There's a striking parallel between what's going on at the Boeing plant in Everett, Wash., and the meltdown in the auto industry in Detroit. For decades, GM, Ford and Chrysler negotiated with unions for high pay, including near-full pay to laid-off workers, and fringe and retirement benefits that ultimately burned a hole in their profits.
Meanwhile, Japanese and European car manufacturers built state-of-the-art plants in right-to-work states, and had no problem attracting American workers at reasonable wages. Now the Big Three are asking for government bailouts, after failing to understand that car buyers wanted fuel efficiency, high quality and value for their dollar. …
Manufacturing is all about efficiency, and that doesn't mean that outsourcing high-paying make-work has to result in inferior work, as Boeing engineers claim. Japanese automakers have figured that out, and their assembly lines are humming. Which is more than 27,000 idle Boeing union members can say.
Boeing undercut the value of its shares when it could have settled on a similar deal a month ago. During most negotiations management knows how far it is willing to go, but holds out hoping labor will back down. In this case, that did not happen.
While Boeing management has been fiddling around, the company's stock has dropped to $42, near a 52-week low, and down from a period high of almost $99. Boeing faces angry customers, many of whom are asking for compensation for planes that will be late.
Boeing let labor shut it down while the economy went to hell in a hand-basket and its rival Airbus took whatever advantage of that it could. Boeing has a huge back-order of planes. Giving into the union would not have cost it much in profits. It has too many sales to fulfill.
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