-hour contract extension.
THE MAIN issues in this fight are pensions, wages, health care cost increases and outsourcing.
Boeing is offering a pension increase from $70 to $80, which would increase a machinist's monthly pension payment after 30 years of work by 14 percent, from $2,100 a month to $2,400. While it's an improvement, for the union, it isn't enough. Top Boeing executives who "earn" $3 million a year receive an annual pension of $1.4 million, or $120,000 a month--or 50 times what a machinist would earn.
Boeing offered a lump-sum, first-year-only payment, plus a ratification bonus of $2,500 and an 11 percent wage increase over the three-year contract (5 percent, 3 percent, 3 percent). The union is demanding a 13 percent wage increase over three years.
Commenting on the wage proposal not meeting rising inflation, Jun Delos Santos said, "I know right now we don't get paid as much as new guys, but later on, as we progress, we'll get paid more. But still it's not enough. The way that commodities are going high, prices are going high, gas is going high, we can't keep up. There's no way."
On top of this, any wage gains would be offset by increased health care costs. Among many increases Boeing tried to shove through was raising annual out-of-pocket maximums for a family of three or more, from $4,000 to $6,000 per year.
The biggest contract issue revolves around outsourcing. According to TheStreet.com, about 70 percent of the work on Boeing aircraft today is done by outside employees. As a result, the IAM is pushing to strengthen contract language to ensure no union member will be laid off because of subcontracting. Boeing has refused this language.
Boeing could easily meet the IAM's demands. It is flush with cash. Since the last contract was ratified, profits have been $8.5 billion. The company has made $13 billion since 2002, with $4.1 billion of that coming last year alone. Profits were over $2 billion in the first half of this year.
It's clear that Boeing hoped to use the union's undemocratic constitution to its advantage. For a strike to happen, even if a majority of members vote the contract down, two-thirds must vote for a strike to take place. Boeing's "last, best and final" offer frontloaded the contract with money, as management tried to buy off one-third of union members in the strike vote.
Boeing was banking on a change in the demographics of the workforce to shove through a concessionary contract. According to Bloomberg.com, in 2005, when 18,500 workers walked out, there were only 37 machinists under the age 30. Now there are 2,300--about 10 percent of the IAM membership in Boeing's main Everett manufacturing hub--because Boeing has recalled laid-off workers and hired new employees.
While the average machinists salary is about $54,000 a year, more than 4,000 machinists make less than $30,000, according to the union.
The overwhelming strike vote proved management couldn't buy off newer workers. People like Jun Delos Santos, who makes just over $13 an hour, show why. When asked what the biggest single strike issue was for him, he said, "To me, I want to take care of my brothers here at the union who are retiring. I have a friend here who wants to retire, but he can't because the medical care is too expensive."
THIS IS the fourth strike by the IAM in the last 20 years--following earlier strikes in 1989, 1995 and 2005--and the seventh in the IAM's history.
This time, the stakes for the IAM--and for the labor movement overall--are higher. In addition to being the world's second-biggest commercial airplane manufacturer, Boeing is also the Pentagon's number two military supplier. According to TheStreet.com, Boeing is the largest employer in Washington state and largest exporter in the U.S.
But as powerful as Boeing is--it has $10 billion to try to wait out the strikers--the machinists have the power to take on the company and win. In fact, the IAM arguably has the most leverage it has ever had, thanks to Boeing's backlog of more than 3,400 aircraft it has orders to build. This eight-year backlog--worth $346 billion in future sales to Boeing--is the biggest in its history.
The company has a backlog of 900 orders, worth $155 billion, for the new 787 Dreamliner alone. According to Business Week, it's the most anticipated commercial jet in history. However, the 787 is more than 15 months behind schedule. The delay has cost Boeing some $2 billion or more. As a result, a strike could cost the company $120 million a day, or $3 billion a month, as customers' planes sit idle on the production lines.
Boeing workers have a sense of their power--and the rank and file is as angry as ever. On the day of the strike vote, more than 7,000 machinists marched from the plant in Everett to the IAM hall to vote. At the same time, some 2,000 of the 3,600 machinists from the Renton plant marched and rallied.
At the Everett picket line, Paul Thai, a seven-year veteran who has been laid off twice in the last 10 years, summed up well why the strike was happening. "We build the plane," he said. "We build the profits for the company--us union members, 27,000 of us to build a plane. We make the profits for the company. They need to give more to us."