Wednesday, July 8, 2009

Labor has pivotal role in keeping 787 production in Washington

Puget Sound Business Journal (Seattle) – by Steve Wilhelm

Labor experts believe that Boeing’s largest union is more likely to agree to a contract extension than a semi-permanent no-strike clause.

The internet was buzzing Wednesday morning with reports that top Boeing Co. (NYSE: BA) management is demanding a union promise to refrain from striking as a condition of keeping the assembly of 787 jets in Washington.

This emerged as the latest round in the struggle over whether or not Boeing will keep manufacturing all its commercial aircraft in Washington, following Boeing’s July 7 announcement that it is buying the South Carolina facility of its prime 787 supplier Vought.

Extended labor contracts are becoming more common, especially in the recession, and might be a reasonable way for the union to respond to management’s need for stability, said Gary Chaison, professor of labor relations at Clark University in Worcester, Mass.

“Unions are more willing to reach an agreement that’s longer,” he said, adding that the average collective bargaining agreement is now four to five years.

“It makes sense for everybody. It makes sense for workers, because there won’t be times of confrontation for a while,” he said. “It makes sense for company, because it creates stability. It creates predictability, and it makes sense for both parties. I can’t see why there would be strong objections to it.”

A longer contract would automatically prevent a strike, because all contracts contain prohibitions against union strikes or company lockouts while they’re in effect.

What Chaison and others don’t expect is a union agreement to refrain from striking for an indefinite period of time.

“The strike is the only weapon that labor unions actually have. Giving up that weapon, it’s hard to know what they’d have left,” said Edward Greenberg, professor of political science at the University of Colorado, Boulder, and co-author of a soon-to-be-published book on Boeing labor relations.

Greenberg pointed to a parallel with the New York City bakery Stella d’Oro, which was locked in an 11-month strike with its workers and settled the dispute on July 7, but then promptly announced it was closing its Bronx factory.

“I think Boeing is serious, I think they’ve been leaving the state of Washington, and trying to find a more labor-friendly environment for a while,” Greenberg said. “I think that’s what all this global partnering thing is on the 787.”

Boeing’s newest contract with the International Association of Machinists and Aerospace Workers Local 751, approved in late 2008, is for four years, up from the normal three. That suggests that an even longer contract might be possible.

The contract followed a 57-day strike in the fall of 2008, which many observers consider a turning point in Boeing management’s view about the future of the company. In particular, since then the notion has spread that Boeing might choose a right-to-work state, especially in the Southeast, for a second 787 assembly line.

After Boeing moved its corporate headquarters to Chicago in 2000, the company has been losing its allegiance to the Northwest, and instead focusing on what locale will help it compete against Airbus as well as other up-and-coming aircraft builders.

“The purchase of the Vought plant demonstrates to me that the Boeing Co. is serious about doing whatever it deems necessary to increase efficiency and stay competitive in the global economy,” said Aaron Reardon, Snohomish County Executive. “They will do what is necessary to stay in business for another 100 years.”

Reardon adds that what he’s seen in his communication with Boeing executives is that this is a much more bottom-line company.

“This is a different Boeing Co.,” he said. “They don’t act twice, they don’t state their needs over and over in the hope someone will listen, they don’t waste time, they take very swift decisive action.”

Boeing spokesman Jim Proulx declined to confirm any discussions that Boeing officials may have had with congressional leaders.

U.S. Rep. Norm Dicks, D-Bremerton, spokesman George Behan said that Dicks had no more to say, after the latter’s comments were published in The Seattle Times early Wednesday.

In that interview, Dicks was quoted as saying “The whole thing comes down to, can they get a long-term agreement with the union, with a no-strike clause.”

Behan said, “He’s going to work with the delegation, the governor, labor leaders out there. We have pretty good relations with workers, with the labor unions.”

Union officials did not return calls by deadline.

Chaison said he expects the question of how to respond to Boeing pressure will create fault lines within the union.

Some members will stand on principle, while others will be fearful of losing some of the best manufacturing jobs in the state.

“A lot of speculation is going to be involved on the union side if this is a good deal, bad deal, if it hampers them or is better than nothing,” Chaison said. “Most people would say, ‘These are not the times for a fight, and what we’re more interested in is the stability of the company, because that means the stability of our jobs.’”