Boeing Machinists Revive Dispute Over Labor Contract

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The January 3 vote over a proposed contract extension held at the District 751 Lodge of Boeing’s (NYSE:BA) largest machinist union in Washington state divided the International Association of Machinists and Aerospace Workers. After an initial eight-year contract extension was voted down by a large majority of local union members last November, the company reworked the offer to address some of the union’s grievances — backing away from its attempts to slow the pay scale rate of machinists — and last Friday, by a narrow margin of 600 ballets, the revised contract was accepted. Had the story ended there, that vote would have ensured that production of key components for the redesigned 777X would have remained in Washington state, the jet manufacturer’s traditional manufacturing base. But the story is not over; eight unfair labor practices charges have been filed with the National Labor Relations Board by angry Boeing machinists.

These complaints allege that the union’s top leaders manipulated the January 3 vote, as Reuters reported Wednesday. The Boeing machinists who filed charges against the International Association of Machinists and Aerospace Workers demand that the ballots be recast, and the NLRB has launched an investigation, as Anne Pomerantz, an attorney with the NLRB regional office in Seattle, told the publication. The labor board will interview both sides to determine if there is any evidence to support the claim that union leaders did not provide fair representation, she added. If proof that international leaders acted in a discriminatory or arbitrary manner is found, the NLRB General Counsel could file a complaint.

According to Jeffrey Hirsch, a former NLRB lawyer, the complaints must show not that the election could have been handled better, but that the actions of the international leaders were arbitrary or made in bad faith. “A lower turnout doesn’t necessarily mean people were disenfranchised,” Hirsch told the publication.

If the the final assembly of the 777X — a crucial component in the company’s fight against Airbus (EADSY.PK) for dominance in the long-range, twin engine market — and construction of its fuselage is located in the Puget Sound area, local machinist would secure an estimated 20 years of work. Plus, the new version of the popular long-haul get, due for delivery in 2020, will likely be the last major new jet constructed by Boeing for fifteen years. But because the contract would have terminated union’s pension plans after 2016, local union leadership deemed those giveaways too harsh to to accept. International leaders did not agree. The difference in opinion between local and national leaders is unusual, but it likely arose because the international union is more concerned with keeping dues-paying members than it is evaluating the contract’s terms, as experts in union politics have suggested.

“The theory that this is a way to preserve IAM jobs (and therefore membership) of IAM’s largest District certainly seems plausible,” as Leeham Co aviation analyst told Bloomberg via email. “I certainly can’t think of another reason, and I’m sure International is hardly altruistic.” Now what is at issue is whether the vote was fair. As Pomerantz told Reuters, union members claim that their international leaders scheduled the vote for a day when a majority of members were still away on holiday vacations, an action that “disenfranchised” those machinists. An even greater complaint is that union leaders held the vote despite objections from leaders of the local district, who saw the revised proposal as too similar to the original November offer. “All the charges we have seen are against the international, not Boeing,” Pomerantz said.

The tenor of those calling the vote unfair can be summarized by the commentary of Robley Evans, a local union steward and Boeing employee who filed one of the eight unfair labor practice charges. “We were not fairly represented by the international,” he told Reuters. “When you have a vote that was razor thin and you influence it like that. It changed the election in my opinion.” The international leadership did indeed speak out in favor of the Boeing contract. In a letter dated December 26, International Association of Machinists and Aerospace Workers President R. Thomas Buffenbarger urged Washington machinists to be aware that Boeing’s solicitation of bids from other states was not a “fake” play. Leaders of District 751 were not involved in the filing of the charges; as District 751 spokesman Bryan Corliss told the publication, “this is all being member-driven.”

In a rebuttal of machinists’ claims, Buffenbarger told Reuters that voters were given every opportunity to vote, noting that even those away on vacation could have made use of electronic absentee ballots. “This contract vote was probably as accessible to everyone in that bargaining unit as any I’ve ever seen,” he said in an interview with the publication. Furthermore, he believes the voter fraud was highly unlikely because ballots were counted in union halls “in eyesight of everyone who wanted to watch.”

Union conflict is by no means new to the Puget Sound area, and the reality has guided many production and management decisions made by Boeing in recent years. The first city-wide general strike in the United States took place in Seattle in 1919; and, Boeing machinists have gone on strike four times in past 25 years, closing down production in Seattle-area plants for a total of 200 days. To limit its dependence on the Seattle region, Boeing moved its headquarters to Chicago in 2001 and opened a 787 production line in South Carolina in 2011.

That facility is the first final assembly plant for jets manned by nonunion workers. Since South Carolina is a right-to-work state, legislation prohibits agreements that govern the extent to which a union can require employees’ membership. Earlier in the company’s vetting process of possible locations for 777X production, South Carolina was rumored to be under consideration, a possibility that was taken by the union as a sign Boeing wanted to cut back on its labor expenses and cut union jobs. After the initial proposal was rejected, Boeing received bids from 22 states wanting to house a Boeing factory. Fear that the jet manufacturer would take the new widebody aircraft and its new carbon-composite wing factory to a right-to-work state gave Boeing some leverage with its Washington workforce.

If “the 777X was not built in the region, it would have been a big hit to Seattle,” Roque Deherrera, a business advocate at Seattle’s Office of Economic Development, told Reuters. Last year, Washington’s aerospace industry generated $76 billion in economic activity last year, with the 777 injecting $20 billion into the economy and contributing 56,000 jobs.

If votes are not recounted, Boeing is expected to go forward with its plans to locate key production lines of the 777X in the Puget Sound area, a region it helped develop. But any appeal of the January 3 vote could take up to three years or more, and by the time the issue is resolved Boeing will have built the needed factory. Still, machinists have lodged successful complaints against Boeing before. When the company built the 787 assembly line in South Carolina, the NLRB filed a complaint in 2011, claiming that the move was made in retaliation against the machinists for striking.

The case went to court, but Boeing settled the dispute by striking a deal with machinists to extend their contract until 2016, which kept work on the 737 jet in the Puget Sound region. No charges have been filed against Boeing, and company spokesperson Doug Alder noted that the manufacturer has “no authority over the voting process or scheduling.”

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