In these economically precarious times, it is difficult to imagine anyone getting a 13 percent raise, but that is exactly what Boeing machinists are demanding - and then some.
Tom Wroblewski, president of local District 751 of the International Association of Machinists and Aerospace Workers, asserted that Boeing will pay a price for not offering the union an acceptable contract and averting a strike. "Once you go out on strike, the price goes up," he said. So much for negotiating.
Boeing's final offer to the machinists was more than generous by almost any standard, including a 14 percent monthly pension increase, a 2008 lump-sum bonus worth about $3,900 on average, a generous new incentive-pay plan and other perks. All told, Boeing estimated the package was worth an additional $34,000 in extra compensation to the machinists over three years.
What if that increase is not sustainable to Boeing?
This month has seen some of the largest government bailouts of private companies in U.S. history. The machinists' unreasonable demands are setting Boeing up for a similar fate, should the company concede.
Boeing must act quickly if it is to remain competitive in a global market. John Tillman, CEO of the Illinois Policy Institute, compared Boeing's plight to that of General Motors, Ford and Chrysler in the 1980s.
"Boeing and its workers are at a crucial juncture; they compete in a global arena and whatever agreement they make must reflect that. If Boeing forgoes outsourcing, their fate will be sealed," Tillman said.
According to the Mackinac Center for Public Policy, between the years 2001 and 2006, manufacturing employment in right-to-work states declined 1.5 percent annually and 7.1 percent overall. In non-right-to-work states like Washington, manufacturing jobs declined 3 percent annually and 13.7 percent overall.
There is a right and wrong way to handle labor negotiations. Companies have a bottom line and must respect it. If Boeing machinists are not careful, they will bargain their jobs out of existence.
Evergreen Freedom Foundation