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Another Potential Boeing Challenge

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As Boeing continues to respond to its ongoing challenge of responding to the grounding of the operational 787 Dreamliner fleet, another challenge lies at the doorstep. About 23,000 engineers who belong to The Society of Professional Engineering 

Boeing 787 first ship from South Carolina facility

Source: Boeing Website

Employees in Aerospace (SPEEA) are tallying a vote today on whether to accept Boeing’s latest labor contract offer or authorize a work stoppage. Ballots were due by 5pm today, and both Boeing and SPEEA leaders decline to speculate on the outcome of the current vote. The last work stoppage involving SPEEA occurred in 1999, resulting in a 40 day walkout and the delayed delivery of 50 aircraft.

As The Wall Street Journal points out in its reporting, the irony of today’s vote is that it comes as hundreds of engineers continue working around the clock on the root cause and fix to the suspected 787 lithium ion battery system. A strike could well be another setback in these efforts. The latest efforts in the ongoing investigation focus on examining the formation of microscopic deposits or “dendrites” inside the lithium ion batteries.

Boeing indicates that its contingency plan to have management employees to perform some of the engineering functions.  That may not be such a practical solution given the number of regulatory agencies involved in the ongoing investigations.

If a strike is authorized, SPEEA officials indicate it would not come before early March, to allow members to get a full month of health benefits. That interim time could possibly add more time for added negotiations. Meanwhile, Boeing’s 787 supply chain partners continue to be concerned about revenue flow as they await further firm guidance regarding the 787 production schedule in 2013.

Bob Ferrari

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  1. Bob Ferrari says:

    Hello Everyone,
    This is a brief update to our above commentary related to a potential labor stoppage involving engineers and technical workers at Boeing’s commercial group.

    The contract ratification tally from members of the Society of Professional Engineering Employees in Aerospace (SPEEA) turned out to be a split vote. Roughly 12,000 engineers accepted their contract offer from Boeing by a narrow vote, and also voted not to strike. However, the roughly 6000 technical workers voted not to accept their contract offer and authorized a strike.

    According to a spokesperson for SPEEA, a strike by the technical workers is not imminent but the union negotiating team can call one at any time. Union negotiators expressed a desire to resume negotiations but a statement issued by Boeing Commercial Airplanes President Ray Connor expresses deep disappointment in the technical workers rejection, in what he termed as the company’s “best and final” offer.
    According to the SPEEA web site, Boeing offered an annual 5 percent wage pool increase with no increases in employee medical coverage, and elimination of pensions for all future employees. In place of pensions, Boeing offered a 401K retirement package that the union alleges as a 41 percent cut in retirement benefits. This seems to be the main stumbling block for ratification.

    This situation for Boeing and SPEEA now becomes dicier, as the union postures for gaining a settlement for its technical branch while Boeing appears to be digging in its heels in terms of any further concessions. Given the narrow voting margins from both engineers and technical workers, this situation could become more mired if both sides do not make some progress in the days to come.

    The crisis indeed continues in parallel with finding a resolution to the 787 battery issue that has grounded the operational fleet.

    Bob Ferrari