Machinsts Lodging Complaints Against Union and Now Boeing

Boeing Factory

Complaints of unfair labor practices began streaming in just days after member of Boeing’s (NYSE:BA) largest machinist union in Washington state voted on a proposed contract extension. The January 3 vote by members of the local District 751 Lodge 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 be located in Washington state, the jet manufacturer’s traditional manufacturing base.

But the story is not over; as of January 8, eight unfair labor practices charges had been filed by angry Boeing machinists with the National Labor Relations Board, alleging union leaders had manipulated the vote and demanding that ballots be recast. By January 9, a total of 20 complaints had been filed, with at least two making accusations against Boeing, as Anne Pomerantz, an attorney with the NLRB regional office in Seattle, told Reuters. Boeing spokesperson Doug Alder told the publication that the jet manufacturer had not received copies of the complaints, noting that, “Boeing followed all labor laws during negotiations and fully respected the rights of our employees.”

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. 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 indicated. “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.”

For local union members, what is at issue is the fairness of the vote. They 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 November offer.

In a rebuttal of machinists’ claims, International Association of Machinists and Aerospace Workers President R. Thomas 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 voter fraud was highly unlikely because ballots were counted in union halls “in eyesight of everyone who wanted to watch.”

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. 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 for the assembly of the new aircraft and production of its fuselage. Still, machinists have lodged successful complaints against Boeing before. When the company built the 787 assembly line in South Carolina, a right-to-work state, 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.

It is also important to remember that Boeing received bids for 22 other states anxious to be the home of the company’s latest factory. The NLRB has launched an investigation into the complaints, Pomerantz told Reuters. 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 an discriminatory or arbitrary manner is found, the NLRB General Counsel could file a complaint.

More From Wall St. Cheat Sheet:

Follow Meghan on Twitter @MFoley_WSCS

More from The Cheat Sheet