What is the whole case of the Boeing strike? Know the full news here

Boeing Strike: The tale of what happens when cost-conscious management loses the plot and it is up to the employees to put everyone back on track is at the core of the Boeing strike, which started on Friday. Boeing did not turn a profit in 2018. Since 2018, when a slew of fatal accidents and near-disasters destroyed the company’s image and bank account, the jet manufacturer has actually experienced annual losses. Had Boeing been any other company, rather than the too-big-to-fail part of a worldwide duopoly, it most likely would have filed for bankruptcy.

Nevertheless, the CEO, who is an accountant by background, received a 45% compensation increase to about $33 million in 2023.

In the meantime, the salaries of Boeing’s 33,000 unionized workers have remained unchanged.

They are just plain angry.

This strike was unavoidable due to a combination of pandemic-era inflation, a revived labor movement, and years of pent-up animosity over Boeing’s mismanagement.

Boeing’s management and union relationship has not always been harmonious.

Former attacks “happened because one side wanted to destroy the other,” according to Richard Aboulafia, managing director of AeroDynamic Advisory. The most recent strike occurred in 2008. However, he said that management was the main source of the hostility in recent years.

When CEO James McNerney said during an investor call in 2014 that he would postpone retiring because “the heart will still be beating, the employees will still be cowering,” he exacerbated relations with the lower ranks. Union members haven’t forgotten the statement even today, according to Aboulafia, despite his subsequent apology for it, which he described as a “joke gone bad.”

Kelly Ortberg, the recently appointed CEO of Boeing, has an early test and an opportunity because of all of this. She took up the role only five weeks ago.

With almost four decades of experience in the aerospace industry, Ortberg is a mechanical engineer. He has the difficult task of correcting ten years’ worth of executive errors that damaged the company’s relationship with its unionized workforce, which makes up about 20% of all Boeing employees, and put efficiency ahead of quality.

A strike is hardly ideal for the new CEO, particularly considering Boeing’s other problems: two of its astronauts are trapped in space and waiting to be rescued by SpaceX, Boeing’s rival; numerous federal investigations are underway into the nearly catastrophic doorplug blowout that occurred in January; a group of irate customers; and the company’s stock price has dropped by 40% this year.

However, Ortberg seems to have gained some favor so far. He announced he would work primarily from the Seattle office, which is close to several factories and roughly 2,300 miles away from the company’s corporate offices in Virginia, which have come to symbolize Boeing’s departure from its roots, after spending his first day on the job last month touring the Renton, Washington, factory floor.

Ortberg acknowledged the workers’ frustration over almost two decades of earlier contracts that reduced their retirement and health care benefits, but he also advised workers not to go on strike ahead of the walkout.

Negotiations coordinator for the International Association of Machinists Union, Jon Holden, said, “I think Mr. Ortberg was in a tough position coming in.” “It’s difficult to make up for sixteen years, and I believe he was in that situation.”

Fiercely critical of Boeing’s management, Aboulafia expressed optimism that the strike may be resolved “pretty quickly.”

He said, “Your previous leadership team was incredibly dull and unimaginative, and they only understood cost.” “At last, you have someone who knows what’s at risk.”

The union’s decision to reject Boeing’s offer, which included a 25% wage rise spread over four years, would seem unexpected to outsiders.

The agreement was praised by union negotiators as the finest they had ever seen from Boeing. Nevertheless, members decisively decided to reject it, despite their demands for a 40% wage boost over the four-year contract—not nearly as substantial as previous CEO Dave Calhoun’s one-year jump.

Holden acknowledged that it’s hard to isolate the reasons behind the resistance, but that workers want more pay, greater vacation time, and improved job stability to offset years of inflation.

The company’s 2011 decision to create a nonunion factory in South Carolina to handle a portion of the 787 Dreamliner manufacturing is largely to blame for the rank-and-file’s ire. 2020 saw Boeing move its remaining Dreamliner manufacturing from its unionized factory in Washington to South Carolina as the pandemic severely reduced demand for the aircraft.

A further source of resentment arose when the union agreed to a number of concessions in 2011 and 2013, including the termination of conventional pension schemes, in exchange for Boeing abandoning its intentions to construct further nonunion facilities.

The most recent strike is indicative of a larger union power surge in the US. Following a seven-week strike, the United Auto Workers union secured unprecedented assurances from the Big Three manufacturers almost precisely one year ago.

In order to support their firms while they were heading into bankruptcy and government bailouts, the UAW made concessions, such as giving up conventional pensions. However, at a period of prosperity, robust sales, and rising income and profits, Boeing insisted on the concessions.

Holden made reference to the loss of the pension schemes on Thursday night, saying, “I know that many members haven’t healed from that wound.”

“Not only are the Boeing employees using their current power to their advantage, but they are also taking historical precedent into consideration,” said Sharon Block, the executive director of the Harvard Law School’s Center for Labor and a Just Economy. This union previously approved concessionary contracts when the business was struggling. Additionally, the corporation moved operations out of state to avoid the union in this particular case.