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Published: Friday, January 25, 2013, 12:01 a.m.

Strike would be costly for Boeing and SPEEA

With the contract vote looming, Boeing and the union are counting on being the side that knows its workers best.

EVERETT -- Who knows the Boeing Co.'s 22,950 engineers and technical workers better: the company or union officials?
That's an essential question to be resolved when members of the Society of Professional Engineering Employees in Aerospace vote on the company's contract.
SPEEA negotiators are urging members to reject Boeing's offer and to give them the OK to call a strike, if necessary. The union's major beef is that the offer does away with the defined pension plan for new workers. But the union's council of elected representatives decided this week that it needed extra time to understand the negotiating team's rationale.
Boeing officials hope engineers and technical workers will ratify the new deal quickly so they can focus on fixing the company's troubled 787, which was grounded by the Federal Aviation Administration last week. Engineering leaders held a webcast this week to explain the company's position.
"We'd like to see members ratify this as quickly as possible," Doug Alder, a spokesman for Boeing, said this week.
Boeing and the union won't know which one has judged the members correctly until mid-February, when SPEEA is expected to tally votes.
SPEEA had members' backing last fall when negotiators recommended they reject Boeing's first offer. Ninety-six percent of the engineers and technical workers who voted turned down Boeing's proposal. At the time, Jim McNerney, Boeing's chief executive in Chicago, expressed confidence that the contract would be resolved "within weeks."
But the union's history of predicting what union members will do isn't spotless, either. In 2000, SPEEA negotiators recommended members accept the company's final offer, calling Boeing concessions concerning weekend hours and the preservation of retiree health care a "partial success."
SPEEA's council declined to make a recommendation on that offer, and engineers and technical workers went on strike that year.
So if there is another strike, what are the economic implications? The stakes are high for Boeing and union members.
John Monroe, chief operating officer for Economic Alliance Snohomish County, was still working at Boeing during the 2000 strike. He doubts that a SPEEA strike would have a significant, long-lasting impact for the county.
"You might see a small reduction in discretionary spending," he said. But "they're still going to make house payments and buy groceries."
The 7,799 engineers who work at Boeing's plant in Everett would lose an average of $2,158 in wages per week during a strike. The Everett site has 3,885 technical workers. The average technical worker would lose about $1,478 in pay each week during a strike. Altogether, SPEEA members in Everett would be down about $22.6 million each week in lost wages.
On Thursday, Everett Mayor Ray Stephanson was hopeful that Boeing and SPEEA could resolve their differences. But he expressed concern about the possibility of a long-term interruption in production at Boeing's Everett site, where 747, 767, 777 and 787 jets are built.
"It would be a disservice to the community to have a long-term strike," Stephanson said.
And there could be other fallout, not necessarily economic.
"I don't think it's going to help the relationship" between the union and Boeing, Monroe said.
He likened a strike to a legal separation between spouses. The couple might rekindle the relationship, but it wouldn't be easy.
Monroe is skeptical, though, about a strike spurring Boeing to move engineering work elsewhere, at least not to the extent it did when the company opened a second 787 production line in South Carolina following a Machinists union strike in 2008.
"Boeing has demonstrated they can go to South Carolina and they can get quality airplanes delivered," Monroe said. "I don't think I have the same level of confidence with Boeing starting up an engineering center there and getting the same skill level we have here."
The Machinists strike in 2008 was estimated to cost Boeing $100 million each day in penalties and lost sales. A local economist estimated the strike took about $100 million per month out of the Snohomish County economy, because of the cut in paychecks.
The Machinists walked out before the housing market's collapse and stock market crash. Over the 57-day strike, Boeing's shares plummeted more than $20, from $62.89 to $42.36. The day a resolution was announced, Boeing's stock rose 15 percent in a day.
An engineers strike would have different repercussions. Machinists would continue building jets, which Boeing might not be able to deliver on time because the company needs FAA-approved engineering representatives, who are Boeing employees and SPEEA members, to sign off on deliveries. SPEEA Executive Director Ray Goforth says the company has about 1,500 of these representatives who can clear deliveries.
Meanwhile, Goforth has said that Boeing's corporate leaders have a "real delusional level of denial" when they downplay the role SPEEA members will play in resolving the company's 787 troubles.
But Monroe, the former Boeing executive, wonders whether SPEEA members' pride in the 787 might win out over loyalty to the union. Many engineers spent thousands of hours designing the Dreamliner, seeing the jet through initial development woes and into commercial service. The engineers are proud of their contributions to the program, Monroe said.
"To not be part of the solution" during a strike, he said, "I would feel very bad about that."
Michelle Dunlop: 425-339-3454; mdunlop@heraldnet.com.
Story tags » 787ManagementLabor disputeStrikeSPEEA

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