Emboldened by the UAW and longshoreman unions, the machinists union is overplaying a weak hand.
Boeing Held Hostage
The Wall Street Journal comments The Machinists Take Boeing Hostage
Boeing on Friday said it will slash its workforce by 10%, or about 17,000 workers, in the coming months. It also announced $3 billion in charges related to its commercial jet program and $2 billion on its defense and space division, largely owing to delays caused by the work stoppage as well as higher costs.
Boeing has offered a 30% pay increase over four years, plus $9,360 a year in contributions to employee 401(k)s and lower healthcare premiums. But the union is refusing to settle for less than a 40% raise and restoration of the defined-benefit pensions that the company scrapped a decade ago.
The 62% pay increase recently won by East and Gulf Coast longshoremen may have emboldened the machinists to hold out for more. Boeing called off negotiations last week, saying the union made “non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business.” Union boss Jon Holden replied: “We’re in this for the long haul.”
The union’s demands would render Boeing less competitive against its commercial jet rival Airbus and U.S. defense contractors. That will mean less work for the machinists. Boeing may also try to lower costs and avoid future work disruptions by shifting more production to its plant in South Carolina, as it did after the 57-day machinists strike in 2008.
While the strike doesn’t have the same potential to shut down the U.S. economy as the longshoremen stoppage, it could have larger consequences for national security. The strike is delaying production of military jets, and the layoffs could reduce research and development on defense and space.
Boeing has made a lot of mistakes, but the answer isn’t to drive the company out of business.
Boeing has a quarterly net loss of $6 billion over troubled programs. Boeing will record a net loss of $9.97 a share for the quarter ending September 30. Analysts forecast a loss of $1.19 a share.
The Journal noted that before the machinist walkout, Boeing was burning more than $1 billion a month from its operations, as it slowed production to deal with quality issues that surfaced after a door panel blew out midair on a 737 MAX in January. \
S&P had estimated Boeing will burn $10 billion in cash this year. It put Boeing on its CreditWatch negative listing to signal an increased likelihood of a downgrade to junk status.
If defined benefit plans are indeed nonnegotiable, Boeing’s best response may very well be to shut the company down and let the workers plead for their jobs back.
Defined benefit pensions plans would bankrupt the company just as they bankrupt the trucking industry.
I am 100% in favor of Boeing moving all of production to a nonunion state.
Manufacturing Employment Is Not the Future, Nor Should We Try
On October 5, I commented Manufacturing Employment Is Not the Future, Nor Should We Try
The US is the global leader in technology, space, information, biotech, and innovation in general. That’s more than good enough.
I was primarily talking about clothes, washing machines, cars, and other things of no vital interest to national security.
Weapons and aircraft are in a different class. So is a nationwide port strike where the longshoreman union held the nation hostage. In those cases I would gladly bust the unions.
Instead, we have competing idiocy of Trump and Biden, both demanding US workers pay more and get less.
Buy American Provisions Cost $125,000 Per Job Created
Also consider Buy American Provisions Cost $125,000 Per Job Created
“Buy America” sounds great. But it’s costly and about to rise steeply.
I am 100% in favor of letting private unions go on strike except were there is an unnatural monopoly (PATCO and longshoresmen).
I am also in favor of letting companies pack up their bags and go wherever they want leaving the strikers without a job.
Since it costs money to move operations, things would be reasonably in balance, especially if we add national right to work laws which I am in favor of.
Related Posts
September 26: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 1: Trump vs Frederic Bastiat: Who Is Right About Tariffs?
This post is about Trump’s proposal to use tariffs to fund projects.
Tariffs and union power go hand in hand.
We need new slogans to celebrate. How about “You can get better, but you can’t pay more!”
Tariffs are a hugely regressive tax on the poor. If you are cheering Trump’s tariff plan as a solution to anything, you are really cheering higher taxes on those who spend every penny on food, clothes, and shelter.
I am 100% in favor of letting private unions go on strike except were there is an unnatural monopoly (PATCO and longshoresmen).
I am also in favor of letting companies pack up their bags and go wherever they want leaving the strikers without a job.
Since it costs money to move operations, things would be reasonably in balance especially if we add national right to work laws which I am in favor of.
A bit off-topic…I remember the Professional Air Traffic Controllers (PATCO) strike during the Reagan administration. Reagan said he would fire all of the controllers unless they came back to work. At the time, I read that the Soviet Union was closely monitoring the strike. They didn’t really have any interest in the actual strike of the controllers as it certainly would not affect the air-traffic of the Soviet Union. What they were keenly interested in was if Reagan, would in fact, keep his word and fire the controllers. The Soviet Union was stunned when he did fire them. At that moment, they knew that Reagan was a man to be reckoned with regarding his statements.
remember what carter did regarding the bailout? i think other pols remember. also carter wanted amerikans to sacrifice. so they sacrificed him.
At least he knew how to use a hammer better than Paul Pelosi.
No, Reaga was a neocon and a neoliberal
It’s the Economy Stupid.
Years ago, I saw a survey of businesses that had gone out of business. These are the top five reasons they gave for being driven out of business. And this in no particular order.
Labor Unions
Trial Lawyers
Taxes from all jurisdictions
Environmentalist
Government Regulators
All of these are accelerating and are pushed by Liberals AKA Democrats.
It is the, Death by a 1,000 cuts.
What chance do we have. Young voters are convinced that Socialism is the answer.
I see it as the problem. I know of no answer.
If Boeing is still currently paying back loans that they used for stock buybacks in the past; they are in essence still engaging in stock buybacks. I am still paying for the car I purchased with a loan several years ago even though the original transaction occurred earlier.
Any lack of R&D, Quality Control, or Management Efficacy that was defferred due to Misalocation of Funds due to Stock Buybacks, has Boeing still paying for those buybacks today.
I see Jack Welch written all over this through proxy of his Proteges.
I care about the workers who have had to shoulder the blame for the actions of others. Good wages are necessary for workers to keep their mind on their tasks, rather than worrying about the wolf at the door.
It is now impossible to stop inflation without destroying economic growth:
Interest rates shown in Figure 4 have risen sharply since 2020. Governments in many countries have raised debt levels, but this added debt has not resulted in a corresponding amount of goods and services being added. The problem is that the oil supply needed to produce these goods and services isn’t rising sufficiently. Instead, the added debt has tended to produce inflation.
Currently, politicians around the world want to add new programs (financed by debt) to help their economies out. If this new debt actually gets more oil out of the ground (through higher oil prices), it may be helpful. But, so far, the additional spending isn’t producing a corresponding amount of goods and services; instead, inflation is tending to stay rather high. This is a sign that limits on inexpensive-to-extract crude oil are being reached. With more inflation, interest rates on mortgages will remain stubbornly high, and economies will deteriorate.
https://ourfiniteworld.com/2024/10/14/oil-shortages-lead-to-hidden-conflicts-even-war/
Interest rate changes are being used to offset problems caused by too much or too little oil supply growth. See the charthttps://ourfiniteworld.com/2024/10/14/oil-shortages-lead-to-hidden-conflicts-even-war/
Yet another Union thinking that they have leverage they don’t have. Yet another Union Leadership promising workers thing’s that many will never see, but the Leaders all will. The leverage that they hold is there numbers, but they will keep decreasing with this veiled approach. Hence killing the Goose that Lays the Eggs, so to speak…
Sad to see and say, but this appears to be another money grab by the Leadership, at the lower rung Union Workers expense. We will see in the end, but a pattern of sorts, seems to have transpired as of late?
losers win by losing. hat tip the greatest trader of our lifetime, ed seykota.
“Boeing could solve all of its problems by producing the first battery powered jetliner” Jeff Green & Associates Green Fan Boy Club
You still haven’t answered my question. Coward. What will Permian production be in 12 months time?
To help you out, here are the Permian production numbers for the first 6 months of 2024. Odd that production isn’t crashing like you keep stating.
Jan: 5.978 mbpd
Feb: 6.158 mbpd
Mar: 6.152 mbpd
Apr: 6.157 mbpd
May: 6.179 mbpd
Jun: 6.187 mbpd
You better hope the Permian does not drop off in 12 months… because it’s about the only source of oil that is between us and total collapse of civilization
World crude oil extraction reached an all-time high of 84.6 million barrels per day in late 2018, and production hasn’t been able to regain that level since then.
https://ourfiniteworld.com/2024/09/11/crude-oil-extraction-may-be-well-past-peak/
Surely you must find this troubling … perhaps you believe that solar panels will save the day… and EVs?
https://i0.wp.com/ourfiniteworld.com/wp-content/uploads/2024/10/World-average-annual-increse-in-oil-supply-1930-to-2020-1.png?ssl=1
Lol! F*cking coward. Too afraid to give me your answer! Come on chicken sh*t. What’s your prediction for Permian production 12 months from now?
I’m not going to stop asking and I’m not going to stop calling you out for being the coward you are.
hahaha… big tough papadave… ‘build more pipelines and more oil will be created’ hahahahaha
Duh
Coward.
https://pgjonline.com/news/2024/october/matterhorn-pipeline-ramps-up-natural-gas-flow-lifts-waha-prices
Once upon a time I mistakenly stumbled into a presentation to senior managers at Lockheed (something to do with investing for retirement) at which the managers were asked whose stock they would rather own, Lockheed Martin, or Boeing. Every single one indicated they would rather own Boeing stock.
corporate men are not even real men. just drones. like bees. what a waste of a life.
“I am 100% in favor of Boeing moving all of production to a nonunion state.”
Are you sure you want to die?
Documentary on youtube exposes quality control issues on plant in that ‘nonunion state’. Search for: ‘Why Are Airlines Refusing 787s From Charleston S.C. Plant?’.
You can pay roughly half salary on plant in ‘nonunion state’, but you can get unmotivated workforce there that use chewing gum as adhesive material…
i lived in charleston when they landed boeing. i figured it was only a matter of time. that local workforce seemed so slipshod.
No weapons, no wars for the politicians!
“Tariffs are a hugely regressive tax on the poor.” This is largely incorrect because the consumer does not have to pay a tariff. Most tariffs are absorbed and paid in the supply chain and not passed on to the consumer. Manufacturers will pay the tariff to maintain market share, or importers will pay the tariff to save their account, or retailers will pay the tariff out of their huge markup, or the three of them will act together to absorb the tariff. Or, the manufacturer can avoid a tariff entirely by shifting production to the US – that’s why we have 74 foreign owned auto manufacturing plants in the US – to avoid a tariff! In the rare event the tariff is passed on to the consumer via a higher price, the consumer can pass and instead buy a US made product that is always tariff free. Far from being a regressive tax, a tariff is the best tax because no one has to pay if they do not want to.
This is false. That’s equivalent to saying consumers don’t have to pay the cost of higher wages for employees; the companies just pay them out of their own pocket. Or higher property taxes won’t be passed on (in some way) to renters; landlords just gladly pay as high of property taxes as possible
go back to old days. let the us gov pay for everything with tariffs and land sales. no more taxes. pipe dream of course. the middlebrows are getting exactly what they want. endless wars and debauched currency………
Profit sharing (employees and executives) is the answer to align incentives Same language in each contract so no cooking the books. Duh.
Not sure why this is so hard. Currently, Boeing management is killing the subsidized golden goose. Reality is probably that the profits don’t spread very far into many 10’s of K workers…even more workers now with Spirit.
As a result of Ford Motor Co.’s 2023 profits in the U.S., about 58,000 U.S. hourly workers will receive a profit-sharing checks averaging $10,416, Ford Chief Financial Officer John Lawler said Tuesday.
I like the lead photo where the woman is holding a sign stating “We Devoted Our Lives to Boeing”.
Someone should ask her ‘how would you like to devote your life working at your local 7-11?’
7 eleven closed 450 stores out of 21K stores.
Not a problem unless you work in one of those 450 stores, yes?
However, the point for the thick as a brick crowd was that working at 7-11 is probably quite a few steps below working at Boeing. No matter how much you may hate your job at Boeing, you would hate working at 7-11 even more.
No exposure to trichloroethylene or manganese at 7-11.
More exposure to lead nowadays at urban 7-11.
Did they close any with gas stations? Can’t just walk away from those, as the tanks must be removed or closed.
Given private unions only cover 6% of the USA workforce, I wonder why politicians kowtow to them? Do they really deliver votes in proportion to the attention they are given?
Donations, PACs, and votes. Plus public unions. And support “for the little guy”.
I support unions for the same reason they were invented decades ago. Workers (even highly paid and sought after ones) are almost always at a disadvantage when bargaining for their wages and benefits.
If BA settle with the union, the unions will expand
When they show workers that a union will put more money in the worker’s pocket, that’s not surprising.
Buybacks to pay 100K/150K highly skilled, semi skilled workers and executives wages and perks. To pay them BA diluted o/s stock adding 10M shares in 1Y. BA shares tumbled about $100 from $270 in Dec 2023 to $150, testing 2022 lows.
There is a huge demand for F-15, Apache helicopters, KC-46 tankers, bunker busting missiles…
All we need is China invading Taiwan.
you still sound insanely idiotic. get help.
Harris/Walz just announced that by 2028 all new planes must be electric.
Mouth breathers will snap this up and spread it far and wide.
It seemed plausible, though, didn’t it?
Only to dumb f*cks who are stupid enough to believe sh*t like that. And there are a lot of them here.
welcome to amerika. mish’s blog is just a perfect example of the dumbfuckery that has gotten worse and worse by the year and decade. lots of rot still to come. the gold standard is after the collapse of roman empire in UK,france,spain and italia herself, those dummies forgot to use the hot bath houses the romans built. even forgot the formula for concrete they were walking on. dumpy and mamala will look like genius to what’s coming down the pike…………
Yes. Mish tries hard to have reasonable discussions on economics, but it’s difficult when there are so many nut jobs in the comments section who just make sh*t up. Political narratives, cult conspiracies, fabrications and lies.
It’s why I rarely bother to read the political posts that Mish makes. The comments section on those is even more bizarre.
aye aye. he’s good at some economics and real estate. i wish he’d do more stock stuff. i thought he used to. maybe not. i go to lots of financial and r/e blogs…………
Battery or extension cord?
Unfortunately, you can’t have high internal taxes and low tariffs. The capital will always flow to the low tax regime. The answer lies in both higher tariffs than we have now (but not excessively high), and lower income taxes on corporations and individuals, until the two tax regimes come into balance. Alternatively, one could eliminate both income taxes and tariffs and rely on a sales tax, sufficiently high, but that’s politically unpalatable.
You get what you pay for.I have never had a car fail from being improperly assymbled.Boeing losses and woes are not because of improper assembly by workers but defective parts, improper design and management procedures.
You didn’t have a Yugo then!
Car industry is brutally competitive.
Check out China – C919.
remember the corvairs. my idiot brother owned two.
Would shutting down Boeing cause a slowdown in our costly foreign police action/wars? If so I’m for shutting it down as fast as possible.
BA is part of MICC. gov sponsored entity. no surprise both sides are jerks. bombs away
US gov’t would not be happy with Boeing shutdown. Airplane exports are a major component in minimizing the US foreign trade deficit.
like i implied. they are part ofthe military industrial CONGRESSIONAL complex. MICC. bombs away
Buying congressmen is cheaper than buying liability insurance.
Americans satisfied with the way things are going?
Feb 1979 26%
October 2024 22%
Jimmy Carter looking better and better….not in real life though
Did you get those statistics from Gallup? That 22% appears to be associated with “satisfied with how things are going in the US”
That organization also polls people for how things are going in their own personal life – 82% of Americans are satisfied with their own personal situation.
Knowing the context of what is actually being asked within the statistics (and why) is more important than the statistics themselves
Yes Gallup. Been around for 45 years. I quoted correctly. Good spin effort. 6 out of 10
It’s not spin; it’s statistical analysis
So yes, you quoted correctly, but without important context. Is 22% good/bad?
That particular Gallup poll has ranged from 10-40% (and not out of those bounds) since 2005. So for 2 straight decades – under multiple administrations – a majority or even supermajority of Americans have not been satisfied “with the way things are going in the US”. And it was at 13% at one point under Trump.
So, any particular reason you’re focusing on the recent 22%? That is low compared to Clinton’s 70%, but in the range for the past four Presidential terms
If its Boeing, I ain’t going
How dare all these workers demand decent wages, when Boeing needs to spend billions in shares buybacks to reward its failing leaders and complicit shareholders?
I am 100% in favor of letting private unions go on strike except were there is an unnatural monopoly (PATCO and longshoresmen).
I am also in favor of letting companies pack up their bags and go wherever they want leaving the strikers without a job.
Since it costs money to move operations, things would be reasonably in balance especially if we add national right to work laws which I am in favor of.
Great long term plan. Lets do something now. Require all pension funds and 401k contributions be made in Company stock that can’t be sold until you reach 65 YOA.
Interest rates kept at zero forever, so smart MBAs at Boeing calculated the best value for shareholders is buybacks. Biggest casualty of ZIRP.
Paging Jerome Powell.
Sorry Max. The last time Boeing bought back shares was 2019.
Just because “Andy” makes stuff up on the internet, doesn’t mean it’s true.
Which is the timeframe of pre-covid ZIRP. Then came the covid QE.
Lol! Why the f*ck does that matter? The discussion was about Boeings actions this year. Andy is accusing Boeing of buying back shares rather than giving workers a raise this year. And you are saying that Boeing is currently buying back shares because their MBAs told them to. I am just telling you both that neither of those things is true. Boeing hasn’t bought back shares for 5 years now.
Sorry Andy. The last time Boeing bought back shares was 2019.
Now you will have to make up another story.
Maybe, but the Boeing and McDonnell Douglas merger was corp greed at the highest, and now threatens the US airline industry and US military capabilities and readiness.
The execs and board members should be brought up on charges.
Don’t care. I’m just calling out the frequent bullsh*t that often appears online. Someone claims that Boeing is buying back shares when they are not. It’s that simple.
I have never owned Boeing shares. I am not defending them. I’m just calling out the lies that so many here think they can get away with.
It’s like FastEddy claiming that Permian production is crashing, when the reality is that it’s going up.
Or the morons here who think that there’s a weather machine creating hurricanes.
Lol! I don’t know what’s worse; the liars; or the dumb f*cks who believe the liars.
We move toward a lofty ideal.
On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.
– H.L. Mencken, July 26, 1920
Truth is stranger than fiction.
No, actually he won’t,
“It soon emerged that Boeing had spent a staggering $43 billion on stock buybacks between 2013 and 2019 – more than its total profits during that period “
During that long ZIRP period they were indeed buying back stocks and designing the 737 Max.
Lol! Yep. I know all that. So what? He was talking about this year. I was correcting him.
Or are you saying that Boeing knew in 2013 that their mechanics would go on strike in 2024, so they better buy back shares from 2013 to 2019 and then stop, to screw over their mechanics in 2024?
Few would complain if the company made good profit, spend it on R&D, dividends and still have some for share buybacks. However, ZIRP allowed many to borrow and buy back shares, and that was a financially “smart” move in a bankrupt system.
So what? Tell it to someone who cares. I am just calling out the lie that Boeing is currently buying back shares.
They are not.
The problems at Boeing reflect how incentives can be gravely misaligned under capitalism. Maybe it’s best if it is nationalized and treated like USPS
Déjà vu all over again.
Many COLAs were in union contracts in the 70’s.
Do you still have one of Jerry’s “WIN” buttons?
Recycling buttons is very green.
i worked the polls in 1976. wore a paper bowler too.
Unions like this are scumbags. Companies like Boeing are run by scumbags. They deserve each other. Compare this to the rail workers who, at least as far as we understood, was making reasonable demands for time off and to address worker safety issues.
Yup.
Of course they did eventually give up on demanding firemen on the new diesel-electrics.
And the railroads gave up cabooses decades ago. Of course with the increasing length of freight trains these day, manned cabooses may make a comeback to help monitor the load.
nope. no need.
Let Pete Booty be the caboose judge.