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As I argued last month, the Puget Sound area of Washington state was easily the best place, from a strictly economic point of view, for Boeing to build its new 777x jetliner. This was confirmed when, despite the rejection of  its union contract offer by a 2:1 margin and opening an auction for a new facility, Boeing came back to the union with a second contract offer (h/t New York Times). Yesterday, by a 51-49 margin, workers voted to accept the contract.

The new contract ends the company's pension plan in favor of a 401(k), although it does not "affect the pensions already accrued." This was unchanged from the previous offer. However, the company did make concessions on the time to raise to the top of a pay grade (6 years instead of the originally proposed 16) and by adding a second bonus payment, of $5,000, in 2020.

The closeness of the vote shows how difficult a decision this was. In addition, there was a rift between the international office of the Machinists' union, which all but openly supported the contract, and the local union, which quite openly opposed it. Though the workers had a good bargaining position, it's hard to negotiate with a gun to your head, and the company had also shown its willingness to do something stupid (from an economic point of view) when it put a production line for 787 in South Carolina rather than Washington.

So, yet another company ends a true pension plan, contributing to the coming retirement crisis. Washington state gets to set another record for the largest incentive package in U.S. history, although it is surely a violation of World Trade Organization subsidy rules, as was Boeing's 2003 package. And we see yet again the need to ban job piracy, which strengthens the kind of job blackmail we have seen in this case, like so many others.

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Comment Preferences

  •  Sad and important news (5+ / 0-)

    What won't people do these days to keep any almost-decent job.

  •  The vote was held (5+ / 0-)
    Recommended by:
    chuckvw, Powell, Naniboujou, Chi, Piren

    right at the end of the Boeing holiday break, when many senior employees would be on scheduled vacation. Local news stations are reporting turnout was about 10% lower than the November vote.

    So the contract was approved by about 600 votes, while about 3000 less workers voted on the contract compared to the previous offer.

    To be first in the soil, which erupts in the coil, of trees veins and grasses all brought to a boil. -- The Maxx

    by notrouble on Sat Jan 04, 2014 at 11:23:18 PM PST

  •  The malefactors of great wealth (10+ / 0-)

    don't just bust unions these days. They bust states.

    I don't really blame the machinists, but the next time they or the engineers negotiate a contract they can expect to lose more ground, and the state to be extorted for even more.

    It's like paying to get mugged.

    It always seems impossible until its done. -Nelson Mandela

    by chuckvw on Sat Jan 04, 2014 at 11:24:07 PM PST

    •  I can't begin to imagine how I would've voted :(. (8+ / 0-)

      It's easy to say from a distance that they should've opposed this on principle, but principle doesn't pay the mortgage and Washington State is not otherwise a manufacturing hub - I would be very nervous about my ability to find new work.

      But the workers extracted concessions.  Not huge concessions, but concessions, and that's something.

      "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

      by auron renouille on Sat Jan 04, 2014 at 11:48:56 PM PST

      [ Parent ]

    •  I do and for most of the reasons you mentioned. (3+ / 0-)
      Recommended by:
      PhilK, chuckvw, Piren

      Union so-called-leadership aside, they rolled over like the frightened little children they are.

      They accepted being raped and then apologized to their rapist, thus ensuring more of the same.

      I come at this from the position of a union member that has seen my and the other unions disintegrate into nothing more than corporate enforcers for the bosses.

      "Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress." - Frederick Douglass
      The union and its members allowed the bar to be lowered again and have shown their willingness to swallow more injustice.

      "Those who can make you believe absurdities can make you commit atrocities." - Voltaire

      by Greyhound on Sun Jan 05, 2014 at 01:42:38 AM PST

      [ Parent ]

      •  Where was Labor? (1+ / 0-)
        Recommended by:
        Piren

        Even their own international didn't support them. Where was Richard Trumka or James Hoffa? Washington's Democrats shrugged and turned away.

        It's a tough decision to make when you know that your "allies" will just tsk-tsk and move on after you've taken one for the cause.

        There's a lot of blame to go around. I don't think it should all fall on the rank and file who, lest we forget, had the most to lose.

        It always seems impossible until its done. -Nelson Mandela

        by chuckvw on Sun Jan 05, 2014 at 01:49:22 PM PST

        [ Parent ]

  •  As a Jet City resident (3+ / 0-)
    Recommended by:
    Powell, PhilK, Sparhawk

    ..I gotta say, while the labor and subsidy thing is less than stellar, this isn't North Carolina racing to the bottom.  Washington has been dancing with Boeing for longer than most people have been alive.  If post MD post Chicago Boeing can't make airplanes that work anymore, then we're screwed.  But loss of pension plans?  For better or worse, that's where most of American industry has gone -- and maybe we'll get a future where getting more than cat food is not based on lifetime corporate affiliation.  

    ...j'ai découvert que tout le malheur des hommes vient d'une seule chose, qui est de ne savoir pas demeurer en repos dans une chambre.

    by jessical on Sat Jan 04, 2014 at 11:41:21 PM PST

  •  I don't know how the federal gov't (2+ / 0-)
    Recommended by:
    johnny wurster, fat old man

    could draft a constitutional law that would ban job piracy between states.

    "let's talk about that"

    by VClib on Sun Jan 05, 2014 at 02:47:21 AM PST

    •  The usual suggestion (0+ / 0-)

      was to have Congress make a finding that job piracy affects interstate commerce, then use that as the basis for regulation.

      Cuno v. Daimler-Chrysler showed that the courts have some sympathy for that claim on its merits (plaintiffs won at appeals court level, on an even broader issue), but whether it would stand up legally, you'd have to ask a lawyer (I'd start with Peter Enrich, the plaintiffs' attorney).

      The problem in Congress is that while there is bipartisan opposition to subsidies, there is also bipartisan support, and states reflexively don't want to give up any of their perceived powers, even if it costs them unnecessary billions of dollars.

      •  Given the plenary taxing power of the states (0+ / 0-)

        I think it would be a huge constitutional stretch to try and pass a law that stated that a state couldn't wave certain taxes as an incentive to companies to place facilities in their state. The state isn't impacting any federal taxes or revenues. These are exclusively state and local taxes and fee that are being forgiven. I don't think even the more liberal members of the SCOTUS would accept that it was an appropriate use of the Commerce Clause.

        I also agree with you that most members of Congress don't want to remove any local flexibility.

        "let's talk about that"

        by VClib on Sun Jan 05, 2014 at 03:15:00 PM PST

        [ Parent ]

  •  Not sure what can be done to stop it. (3+ / 0-)
    Recommended by:
    satrap, mndan, snoopydawg

    I used to work for a company that ended pensions long time ago in favor of 401k. Then later, ended paycheck 401k matches with yearly matches. Needless to say that this company 's union is almost non existent.
    Personally, I don't have anything against 401ks. My big issue with these types of contract is how senior management is completely exempt from the shit they force other workers to eat. They give themselves massive salaries, benefits and lifetime $$$, while forcing others to renounce theirs. This is no different than enslaving their own compatriots.
    I understand the need for companies to trim payroll. But It has to be across the board. Everyone needs to sacrifice, not just the few.
    I would have hated to see Boieng move work from a good state  to crazy Red States.

  •  It is time businesses stop calling their workers (1+ / 0-)
    Recommended by:
    nchristine

    expense liabilities. The workers are as much of an asset as the CEO. The CEO is the only worker who still gets to be an asset.

    Now they have the 2nd (safety net for sloppy) Amendment, and can't be infringed to actually treat their gun like a gun and not a video game controller.

    by 88kathy on Sun Jan 05, 2014 at 08:19:59 AM PST

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