Boeing, union and a tragic fate

The Wenatchee WorldNovember 24, 2013 

It reads like a classic tragedy. The characters are doomed, pushed toward their inevitable ignominious fate by their very nature - their instinct, desires, prejudice and frailty. They can’t help themselves. They do what they do because they must, even if it brings their own destruction. Everybody can see it coming.

Circumstance and fate steer all to the climactic crash. The Boeing Machinists would do almost anything to defend what they achieved in years of collective struggle. The corporate planners and risk managers would project far-off profit. They sought a bottom line 10 or 20 years out. They had to fix more precisely the future expense of building a modern airplane. How can you do that, relying on risky investments to fund 25 years of pension payments for tens of thousands of workers? In their world, you cannot.

The company offered to build its new, hot-selling 777X airliner in the Puget Sound region, if the machinist union would accept an eight-year contract extension beyond 2016, which brought an end to fixed-benefit pensions for new hires. Risky pensions would be replaced with a 401(k) kind of plan, partly funded by sizable, but predictable, company contributions. Accept, and it would mean perhaps 50,000 jobs, direct and indirect, paying an enviable, livable, dignified middle-class wage.

The union voted the offer down, by 2-1, overwhelming and emphatic. The most surprising result was that so many people were surprised.

We have seen over and over again that unions and their workers will go far not to give up what they have worked to obtain, even if it means lost jobs and members, even if it puts their employer at risk. This time, with the company demanding the concessions making record profit, there was even less incentive to give up anything, even a decade in the future.

I can’t blame the Machinists. It is not in their nature to do otherwise.

"By turning down Boeing’s lopsided proposal the Machinists stood up to defend the middle class and they stood up to defend the standard of living in our communities," wrote Jeffrey Johnson, president of the Washington State Labor Council, in a Seattle Times op-ed. "... It would have been unthinkable for grandparents or parents to sell out younger workers and future workers, many of whom are sons and daughters or nieces and nephews, and prevent them from earning a secure retirement future," he said.

Yes, except by standing up to defend pensions for future workers they made it less likely there will be future workers. By defending the future workers’ "secure retirement future," they made it more likely there won’t be workers to retire. At least, not here.

That’s the tragedy. The middle class of Washington has been defended, what’s left of it.

Outside the union hall and the corporate boardroom perspectives change. A Stewart Elway poll found that by a margin of 56 to 31 percent the people of Washington would have voted for the contract had they been a Machinist. Two-thirds of voters said the Legislature’s $8 billion in tax incentive deal, the largest of its kind, was a wise offer.

In Olympia, the state’s Treasurer Jim McIntire said the loss of the 777X will bring a downgrade in the state’s credit rating, increase the cost of capital, and add "a couple of hundred million dollars" to the future cost of public debt.

The economic blow is real. The fight for security brings insecurity. "It is a disaster," wrote Seattle Times editorial columnist Bruce Ramsey.

Boeing is collecting offers from states drooling over future jobs. Perhaps the union and its defenders are right, and Boeing will see the wisdom of building its aircraft in this state, where people know how, and return to bargain. I hope so. But a bargain won’t be possible unless the characters can change. Otherwise, the tragedy plays out.

Tracy Warner is a Wenatchee World columnist. Email him at warner@wenatcheeworld.com.

 

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