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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, October 7, 2008 McNerney: Strikes hurt Boeing's standing By Michelle Dunlop Herald Writer EVERETT -- The Machinists' strike has hurt the Boeing Co.'s reputation and threatens the nation's aerospace industry with a fate similar to that of automakers in Detroit, the company's chief executive said Monday. "While we've disappointed customers for other reasons in recent years, too, we believe this track record of repeated union work stoppages is earning us a reputation as an unreliable supplier to our customers, who ultimately provide job security by buying our airplanes," wrote Boeing's Jim McNerney, in a memo to employees. McNerney told employees that the company wants the Machinists' strike to end but remained firm that Boeing needs to be able to outsource to be competitive in the market. Job security has been at the top of the union's list of demands in trying to negotiate a three-year labor deal with Boeing. No new contract talks have been scheduled 31 days into the strike. McNerney noted that Machinists' leaders have recommended strikes four times, shutting down Boeing's commercial aircraft assembly plants three times in the past 13 years. About 27,000 Machinists -- most in the Puget Sound region -- closed Boeing's commercial jet factories by walking off the job Sept. 6. Union leaders urged members to reject Boeing's contract, saying Boeing's offer fell short in the areas of job security, wages, health care and pension. "The IAM is not on strike to harm Boeing or its customers," said Mark Blondin, Machinists' aerospace coordinator. "However, we are on strike and our members have made it clear that protection of IAM jobs and the scope of IAM work is critical to getting a ratified agreement." Some of the "other reasons" noted by McNerney for delivery delays are the result of outsourcing, especially pre-strike foul-ups by subcontractors who have postponed testing and production of the new 787 jetliner. Boeing is already 15 months behind schedule on the 787. The Machinists' Blondin acknowledged that some outsourcing is "necessary for sales" but said the union seeks guarantees for positions that historically have been performed by the Machinists. But "we also know that there is a vast amount of outsourced work ... that could been done more efficiently and less costly in house by the IAM," Blondin said. Besides increasingly tight competition from Airbus, "other nations -- including Russia, Japan, Canada and Brazil -- either already produce or are developing the capability to produce airliners that approach the size of Boeing's smallest and best-selling 737," McNerney noted. Airbus' parent company, EADS partnered with Northrop Grumman to compete against Boeing for an U.S. Air Force tanker contract, proposing to build tankers in Alabama. That would allow Airbus "to establish a beachhead for producing commercial airplanes in the United States -- and in a very low-cost location, too," McNerney wrote. Boeing stock plunged to a four-year low of $47.92 Monday in the widespread market sell-off before closing at $51.29. The Associated Press contributed to this story. READER COMMENTS Log in or register to post new comment | Log out REBUTTAL LETTER TO JIM McNERNEY Dear Mr. McNerney, You sure are an elegant and articulate man. You bluebloods definitely have command of the English language; it serves you well in the world of boardrooms, country clubs and vague e-mail threats. You have the chance to be The Decider and bring us together, yet you choose to follow “Neutron Jack” (your god of shareholder value) and his ruthless management style to further stake your claim as the ultimate leader. Break free of the GE way Jim. You don’t have to lose a piece of your soul for the sake of a few “Champions” and “Master Black Belts” in your hierarchy. Don’t be fighter, be a unifier (that goes for the union also). Please don’t experiment with our iconic company and leave it in ruins as you ride off into the sunset with your Drew Rosenhaus-esque retirement contract. Jim, the following are my counterpoints to your memo. Repeated union work stoppages Seriously…Jim, your reputation is shot already. Do I need to remind you of your crying game to the WTO, the federal and the local governments, not to mention, all your bloated and late programs, including your innovative 787 (I’ll give you that) and blaming your collaborators for its’ problems. Enough said. Detroit and it’s failings Jim, what do you mean with this argument: that cheaper labor sells more cars, thereby boosting profits? Well, I contend that well made cars sells better. Hey! Wait; you’re right, the Airbus KC-45 is cheaper and a better multi role tanker transport to boot. Wow! Oh, that’s right, Airbus is subsidized. Come on Jim… they get low interest loans, while you get direct and indirect subsidies! Cut a deal with them Jim, then worry about the third parties. Long term competitiveness Jim, maybe you should have thought of this before transferring the technology and the logistics of building a complicated machine to your future competitors and setting up the supply chain for them also! Too kind: if you ask me. Jim, it is not our wages and benefits which causes you to lose competitiveness, it’s your vision of the one world economy (or lack of) business model that you bet your house on. Oh…and don’t get me started on you and your cronies selling out America for a buck while at the same time dumbing us down to think it is labor cost and the unions cutting into America’s competitiveness. Jim, cutting the labor cost of our rich aerospace heritage is like cutting your Comcast bill, but, ending up paying more on Netflix. A beachhead in Alabama A nice metaphor Jim: You held them off for now, but, your pillbox is being surrounded as I write. Your predecessors really messed that one up didn’t they? They could have established their own beachhead against legacy costs with a dual line 787 plant instead of politicking for a reduced tax rate, However, they were spoiled by an effective tax rate of what?... 0.7% for awhile weren’t they; and now your stuck with a rate of 33.7%.....ouch! I’m sure your army of lawyers and lobbyists are working on it though. The issue of competitiveness is a big deal Jim, I have several ideas on this one. Let’s start by not having your top guys and gals be ethically challenged (sorry, that was before your time), but, I know your working on changing Boeing’s corporate culture. Let’s see….you should give the Air Force what they want, don’t **** off influential senators (although it helped that you gave his boss a $700 million dollar gift),don’t threaten our government with line shutdowns, try not to be late on programs and writing off millions of dollars, and, you should drop programs that you are not good at, like, connexions and SBInet, however, you should take those lessons learned and integrate them (I know, you think you are a great integrator, but the jury is still out on that) into the future combat systems. Finally, you could hope for a favorable dollar exchange rate and higher fuel prices to sell your new fuel sipping plane, that is, if your point to point argument is correct going forward. Sir, history and the stake in our future will be well served , if you and your counterparts on Wall street would look in the mirror and see the witch with an apple, see the light, and lead us into a socially responsible capitalistic society, after all capitalism is still evolving. 300 million plus people are counting on you to do your part. As for us (the working class), we are going to do our part by voting for Obama. Regards, A UNION WORKER David Bridgman | Oct 7, 2008 10:45 pm | 0 replies | View all | Post reply | Request removal Say again? It's deeply amusing and infuriating to me as a striking IAM member to see the CEO talking about how outsourcing is required to "Maintain competitiveness in the global market place" when it's obviously done SO much good as a business model for the 787. He then goes on to say that we need to fear other markets taking hold while striking IAM members allow boeing to fall behind in schedule and planning. It's funny how now it's the UNIONS fault all of the sudden that we're on strike. Last time I checked, we weren't striking when the 787 got delayed all three times. Perhaps if they had kept the work here in Washington where competent IAM workers were able to do the jobs they were already trained to do instead of outsourcing the jobs to ten plus countries to incompetent workers that not only cause defects in a already proven failed business model, but fuel the very same other countries that he's so worried about becoming competitors and simultaneously taking away American jobs and removing income from the state. The current economic woes are DIRECTLY tied into greedy people at companies like Boeing exactly like him. According to an article by the Seattle times, McNerneys total compensation for 2007 was 19 million dollars. That's over fifty THOUSAND dollars a day. There is NOTHING he or anyone can do that is worth nineteen million dollars, especially when So far at the very LEAST this strike so far has deferred, if not lost, at least three BILLION dollars so far from boeings pocket book. Maybe if the company had stopped trying to beat the dead horse of claiming that outsourcing is a good business model, they could have saved that money and given a contract that wasn't designed to screw the worker to feed the executive. None None | Oct 7, 2008 2:36 pm | 0 replies | View all | Post reply | Request removal

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