Boeing’s trouble may continue even if machinists agree to new contract tomorrow

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Striking machinists at Boeing will vote Wednesday on a new contract offer. It comes as the company is set to release disappointing quarterly earnings amid production and quality control problems.



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Striking machinists at Boeing will vote tomorrow on a new contract offer. The strike is now in its second month, and it’s just the latest setback in a brutal year for the plane maker. Boeing has lost billions in the past quarter alone, and the company’s new CEO is looking to make big changes, as NPR’s Joel Rose reports.

JOEL ROSE, BYLINE: The strike has halted production of Boeing’s top-selling planes for more than five weeks.

APRIL SIMS: Hello, machinists.

UNIDENTIFIED GROUP: (Cheering).

ROSE: But you wouldn’t find much sympathy for management at this union rally in Seattle last week.

SIMS: I’ve heard that Boeing is claiming poverty.

UNIDENTIFIED GROUP: (Booing).

ROSE: April Sims is the president of the Washington State Labor Council. She says Boeing’s problems are self-inflicted, as its leaders spent billions of dollars on stock buybacks and shareholder dividends while wages for workers stalled.

SIMS: Sixty-eight billion dollars for shareholders, and they can’t give you your due.

UNIDENTIFIED GROUP: (Booing).

SIMS: That sounds like some [expletive] to me.

UNIDENTIFIED GROUP: (Cheering).

ROSE: The machinists’ union overwhelmingly rejected Boeing’s first contract offer in September. Now there’s a better one on the table, but even if it ends the strike – which is no sure thing – the crisis at Boeing may go on. The company is losing over a billion dollars a month as it grapples with production and quality-control problems. And it’s about to lay off as much as 10% of its workforce.

KEVIN MICHAELS: Boeing is a bloated mess. They’re very top-heavy, and that slows down their decision-making.

ROSE: Kevin Michaels is managing director at Aerodynamic Advisory, an industry consulting firm. He’s also worked closely with Boeing’s new CEO Kelly Ortberg, when they were both at the firm Rockwell Collins in the ’90s. Ortberg declined an interview request. He’s taking over at a crucial moment for Boeing. The head of Emirates, a major airline, said this month that Boeing could be headed for bankruptcy, though Kevin Michaels doesn’t believe things are that bad yet.

MICHAELS: I don’t think that bankruptcy’s inevitable. It is a possibility. It’s a higher possibility today than it was six months ago or a year ago, but I don’t think it’s inevitable.

ROSE: In the long run, Michaels still thinks Boeing can turn things around, especially if it’s able to sell off parts of the company that are underperforming, including some of its space portfolio. For now, the focus is on Boeing’s latest proposal to its striking machinists. It’s offering a 35% wage hike, closer to the 40% raise the union wanted. The company would also increase its contributions to employees’ 401(k)s. But there’s one key union demand where Boeing has not budged.

UNIDENTIFIED GROUP: (Chanting) Pension. Pension. Pension.

ROSE: At the rally in Seattle last week, the union’s rank and file made it very clear that they want to reinstate the pension plan they lost a decade ago. It’s a top issue for Kat Kinckiner. She’s a union steward at the plant in Renton, Washington, where Boeing assembles the 737.

KAT KINCKENER: When we lost our pensions, I cried. This was my future. And to see something just taken like that was just devastating. And I remember then, all of us said, this next contract, we’re not taking that [expletive]. It’s not going to happen anymore – not to us, not like that.

ROSE: When the machinists voted on the first contract offer, the local union president Jon Holden knew they were going to reject it. This time, Holden says he’s not sure.

JON HOLDEN: Our members have been able to get Boeing to move a lot, but there’s still a lot of anger over what happened 10 years ago. And, I mean, those wounds don’t heal easy, and I know that many are still thinking about those things. I hope they’ll consider this, but it’s up to them.

ROSE: We’ll find out tomorrow if Boeing’s offer is enough to get the company’s 33,000 machinists back to work. Joel Rose, NPR News.

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