Boeing's missed opportunity with the Machinists
Boeing squandered an opportunity for a new kind of labor relations in its recent negotiations with the International Association of Machinists, writes guest columnist Dan Jacoby. These approaches eventually will force a new form of global labor to more successfully address the rising desperation.
Special to The Times
IF ever America faced the possibility for a new kind of labor relations, certainly the most recent International Association of Machinists (IAM) proposal tendered in its talks with Boeing was one. Unfortunately, seeking immediate gains, Boeing let this possibility slip away and once again exhibited the kind of managerial shortsightedness that has become symptomatic of our "new economy."
Boeing found unacceptable IAM's offer involving an unprecedented eight-year pact in exchange for employment assurances and non-hostility on its part when the union campaigns for recognition in other areas. Its refusal to entertain this proposal suggests that the corporation never really desired an agreement to stabilize employment relations here in the Northwest.
Surely, the company's insistence upon a 10-year agreement instead of the eight years IAM offered, and its demand for 2-percent annual raises instead of the 3-percent IAM sought, are the kinds of differences typically negotiated through bargaining. These details pale beside the willingness of IAM to enter into a long agreement securing labor peace.
No American union can give up the right to strike forever without obtaining some assurances for the future of their workers. Consequently, an attempt to settle wages and job-security disputes for the duration had to be a part of the agreement. We'll never know whether the union would have conceded more because the corporation broke off talks in order to take the $170 million South Carolina offered for locating there.
The circumstances surrounding the breakdown in talks between the union and the company followed the familiar pattern Boeing has pursued since the mid-1990s when it first declared it wanted to be less reliant on unionized labor, and wished for a more business-friendly state. The corporation has used every opportunity it could to whipsaw its partners, the state and the union to extract concessions.
Having sought and extracted maximal advantages by shifting its headquarters to Chicago in 2001, Boeing was well-positioned to prod the state into a $3.2 billion tax subsidy in exchange for locating the 7E7 (now the 787) in the Northwest. In similar fashion, the company used the threat of outsourcing to impose giveback on its two unions, SPEEA and the IAM. Where the state gave in, the company never thought the unions would fight back as hard as they did.
So, here we are in 2009. IAM accepted Boeing's idea that a long-term accord was possible and made an offer that the company declared unacceptable, even though the company had earlier declared that long-term stability was the essential problem.
In so doing, Boeing turned down a proposal that had the capacity to revolutionize labor relations by creating a long-term interest among unions and management to work toward common ends, put aside past disagreements and focus on efficiency and quality. Given the difficulties that Boeing has had in managing the production of planes using distributed suppliers, it certainly seems as though this should have been an attractive option.
When it comes to labor, the public has become tired of business as usual. If its true, as internal Boeing memos suggest, that one deal breaker for Boeing was the requirement that the firm stay neutral in union-recognition battles across the nation, it tells us that management has simply decided that organized labor has to go.
That attitude will only bring more heated disputes, which business hopes will discredit labor. However, the plain fact is that Americans are wrong to think labor is irrelevant to today's world.
Current trends are pushing the nation toward conditions resembling those that persisted in the late 1800s when the necessity for labor struggles to achieve decent wages, hours, safety, respect and security was self-evident. Policies, like Boeing's, that push U.S. working conditions toward levels found in developing countries will eventually force a new form of global labor that can more successfully address the rising desperation.Dan Jacoby is a UW Harry Bridges Chair of Labor Studies, Emeritus. He teaches economics at the University of Washington, Bothell within its Policy Studies Program.
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