Members of Boeing’s Machinists union had the weight of the world on their shoulders when they voted on a new contract last week.
At least they carried the weight of the entire state of Washington. It wasn’t enough for those workers to calculate how the contract would affect their jobs, their retirements, their families, their fellow union members. They apparently also were supposed to preserve the future of the regional economy and the careers of a bunch of politicians.
All that responsibility fell on them because Boeing cast the contract extension as the only way to guarantee that the new generation 777X jetliner would be built here. Elected officials not wanting to “lose Boeing” on their watch urged a yes vote on a deal that included changes in retirement and health benefits.
The narrow approval, therefore, seems to assure that it will be built in Everett. And a composite wing that will be developed as part of the advanced plane will be placed in Washington state as well.
Certainly there are lots of positives in the contract — some job security, pretty hefty pay raises, a signing bonus. Commenters who say it is evidence of dwindling middle-class wages must confuse “dwindling” with wages rising faster than inflation. And even the change in retirement provisions from a fixed payment system to a 401(k)-like system isn’t as onerous as it has been portrayed.
Still, many Machinists — likely even many who voted yes — are bitter over the result. Many said they felt forced into the deal. Some used terms like economic blackmail, because Boeing claimed it could move the wing-fabrication and assembly to another state with other workers if the deal wasn’t approved.
But at the heart of most labor-management conflicts — at least in the private sector — is coercion, if not blackmail. If labor is strong enough, it can legitimately threaten to strike. If management is strong enough, it can legitimately threaten to lock out workers. In each scenario, the two sides make economic calculations to determine whether they stand to gain more than they lose by using the hammers rather than compromise.
When the Machinists have had the upper hand economically, when they’ve been able to enforce a strike, they have won generous pay and benefits. When Boeing had the upper hand, the results were less beneficial.
What makes this episode different — and disturbing — is that Boeing had outside help that made its threats more threatening. Politicians and taxpayers in at least 15 states had their thumbs on the scales to tip the balance toward management.
The economics of abandoning billions of dollars in infrastructure and a tremendously skilled workforce should have weighed against moving production elsewhere. When a similar contract was rejected by a 2-to-1 vote in November, the belief among many Machinists was that Boeing was bluffing, that it couldn’t afford to follow through on its threats.
Since then, however, state after state made offers to Boeing. Most, presumably, agreed to meet the company’s long list of demands that required governments and taxpayers to provide the land, the infrastructure, the factories and the training at little or no cost. Oh, and they weren’t allowed to collect much in the way of taxes should they win the plant.
Suddenly the math and the economics changed. With the help of taxpayers, Boeing could locate massive development and assembly operations anywhere. The Machinists might have had a chance in a one-on-one with Boeing. They didn’t stand a chance against Boeing and those 15 state governments and their taxpayers.
Financially, if not emotionally, the Machinists probably did all right. But we’re left with a financial system in which companies can play one state against another (or 15 others), as long as the companies are big enough. Giving that it played out so well for Boeing this time, expect the company to figure out a way to do it all again just as soon as it can.Peter Callaghan: 253-597-8657 peter.callaghan@ thenewstribune.com @CallaghanPeter