new york
CNN
—
At its core, the Boeing strike that began Friday is a story of what happens when stingy executives lose sight of the plan and it becomes up to workers to get everyone back on track.
Boeing didn’t make a profit last year. In fact, the plane maker has lost money every year since 2018, when a series of deadly and near-disaster crashes hit rock bottom for its reputation and finances. If Boeing were any other company, and half of the global duopoly hadn’t been debacle, it would almost certainly have declared bankruptcy.
Still, by 2023, CEOs with accounting backgrounds will see their salaries increase by 45% to nearly $33 million.
Meanwhile, wages for Boeing’s 33,000 union members have stagnated.
They are, quite simply, furious.
A combination of years of pent-up resentment over Boeing’s mismanagement, pandemic-era inflation and a resurgent labor movement made the strike inevitable.
Boeing has had a particularly difficult history between management and labor unions.
Richard Aboulafia, managing director at Aerodynamic Advisory, said past strikes – the last one in 2008 – “happened because one side wanted to destroy the other”, but in recent years the hostility has come more from management.
In 2014, CEO James McNerney incited tensions with rank-and-file workers when he said on an investor call that he was postponing his retirement because “my heart is still beating and I think people are scared.” McNerney later apologized, calling the comment a “bad joke,” but union members still remember it, Aboulafia said.
All of this presents early challenges — and opportunities — for Boeing’s new CEO, Kelly Ortberg, who took the job just five weeks ago.
Ortberg, a mechanical engineer with nearly 40 years of aerospace experience, has the unenviable task of undoing a decade of management mismanagement that prioritized efficiency over quality and destroyed the company’s relationships with union members, who make up about 20 percent of Boeing’s workforce.
A strike is hardly ideal for the new president, given that Boeing is facing multiple simultaneous crises, including multiple federal investigations into a door plug burst that nearly crippled it in January, two astronauts trapped in space awaiting rescue by Boeing rival SpaceX, a horde of angry customers and a stock price that has fallen 40% so far this year.
So far, though, Ortberg seems to have built some goodwill: He spent his first day on the job touring the factory floor in Renton, Washington, before announcing last month that he would be based out of the Seattle office, close to several factories and 2,300 miles from Boeing’s Virginia headquarters, which represents a departure from its roots.
Ahead of the strike, Ortberg urged workers not to strike, acknowledging their anger over contracts over the past two decades that have cut retirement and health care benefits.
“I think Ortberg was in a tough position when he came in,” said John Holden, who led negotiations for the International Union of Machinists. “It’s hard to make up for 16 years, and I think that was his position.”
Aboulafia, a harsh critic of Boeing management, said he was optimistic the strike could be ended “fairly quickly.”
“The previous management team was incredibly boring, unimaginative and only understood costs,” he says. “Now we have someone who understands what’s at stake.”
To outsiders, it may come as a surprise that the union rejected Boeing’s proposal, which included a 25 percent wage increase over four years.
Even union negotiators called the contract the best one Boeing had ever offered, but union members still demanded a 40% pay increase over the four-year life of the contract (not even close to what former CEO Dave Calhoun got in one year) and overwhelmingly rejected it.
Holden said it was hard to pinpoint one reason for the backlash, but noted workers want job security, more vacation time and higher wages to make up for years of inflation.
Much of the anger among rank-and-file workers stems from the company’s decision to build a non-union factory in South Carolina to handle some of its 787 Dreamliner production in 2011. In 2020, Boeing moved remaining Dreamliner production from its union factory in Washington state to South Carolina after demand for the plane plummeted due to the pandemic.
Members became further frustrated after the union accepted a series of concessions in 2011 and 2013, including the elimination of traditional pension plans, to force Boeing to abandon plans to build non-union factories.
The latest strike reflects a broader resurgence of union power in the U.S. Nearly a year ago, the United Auto Workers union won historic guarantees from the Big Three automakers after a seven-week strike.
The UAW made sacrifices, including abandoning its traditional pension plan, to help the company as it hurtled toward bankruptcy and a federal bailout, but Boeing asked for concessions at a time when the economy was booming, sales were strong and revenues and profits were growing.
“I know many of our members have still not recovered from that wound,” Holden said Thursday night about the pension cuts.
“Boeing workers are taking a hard line not just because of the power they have in the moment, but because of past experience,” said Sharon Block, executive director of the Center for Labor and a Fair Economy at Harvard Law School. “This is a union that agreed to preferential contracts in the past when the company was struggling. And this is a union that has seen the company move jobs out of state to get away from the union.”
