Boeing faces new world as strike comes to end

Boeing halted all commercial airplane production after the Machinists in Washington state, Oregon and Kansas walked off the job Sept. 5.

Boeing usually gets paid upon delivery, so the stoppage cost the company about $100 million in lost revenue a day. The walkout also has further delayed the new 787 Dreamliner, which already is at least 15 months behind schedule and was supposed to fly for the first time in November.

Labor experts believe the strike has strengthened the Machinists and also puts the company’s engineering union, SPEEA, in a good position as negotiations for its own contract get under way this week. “Broadly, this gives a shot in the arm to labor,’’ said labor expert Philip Dine, author of "State of the Unions."

“This was a strike that was highly watched by labor and industry,’’ Dine said. “They both win by ending it. Both sides took a stand, and both sides came out fairly well. They ended it without waving the white flag of surrender.”

According to a union statement, the deal provides total wage increases of 15 percent over the 4-year life of the contract, compared with a total of 11 percent over three years in Boeing’s last pre-strike offer.

It includes bonuses over the first three years of the contract, pension increases and the preservation of current medical benefits — an issue Boeing had sought to change.

The pact also strengthens provisions for the union to bid against subcontractors for work and includes agreements to protect jobs held by workers such as forklift drivers and to limit vendor deliveries to the shop floor.

But analysts say whatever gains the union made could end up being short-lived.

Respected aerospace analyst Richard Aboulafia of the Teal Group says the strike could result in Boeing moving future airplane production away from the Seattle area, where the company's planes are still assembled.

“It’s easier to train flexible workers than it is to work with experienced but inflexible trained workers,’’ said Aboulafia.

He predicts that over the next 10 years, Boeing’s commercial airplane division will move to Southern states with weaker unions and right-to-work laws that diminish union power. This move, he says, will likely happen in phases, with new programs such as 737-X and 777-X established elsewhere and the 787 line shifting to a new location.

The company will continue to outsource much of the production of airframes and other components to factories abroad or in right-to-work states.

The Machinists, he said, apparently calculated that "the short-term gains were more important than the long-term loss."

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