Can the Machinists Save Boeing from Its Management?

Boeing has increased its offer to striking Machinists, hoping to end a work stoppage that entered its eleventh day today. According to the Seattle Times, the new proposal would raise wages 30 percent over four years, as opposed to 25 percent in the offer that workers rejected by 94.6 percent.

Mediated talks with Boeing broke off September 18, the union said, with nothing more scheduled. Then on Monday morning, the company announced a new offer in the press. Twelve hours later, the union responded that Boeing “has missed the mark with this proposal.”

In a scathing statement, the negotiating team noted that the company misled the press “by wrongfully stating that the union membership is required to vote on the their latest offer... They are trying to drive a wedge between members with this divisive strategy.”

According to news reports, the offer would restore the annual bonus and slightly increase the 401(k) match, but it does not restore the defined-benefit pension the company froze in 2016, dumping everyone into a 401(k). The signing bonus would be hiked from $3,000 per worker to $6,000.

Meanwhile, picket lines have settled into a routine at the massive assembly plants in Renton and Everett, Washington, the smaller Auburn fabrication plant and the Gresham, Oregon facility. The 32,000 striking Machinists are members of IAM Districts 751 in Washington and W24 in Oregon. The strike is costing the company $100 million a day, Bloomberg estimated.

Workers are taking side gigs and living on savings. Strikers will receive $250 a week from the union starting the third week on the strike, but will lose health coverage September 30 if they don’t pay for a COBRA extension.

Boeing’s 16,000 engineering staff, members of the Society of Professional Engineering Employees in Aerospace (SPEEA), are contractually required to continue work during the strike, but they do not have to do Machinists’ work unless directly ordered to, their union has advised. Members said there is little sign of that happening.

Some SPEEA members have been joining Machinists on the picket lines before and after work, and are posting workplace signs in support of the strike. When the company suggested it could furlough some engineers to save cash, SPEEA responded with a firm no, citing their contract.

CROCODILE TEARS

Boeing management had pleaded with union members to consider the company’s frail position and huge backlog of plane orders. But workers dismissed the company’s scaremongering, voting 96 percent to strike, and walked out at midnight September 12.

While Boeing wailed that the strike may cause mortal wounds to the company, the Machinists union has for decades been fighting against the company’s self-wounding practices: rampant outsourcing, undermining of quality inspections, moving work to non-union shops, and hollowing out what used to be a coveted family-sustaining job.

Company policies have resulted in the loss of experienced workers, production delays, mismatched and shoddy parts, and the disastrous quality lapses that led to an Alaska Air door plug blowout in January.

QUALITY INSPECTIONS CUT

It was the union that was originally responsible for pushing the separation of quality inspection from production pressures, said Steve Cabana, a quality assurance inspector for 13 years. “Having quality separate in the supervisory chain is the only way quality can have any teeth,” he said. “I can look at a process and stop it.”

This is not true at vendors the company buys parts from, Cabana said, where they have “the same management system for manufacturing and quality.”

“That’s how the company figured it could save money by outsourcing, because other people didn’t have the same rigorous standards,” Cabana said.

“It’s a fragile network of suppliers who honestly aren't compensated all that well for the work that they do,” said Mylo Lang, an apprentice machinist at Auburn with six years at the company. “They've really been squeezing them, in fact, over the years.”

In Boeing’s own plants, the company has tried to slash inspections, too.

The Federal Aviation Administration (FAA) requires in-person inspections by qualified workers, but in 2017 Boeing tried to speed up production by having mechanics sign off on their own work.

At the company’s assembly plant in North Charleston, South Carolina, which currently has no union, the lack of worker power and input meant the company tested out cuts to quality inspections there first, around 2017, then expanded into the Puget Sound plants, where union members rallied to stop the cuts, flooding meetings and making the question a shop floor issue.

‘IT’S NOT OK TO CUT QA’

“We still see yellow ‘It’s Not OK to Cut QA’ (Quality Assurance) stickers around the plant,” said one six-year Everett worker who recalled that in 2018 the company tried to cut 900 inspectors, out of 3,000, “with the intention of pushing that work onto the production mechanic using automated technology sensors.” At Everett they build 767, 777, and 787s.

Tests of function, inspections of shimming (slender shims make the plane’s airframe durable over a lifetime of stress), and tests of riveting were all on the chopping block. The union calculated that Boeing removed 3,200 inspections on each 737 Max, from a total of 11,000.

But the company didn’t listen, so the union went to the FAA with official complaints. In 2021, the FAA found that Boeing was violating federal regulations and defective systems and parts were getting through as a result.

The union wants more power to stop corner-cutting. District 751 President Jon Holden told Fortune in June: “We’re proposing that we have the right to negotiate provisions that go into the safety and quality of the planes.”

STOCK PRICE OVER EVERYTHING

Boeing’s troubles, workers say, started when the company merged in 1997 with McDonnell Douglas, a failing military contractor which also made some civilian aircraft.

“McDonnell Douglas went south, latched onto Boeing, and somehow got on the board,” said Edwin Haala, who worked at Boeing for 25 years. McDonnell Douglas management team—disciples of General Electric’s “Neutron Jack” Welch—ended up taking over.

As at GE, the price of corporate shares became the only test of success—and corporate leaders’ attention to stock price was sharpened by their own compensation in stock options.

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Boeing slashed costs, outsourced work, and refused to invest the large chunks of money required to develop new aircraft. This led to the cheaper (and, it turned out, disastrous) reworking of the company’s workhorse 737 into the 737 MAX.

Awkward design workarounds on the already FAA-approved plane led to the 737 MAX 8 crashes in 2018 and 2019 that killed 346 people.

“That's what happens when you have people making decisions whose absolute bottom line and final and complete vision is profit,” said Lang.

While Boeing complains that it’s short of cash, and now is paying a premium to borrow money (its rating is just above junk), Voss pointed out that the company spent $38 billion on stock buybacks from 2014 to 2018, juicing the stock price and advantaging corporate leaders who receive compensation in stock.

Buybacks, which were largely regarded as stock manipulation until 1982, reward shareholders in a way that avoids taxes on their gains. “It's not worker appreciation,” said Voss. “It's not updating facilities. It's just toeing the line for Wall Street.”

HIGH TURNOVER

The unions demands on pay, pensions, health care, and mandatory overtime would reduce turnover, workers say.

Hearings on the door-plug episode revealed dizzying turnover numbers. Machinists Business Agent Lloyd Catlin testified at a National Transportation Safety Board hearing August 6 that the company told him that in the Renton facility, “60 percent of the Boeing workforce, including management, had less than two years at the Boeing Company.”

Many don’t make it past the first year. “You talk to any Boeing worker about their first year, and everyone knows that it is the worst thing in the world,” said Lang.

The rejected contract would have at least allowed first-year workers to use their paltry vacation hours as they accumulate them, rather than waiting to the end of their first year. But aside from allowing one more floating holiday day, the tentative agreement didn’t address the stingy vacation policies. Lang, with six years in, gets two weeks.

“Boeing wants to talk about, like, keeping workers on and getting them trained, right? Like, let people be sick. Let people have a f*cking life,” he said.

OVERTIME WOES

Paltry leave is on top of massive mandatory overtime. Previous bargaining already limited mandatory overtime to 112 hours every three months. But that still left people exhausted and broken, said Voss.

Speaking before the strike, Voss said that in his shop six people had resigned in the previous week. He listed their reasons: “‘I don’t like it,’ ‘It’s not what I thought it was,’ ‘It’s not worth it,’ ‘I have a better job.’”

He said this level of turnover is not uncommon for his shop, which is particularly stressful: “We’re installing systems, electrical and plumbing and fuel and hydraulics, and the way it is laid out is very complex and confusing if you haven’t been there for a while. So people are kind of just thrown into this mess.”

When Lang started at Boeing he worked on the 737 MAX in Renton and had a lot of 70-hour weeks mandated. “Like, you either show up to this place for 70 hours in a week or you lose your job. And that is not the way that we should operate in a free society.

“I would rather that we don't have mandatory overtime in the contract. Like, that doesn't seem like something that we ought to be okay with having,” said Lang.

Voss said the low pay and forced overtime are decisive in driving workers away, “because of the absolute pressure that is put on people for such little return. We’re barely valued as human beings; we’re effectively just a number. People want a sense of respect, and part of that sense of respect comes with a living wage.”

The rejected tentative agreement would have banned two mandated weekends in a row. But Lang, in Auburn, said he worried that the company would just end up moving the mandated overtime into 10-hour days rather than weekend work.

And many workers said they were working excessive overtime that wasn’t mandatory—but it might as well have been, because the low base wages made premium hours impossible to pass up. “I will forever regret the amount of overtime I’ve had to do to provide for my family,” said Jeff Simons, a lead rework mechanic on his fifth strike. “That’s everybody in America. But this company needs to fix our problems.”

This article was updated to reflect the union’s response to the company’s offer.