Why machinists decided to strike Boeing

By Joseph Weber

updated 5:03 p.m. ET Sept. 8, 2008

When a stunning 87 percent of Boeing machinists voted on Sept. 3 to go on strike, second-guessers wondered whether these skilled plane builders had a few screws loose. After all, management was offering wage hikes that would top 11 percent over three years and bonuses of more than $5,000. Boeing was even offering to hike its traditional pension payments, rather than scrap them, as the company first proposed.

"You guys are crazy!" wrote one reader on a BusinessWeek.com message board. "Those numbers are great. Most people would die to get those raises in the midst of an economic slowdown."

Yet most of the 27,000 members of the International Association of Machinists are hopping mad about the contract offer Boeing dealt them last week. Many are even angry at their union leaders for putting off the strike for two days, upset that the leaders agreed to sit down with management and a federal mediator to try to resolve a contract before Friday night, Sept. 5.

After marching by the hundreds — as many as 7,000 workers gathered at one location in Everett, Wash. — to vote down the proposed pact and walk off the job, they shouted "sellout" when union leaders accepted the delay. Union leaders were hard-pressed to argue that they may yet come to terms on a deal that would make the members happy.

What has these workers so riled up? Blame a contentious union-management history, and executive suite turnover that has led to costly strategic blunders. Throw in some job outsourcing and a bit of the trend that's swept across Corporate America to cut benefits and push costs for medical care onto workers.

Add to that a sense that there may be no better time to grab a piece of the pie: Boeing's hefty backlog of plane orders has prospects at the company looking brighter than they have in years, and the company is racking up impressive profits, which the union says should be shared more with workers.

Holding the line
The result is a surprising recipe for an explosion of deeply felt anger. "We're fed up," says Russell Wise, a mechanic and team leader who is helping to build the company's new Dreamliner 787. "We're frustrated."

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Indeed, while unions are in retreat in much of the rest of old-line industry — from carmakers to washing-machine producers — the angry Boeing workers believe they're in a position to hold the line. They're determined to keep the benefits they've won over the years and do even better, IAM members say. They've struck six times at Boeing since World War II, and are very happy to do it again.

The immediate cause of the unionist rage? So-called "givebacks" in the company's contract offer. While Boeing is willing to give the union respectable wage hikes — equaling 5 percent in the first year and 3 percent in each of the following two years, it is demanding that workers pick up more of the tab for their health-care costs. Some workers argue that a few visits to the hospital would instantly eat up any wage gains.

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