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eridani

(51,907 posts)
Fri Aug 16, 2013, 03:53 PM Aug 2013

Union Busting Doesn’t Pay Off for Boeing

http://www.eoionline.org/blog/union-busting-doesnt-pay-off-for-boeing/

When Boeing announced in 2009 that it would invest $750 million in a new South Carolina production plant to build the 787 Dreamliner, the airplane giant said it needed to cut down on costs being driven up by unions. After years of battling with machinists unions, Boeing moved to non-unionized South Carolina where workers’ benefits and pay are much lower. In South Carolina, for example, Boeing pays plant workers $15 per hour, almost 50 percent less than what Washington assembly line workers earn.

Privately, however, this was never the case. In an internal memo that later became the basis for a complaint to the National Labor Relations Board, Boeing bigwigs admitted that not only would the move cost them money, but “the only consistent advantage attributed to Charleston was the ability to ‘leverage’ the site placement decision toward ‘rebalancing an unbalanced and uncompetitive labor relationship.’”

But years later, Boeing is seeing another consequence to its costly move out of Washington – a less productive labor force. According to the Puget Sound Business Journal:

“Boeing’s South Carolina facility is running behind projections and won’t make its goal of producing three 787 Dreamliners a month by the end of 2013. In fact, the Everett plant will have to make up the difference in order for the company to reach its overall goal of 10 jetliners a month by year’s end.”

Washington’s Boeing machinists and assembly line workers are some of the best in the world because our state has the infrastructure to support their training, certification and long-term employment. The skills, awareness and experience from years of work in the industry are held partly by individual workers, but also in a local network of relationships, trust and everyday interactions in the workplace. This is clear to workers and managers close to the factory, but less so to executives in offices 2,000 miles away. Washington’s competitive edge in aerospace has even led Airbus, Boeing’s major global competitor, to consider opening a Washington engineering center.
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Union Busting Doesn’t Pay Off for Boeing (Original Post) eridani Aug 2013 OP
who coulda guessed? KG Aug 2013 #1
so are all the non union dreamliners still grounded, costing boeing billions lol nt msongs Aug 2013 #2
Moral of the story: mick063 Aug 2013 #3
Dontcha just love . . . Brigid Aug 2013 #4
Attempting to save money has cost Boeing. Dawson Leery Aug 2013 #5
Please remind me why the 787 is a piece of garbage Trajan Aug 2013 #6
Not just the batteries KamaAina Aug 2013 #9
Initial defects are typical for any new aircraft model ... Trajan Aug 2013 #17
You're right about the Airbus KamaAina Aug 2013 #25
That is actually a complicated story--some outtakes from the Washington forum-- eridani Aug 2013 #7
I thought this was the reason. MicaelS Aug 2013 #13
Washington is and has been sulphurdunn Aug 2013 #8
+1000 mountain grammy Aug 2013 #10
well said! liberal_at_heart Aug 2013 #20
Ha Ha. nt awoke_in_2003 Aug 2013 #11
Good book on the topic: KT2000 Aug 2013 #12
Whewduthunkit? Rain Mcloud Aug 2013 #14
Good malaise Aug 2013 #15
+1 freshwest Aug 2013 #21
+2 bravenak Aug 2013 #26
My husband's first "real" job after the army and finishing A&P school on the GI bill mountain grammy Aug 2013 #16
I love it! AppetiteForApathy Aug 2013 #18
I hope they do lose profit. those bastards. I've known WA Boeing workers and they are proud liberal_at_heart Aug 2013 #19
All of those factors, so well enumerated there, have been under attack for years here now. freshwest Aug 2013 #22
Fucking people over doesn't bring trust? Aerows Aug 2013 #23
Seriously Aerows Aug 2013 #24
Not buying it. MannyGoldstein Aug 2013 #27
 

mick063

(2,424 posts)
3. Moral of the story:
Fri Aug 16, 2013, 04:01 PM
Aug 2013

Following the modern business model works well for cheap plastic toys.

Not so much for technically difficult jet liners.

 

Trajan

(19,089 posts)
6. Please remind me why the 787 is a piece of garbage
Fri Aug 16, 2013, 04:53 PM
Aug 2013

Knowing that; a singular battery does not a jetliner make ....

 

KamaAina

(78,249 posts)
9. Not just the batteries
Fri Aug 16, 2013, 06:06 PM
Aug 2013
http://en.wikipedia.org/wiki/Boeing_787#Operational_problems

A JAL 787 experienced a fuel leak on January 8, 2013, and its flight from Boston was canceled. On January 9, United Airlines reported a problem in one of its six 787s with the wiring near the main batteries. After these incidents, the U.S. National Transportation Safety Board subsequently opened a safety probe. Later, on January 11, 2013, another aircraft was found to have a fuel leak....

On January 13, 2013, a Japan Airlines 787 at Narita International Airport outside Tokyo, was found to also have a fuel leak during an inspection, the third time a fuel leak had been reported within a week. The aircraft reportedly was the same one that had a fuel leak in Boston on January 8. This leak was caused by a different valve; the causes of the leaks are unknown. Japan's transport ministry has also launched an investigation.

On July 12, 2013, a fire started on an empty Ethiopian Airlines 787 parked at Heathrow Airport before it was put out by the airport fire and rescue service. No injuries were reported. The fire caused extensive heat damage to the aircraft. The FAA and NTSB sent representatives to assist in the investigation. The initial investigation found no direct link with the aircraft's main batteries. Further investigations indicated that the fire was due to lithium-manganese dioxide batteries powering an emergency locator transmitter (ELT). The UK Air Accidents Investigation Branch (AAIB) issued a special bulletin on July 18, 2013 requesting the US FAA ensure that the locator is removed or disconnected in Boeing 787s, and to review the safety of lithium battery-powered ELT systems in other aircraft types.

On July 26, 2013, ANA said it had found wiring damage on two 787 locator beacons. United Airlines also reported that it had found a pinched wire in one 787 locator beacon. On August 14, 2013, the media reported a fire extinguisher fault affecting three ANA airplanes which was quickly traced to an assembly error by the supplier.


I certainly hope it isn't a piece of garbage. ANA uses it to fly the only route from San Jose to Asia.
 

Trajan

(19,089 posts)
17. Initial defects are typical for any new aircraft model ...
Sat Aug 17, 2013, 02:07 AM
Aug 2013

All designs go through a maturation phase, and the 787 is no different .... Airbus had serious problems with their aircraft, as has had other Boeing models .... It seems a tad biased to focus exclusively on the 787 in this regard, when you must already know this is true ...

The 787 has no greater frequency of defects than other aircraft types, bar none ....

 

KamaAina

(78,249 posts)
25. You're right about the Airbus
Sat Aug 17, 2013, 03:49 PM
Aug 2013

but you must admit, the 787 FAILs rise to a new level of EPIC. Way too many fires.

eridani

(51,907 posts)
7. That is actually a complicated story--some outtakes from the Washington forum--
Fri Aug 16, 2013, 05:48 PM
Aug 2013

Stan Sorscher is one of the sharpest engineers posting comments about Boeing--definitely worth googling.

http://www.richardaboulafia.com/shownote.asp?id=373

This terrifying state of affairs for the Dreamliner, of course, was merely background for Boeing’s fourth quarter earnings call this month. The 787 fiasco wasn’t discussed, except that (a) the investigation was continuing and couldn’t be discussed and (b) 787 production was continuing full speed ahead, despite uncertainties about what needed to be done for the battery system, or any other aspects of the plane’s design. If these planes being built need major retrofit work in the future, well, that’s for the engineers to worry about.

Meanwhile, there was no contrition or soul-searching on the call about how the 787 could have gone this wrong, or what could be done within the company to make it right (once again, 787 program analysis was left to the journalists). Instead, the call emphasized some impressive sales and profit numbers. It was like a farmer showing off a great crop, but not mentioning that the tractor just broke, he fired the mechanic, and outsourced tractor maintenance to Bolivia. And that customers for next year’s crop had been promised penalty payments if the farm didn’t deliver.

Chicago’s view of engineering, as seen in management changes, union negotiations, product launch decisions, and design outsourcing moves, is that it’s a secondary consideration, far behind financial and market considerations such as Return On Net Assets (RONA). But clearly this strategy of downplaying engineering is starting to have a deleterious effect on the company’s financial performance, at least in terms of equities returns relative to the competition. Sure, investors may be scared by the high compensation costs associated with the 787’s woes. But it’s also possible that investors may be getting spooked by a company that seems to lack a proactive approach for dealing with a serious crisis. Even when the 787 gets back to service, it may face further difficulties. There’s also the likelihood that Boeing may be returning to the bad old days of 1998-2003, when it spent next to nothing on new product development.

In other words, Boeing’s problem isn’t just that the engineers have been nudged aside by the bean counters. It’s that the bean counters need to rethink the way they manage the company. Until that changes, investors may continue shifting


Market Discipline for the Boeing 787
http://www.huffingtonpost.com/stan-sorscher/boeing-787_b_2512541.html#postComment

The 777 program leaders built in, from the beginning, the engineering problem-solving culture we used successfully on decades of previous programs. Technical leaders could capitalize on trust built through teamwork to allocate sacrifice to some stakeholders, and focus extra resources elsewhere, optimizing on the program overall. This is best done upstream in the course of a program -- assuming you have the decision-making authority, which was intrinsic to the 777 business model.

It's much harder to solve problems downstream, and harder still, if, like on the 787, you have weak decision-making authority and poor understanding of what other stakeholders are doing.

The 777 was built on schedule and delivered on time; it qualified for long-range operations over water at entry into service; it had great dispatch reliability from the beginning; it is currently making customers happy; and is making money for shareholders.

In contrast, the business culture on the 787 program was structured, from the beginning, to skip all those coordination costs. The 787 business model relies much more on suppliers for design and manufacturing. Coordination and problem-solving are relatively weak. Program leaders seem paralyzed when problems come up, because authority for fixing problems is also diffused into the supply chain.


In business school terms, it can be expressed this way. Are airplanes more commodity-like or are they performance-driven products? I can think of my cell phone as commodity-like, and replace it with another brand. I can switch airlines to get from Dallas to Chicago, which makes air travel more commodity-like.

On the other hand, when airline customers pay $100 million for an airplane with a 25 year service life, they expect a reliable, heavily-engineered, performance-driven product.

Commodities might do well in the global supplier business model, regulated by market discipline. To the extent airplanes are more performance-driven, it makes sense to pay higher up-front coordination costs.

http://www.dailykos.com/story/2013/01/18/1180038/-Boeing-s-outsourcing-strategy-in-the-spotlight-as-FAA-grounds-the-Dreamliner

In the wake of the FAA's decision to ground Boeing's snazzy 787 Dreamliner planes after a series of scary incidents, Boeing's decision to outsource the plane's parts to factories around the world is being questioned. It would be hard to overstate the scope of the outsourcing, which involved 50 suppliers and 135 sites, which had already caused the 787 to be released years behind schedule, and which may have contributed to problems now:

Fifty per cent of the Dreamliner is made from composite materials, including much of the fuselage and wings, which come from manufacturers in Japan, Italy, South Korea, the United States and elsewhere.
Some 70 per cent of the plane is outsourced, said Richard Tortoriello, an analyst at Standard and Poor’s.

“That creates a potential for more problems to occur than if production is centralized, because quality control can be better managed” in a centralized process, he said

MicaelS

(8,747 posts)
13. I thought this was the reason.
Fri Aug 16, 2013, 06:58 PM
Aug 2013

To try to placate other countries, and get their airlines to buy Boeing, they have outsourced much of the 787, and now this is biting them in the ass.

 

sulphurdunn

(6,891 posts)
8. Washington is and has been
Fri Aug 16, 2013, 05:57 PM
Aug 2013

the real home and Mecca of the American aerospace industry for generations, and if Boeing survives it will be in spite of the idiocy of its corporate management.

KT2000

(20,568 posts)
12. Good book on the topic:
Fri Aug 16, 2013, 06:53 PM
Aug 2013

Turbulence: Boeing and the State of American Workers and Managers, by Edward Greenberg, Leon Grunberg, Sarah Moore, Patricia Sikora, Yale University Press, 2010, 237 pp.

The how and why of the cultural change at Boeing. They went from a regulated industry to an unregulated one which meant they went from stability to business cycles. (Not one airline was in favor of deregulation) Then came the Airbus. They were not suffering economically when they embarked on the change, in fact they were doing well. They really just thought they would have to change to stay current. They did not realize what they had was the winning ticket all along. They went from long-term plan and designs to short-term cost-cutting and along the way broke the engineering culture that used to define the company.

 

Rain Mcloud

(812 posts)
14. Whewduthunkit?
Fri Aug 16, 2013, 06:58 PM
Aug 2013

If you had a brain tumor,you would obviously get your bro-in-law to carve it out. Or not.
It might be better to get a neurosurgeon even if the greedy shysters down at the sisters of sweet mercy hospital want $250,000 with %10 down and you must sign a contract so they can take all your stuff,in case you are permanently damaged by malpractice or infection and can not pay. Even so.

So why would you hire a Wal*Mart worker to build the equivalent of a spacecraft?
Some greedy CEO's need to find some other career path,IMO. Maybe someone needs a Dog Walker?

mountain grammy

(26,598 posts)
16. My husband's first "real" job after the army and finishing A&P school on the GI bill
Fri Aug 16, 2013, 07:49 PM
Aug 2013

was working for Boeing in Wichita, KS. He made $6/hr., or, as he likes to say, 10 cents a minute, almost 4 times minimum wage (at the time $1.60.) That was 1973 or so and he was 23 and a proud member of the IAM, with an A&P license, making a living wage with benefits. He later moved on to the airlines.
40 years later, Boeing is paying "skilled" workers $15/hr, 2 times minimum wage, and, in reality, what the minimum wage should be. Really? What could possibly go wrong?

America, the official nation of Walmart! Even if we make it here, the corporations want to make it on the cheap.

 
18. I love it!
Sat Aug 17, 2013, 02:11 AM
Aug 2013

When the free market takes that rare shit on employers for messing with labor, it feels good bro.

liberal_at_heart

(12,081 posts)
19. I hope they do lose profit. those bastards. I've known WA Boeing workers and they are proud
Sat Aug 17, 2013, 02:14 AM
Aug 2013

of their work and were proud to be part of Boeing before they started trying to break the union.

freshwest

(53,661 posts)
22. All of those factors, so well enumerated there, have been under attack for years here now.
Sat Aug 17, 2013, 01:36 PM
Aug 2013

Eyeman's initatives and the GOP obstruction on maintaining highways, and those who profited from shutting down mass transit and non-toll roads pushed by those who backrolled Eyeman, were cited as part of the reason for their move, as well.

Whether Boeing was being honest or not, they did come out publicly against his revenue cutting plan. And it made sense, as they said that more congestion, less abiility to transport at low cost from the state providing good transit was a factor.

That if WA wasn't going to keep up infrastructure by funding government, where once the state was one of the biggest employers, it was going to take away WA's competitive edge.

The voters are in charge of those things, and if they keep following the Island Libertarian route, the state will continue to be divvied up between the wealthy areas where they keep people from traveling through, with toll roads they can't afford to work there, and cutting down on mass transit.

IOW, screwing the poor and working class out of the opportunity for these good jobs. It's the kind of thing that is not used as a talking point nor the philosophy debated except in sloganeering about evil government, freedom, liberty and all that bullshit. The effects are no less real for the people who need to have mobility and skills. I'm sick of privatization clowns devouring what worked for everyone for so long. They're just thieves.

It seemed that Boeing was reacting to what they saw was more conservativism which works fine for those who don't need to work, just to hold onto to assets and force others out or to pay too much to get access. The problem I see is that the public sector is being attacked viciously by media for the private forces in so many ways. We had a charter school initiative pass, and the 520 bridge is a toll road, AFAIK. I used to travel that bridge to do business there, and not only myself, but others I know have been impacted by the some of the East Side's aversion to public transit and state funded roads.

What I've heard some say in essence, is that they don't want the riff raff coming out there. If you can't afford the gas and maintenance of a vehicle to traverse the area, go away. I know people who are losing hours everyday from the cuts in mass transit and even having to beg rides if their family has only one car, the Seattle based person has to drive to pick them up when they get off work making a burden on them since the buses don't run even hours.

And I know others like myself, who can't pay the tolls so I no longer go over there. This is economic apartheid. Okay, not enough coffee to make a coherent rant. But this is something we cannot take for granted. Civil government and those relationship forged by it as the OP says, are dying a slow death as this other system takes over the state.



 

Aerows

(39,961 posts)
24. Seriously
Sat Aug 17, 2013, 01:46 PM
Aug 2013

I think what some manufacturers miss in the grip of the race to quarter profits, every quarter - no matter what it takes, is that labor can become skilled labor and skilled labor can become highly skilled and it can evolve within the company without radical changes.

It costs more to hire someone to do labor and fire them because they aren't working out than it does to give respect to those workers, and allow them an opportunity to move up the ladder. That is what America is supposed to be about. When you guarantee that there will be no upward mobility, disrespect workers and tell them through your company's actions to get a better job ... they will.

 

MannyGoldstein

(34,589 posts)
27. Not buying it.
Sat Aug 17, 2013, 04:42 PM
Aug 2013

Next you'll be telling me that Costco, who pays its workers 3x what Walmart does, is making a serious profit.

Oh, wait...

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