Does Boeing's Engineering Union Have A Death-Wish?
Sigmund Freud, the father of psychoanalysis, believed that all human beings have an urge to self-destruction that competes with their instinct to survive and prosper. The notion of an innate death-wish has fallen out of favor, but every once in a while you encounter people whose behavior is so contrary to their own interests that it makes Freud's concept sound plausible. So it is with the union representing engineers at Boeing's sprawling aircraft complex around Seattle. Having failed to learn the lesson of past labor actions, it is pressing Boeing for concessions that will force the company to accelerate the movement of jobs away from the Puget Sound region.
That's what happened a few years back when machinists struck the company on the eve of the worst recession in many decades. By the time they returned to work, Boeing management was determined to follow the lead of rival Airbus in diversifying the locations where it assembled planes. Boeing now builds its revolutionary 787 Dreamliner in both South Carolina and Washington, and the machinists realize they will have to be more flexible if they do not want to see a further hemorrhaging of touch-labor jobs out of the Seattle area.
The Society of Professional Engineering Employees in Aerospace (SPEEA) still doesn't get it though -- at least, not the union brass who are currently deadlocked with Boeing negotiators over pay, pensions and medical plans. The company is offering engineers 4% annual increases over the next four years, on top of the previous 5% increases that raised their average wage to $109,000 per year. Technical workers would see their average wage of $81,000 grow 3% annually. However, Boeing reps are adamant that new hires shift to the same kind of defined-contribution pension plan that everybody else in the private sector now has, and want to implement other changes necessary to keep the company competitive.
Boeing has good reason to worry about competitiveness, despite the fact that it builds the safest, most reliable jetliners in the world. Over the last two decades, its heavily subsidized European rival has reduced the company's share of the global jetliner market from 85% to barely 50%, and now countries like Canada and China are entering the market as competitors. If Boeing wants to remain America's biggest exporter, it will have to perform engineering and assembly of its products wherever efficiency can be maximized. It probably won't move work offshore the way Airbus has, but there are plenty of places in the U.S. where it could conduct business more cheaply than Puget Sound -- as the South Carolina plant illustrates.
The response of the engineering union to company concerns has been to behave like bit players is some 1930s Hollywood melodrama about labor organizing. SPEEA representatives pound the table, refuse to yield, and threaten to damage Boeing's business. Such behavior is deeply destructive to the interests of their members, because they will end up convincing management to start migrating engineering jobs to other, cheaper places. Instead of posturing for public display, the union should reflect on the fate of other industries where labor refused to acknowledge how conditions have changed in a globalized economy -- industries like autos and steel that are now mere shadows of their former might.
The truth of the matter is that even without the annual pay increases Boeing is offering, its engineers have a good deal compared to their counterparts elsewhere. They shouldn't let myopic representation at the bargaining table put that in jeopardy -- along with the nation's trade balance.
