Employer Strategies In A Changing Slow-Growth Economy – Dealing With Organized Labor: The Boeing Blueprint

by FordHarrison
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How are U.S. employers approaching the economic "recovery" from the recession and what strategies are being employed by them, particularly in relation to unionized workforces?  

Boeing Company's recent – and successful – manipulation of bargaining table "leverage politics" presents at least a partial answer as well as a fascinating case study.  The company's negotiations with its local Puget Sound, Washington-based District 751 of the International Association of Machinists ("IAM") and the District's International parent may very well signal a present-day shift in collective bargaining strategies and tactics from both sides of the table. This shift, at least in Boeing's case, is based upon a number of key factors.  These include: 

  • The perceived snail's pace of economic recovery from the 2007-09 U.S. recession;
  • The resulting job security issues extant with the U.S. workforce in general and Boeing workers in particular;
  • The age-composition of Boeing's production workforce (almost evenly divided between those both under and over the age of 50);
  • Market-share competitive issues with its chief global rival, European-based Airbus Industries;
  • Boeing's overarching desire to achieve a smooth (and strike-free) launch and entry into service ("EIS") of its new-technology 777X – the aircraft on which purportedly rests Boeing's future success for decades to come; and last but by no means least,
  • The reversal of what Boeing arguably views as a decades-long string of frustrating disappointments in collective bargaining with its militant, strike-prone Puget Sound local union.   

Accordingly, and although in the midst of recent and quite favorable production and stock market successes, Boeing – in examining both its past and its future – took a counterintuitive approach in negotiating strategies with its 2013 IAM "re-opener" negotiations involving the future production of the 777X. 

Those negotiations, taking place last November and December, resulted in widespread fallout on a number of fronts:  they firmly established a generational wedge between younger and older Boeing workers; fractured the bond (if one ever existed) between the Washington state local of the IAM and its international parent; drove the Washington state legislature – at Boeing's behest – to pass the largest ($8.7 billion) tax relief package for any employer in U.S. history; and finally – after two wildly divergent ratification votes – resulted in what is likely the most favorable contract in Boeing's 77 year+ strike-marred history with the IAM. 

How did Boeing manage to achieve these results?  The absorbing details surrounding this chapter on the exercise of labor leverage – and what it can mean in the negotiating process  – are discussed in detail in the whitepaper Employer Strategies in a Changing Slow-Growth Economy; Dealing with Organized Labor: The Boeing Blueprintwhich explores the events as they unfolded. 
 

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