Hacker Remix

Boeing, Union reach wage deal to end strike

43 points by hhs 5 days ago | 72 comments

chasil 5 days ago

cyost 5 days ago

Article title jumps the gun. Union members still need to vote on whether to accept the deal Wednesday.

> The union announced the deal Saturday morning, saying, “it warrants presenting to the members and is worthy of your consideration.”

> The union plans to vote on the deal on Wednesday. Nearly 95% of workers voted to reject the last tentative deal, which the union’s leaders recommended.

Dalewyn 5 days ago

I hope the workers reject and continue the strike, forcing Boeing into bankruptcy will be a very good thing for the country even if it leaves investors and banks unhappy.

Arainach 5 days ago

How is forcing one of its largest employers, one of its largest manufacturers, and leaving the commercial airliner market dominated by foreign companies good for the country?

toomuchtodo 5 days ago

Because Boeing is too big to fail and will be parted out by the US government if management does not get it together. Management and equity will be wiped out, the manufacturing infra and workers will not. The demand for the product will still exist (civilian and military aircraft, space vehicles, etc), but the economic configuration will be forced to change by bringing the system to failure.

Based on all available evidence, Boeing is failing because of its management (since the McDonnell Douglas deal), its board, and its shareholders not pressuring for sufficient change.

https://aviationweek.com/air-transport/aircraft-propulsion/d...

blackeyeblitzar 5 days ago

It’s not solely management or shareholders. If you have worked for Boeing or with them as a contractor or supplier, you have probably experienced some of the cultural issues with their workforce. A lot of the companies biggest failures have a mix of people who caused them. Remember, the door plug was meant to be secured in final assembly by an IAM worker. And even if you go back to the two 737 Max hull losses, the design of it and choices like having no redundancy on a cheap sensor were done by SPEEA workers (the union for technical staff). Boeing is also failing due to the low quality workers it has, their demands, and the inability to freely replace them. It’s not just bad executives.

genocidicbunny 5 days ago

Well, a problem with company culture is still absolutely the fault of management, so I think it's fair to lay the blame at their feet. If your workforce is underperforming, invest in training them or finding a better workforce. If you can't find a better workforce for what pay you're offering, offer higher pay. And if you can't afford to do that and keep your business profitable... Sucks to suck; you don't have any guaranteed right to profit.

blackeyeblitzar 5 days ago

When I said “cultural issues with their workforce” I didn’t mean general “company culture” but the “union culture” specifically. Is that still a responsibility of management? Sure, for some aspects. But unions remove a lot of the control and tools management usually has to deal with some problems effectively.

genocidicbunny 5 days ago

Absolutely still a responsibility of the management. Management can find other, different tools to deal with problems if they're feeling like they're being hampered by the union. Management is not entitled to anyone's labor and if said labor collectively tells management "our way or the highway", well, c'est la vie.

Unions provide a form of power symmetry between the general workforce and the upper management of the company, and while it's not always balanced with the power of the company itself, the alternative is even more asymmetric. And ultimately, if the union is behaving in such a way that none of their members can find employment, the problem will tend to correct itself.

ETH_start 4 days ago

The union mindset is being exhibited in your comment here, where you scapegoat the management for everything. Even things where the unions aggressively fought for and have now mandated into law at the expense of management's contract freedom.

genocidicbunny 4 days ago

> where you scapegoat the management for everything.

Well, that's sort of their job -- to be the ones responsible for the actions of the company. If I hire you to do a job, and you don't do it, I'm not 'scapegoating' you if I complain that you didn't do the job I hired and paid you to do.

> Even things where the unions aggressively fought for and have now mandated into law at the expense of management's contract freedom

Most of these are the 'FO' part of 'FAFO' historically, so I have little sympathy there.

ETH_start 4 days ago

The laws unions had passed give legal control over significant amounts of company operations over to unions. They put a straightjacket on management by restricting the contract freedom of the employer. The employer cannot fire workers for unionizing or striking, and cannot negotiate with any party but the union if the majority of a work unit votes to unionize. Property/control get transferred to the unionized employees under unprovoked duress — by prohibiting the employer from entering into any other contracts.

It's not a free market and yet you want to place all blame for the failings of companies with unionized workforces on the employer.

You justify all of this with a faux victim ideology that is anti-capitalist in its roots and vilifies the employer for exercising their property and contracting rights in ways that a critical mass of employees, constituting a mob, don't like. Well, anti-capitalism begets a loss of capital and with it prosperity. And that's all we've ever seen from it.

genocidicbunny 4 days ago

And many of those rights and abilities that you deride of unions have been hard won with literal blood and death by workers. Because the alternative to unions isn't a free market, it's a massive power asymmetry where individual employees have more or less no negotiating power. Those employees that do have comparable negotiating power are largely a rounding error.

> They put a straightjacket on management

Maybe we have vastly different life experiences here, but I've worked with and under managers who absolutely should be put in a straightjacket and shipped off to the looney bin.

> the employer cannot fire workers for unionizing or striking

Right, because the alternative is being subject to the capricious whims of management who play with your livelihood like it's a game. Most people do not have the luxury of being able to afford to lose their job for even a short while.

How about instead we make at-will employment work both directions? My manager can fire me, but I can also fire him, for any reason. Seems only fair that both sides have about equal power.

> You justify all of this with a faux victim ideology that is anti-capitalist in its roots and vilifies the employer for exercising their property and contracting rights in ways that a critical mass of employees, constituting a mob, don't like.

And you're vilifying employees for exercising their rights to negotiate their contracts instead. Why should I be restricted from banding together with my fellow workers? After all, you're wanting a free market, which should mean freedom to associate or not.

> Well, anti-capitalism begets a loss of capital and with it prosperity

We've got quite a large population of people who would argue that it doesn't, because they don't have any capital or prosperity anyways. Can't lose what you don't have.

Unions don't always do things well, and sometimes they do hurt their own interests in the long run, but that's not because they're unions, but because they're human organizations. Non-union companies do the same, management does the same. But as long as management wants to have all the power and control over their employees, they need to also take on the responsibility from said employees, even if it means accepting responsibility for someone else's fuckup. After all, if you had the control, why didn't you prevent the fuckup?

ETH_start 1 day ago

>And many of those rights and abilities that you deride of unions have been hard won with literal blood and death by workers.

Unions provided no rights or abilities that I'm aware of. Laws restricting employment contracts to those that provide overtime pay are not rights. They're restrictions. People don't need a government telling them they can't work 10 hours a day at some given rate.

And no, it is completely irrelevant how large a company is: the worker has absolute negotiating power to reject any offer the employer makes. The only power the employer has in a free market to compel someone to work for them is to offer the employee terms that are better than anything else the employee can find in the market.

But what this ideology you espouse does is scapegoat the employer for the dismal options available to the worker, which would compel the worker to accept wages that you consider too low. On the basis of this scapegoating, you try to justify coercing the employer to provide a higher wage than they would choose to in a free market.

>And you're vilifying employees for exercising their rights to negotiate their contracts instead. Why should I be restricted from banding together with my fellow workers? After all, you're wanting a free market, which should mean freedom to associate or not.

I as an employer can choose to not associate with you and your band in a free market, and choose to only negotiate and employ workers who are not part of a union. But you don't want a free market. You want the government to commandeer the employer's assets and dictate to them who they choose to negotiate with.

>We've got quite a large population of people who would argue that it doesn't, because they don't have any capital or prosperity anyways. Can't lose what you don't have.

That's not how it works. Wages go up when capital increases, irrespective of how much capital the wage earners themselves personally own. Greater amounts of capital is why the US provides wages that are so much higher than the EU average. The EU's greater embrace of anti-capitalist ideology — which consists of the kind of authoritarian demands you're making here — harms workers.

Dalewyn 5 days ago

The problem isn't Exec vs. Union or McDD vs. Engineers or any specific bit of Boeing, it's all of Boeing as a whole from top to bottom including the striking workers and that's why a bankruptcy will be a good thing.

A bankruptcy will force Boeing to either restructure from the ground up or be cut apart and distributed to companies who can hopefully conduct business better.

ETH_start 4 days ago

Wiping out the investors does profound downstream harm because it means that future investors will be less likely to invest in these kinds of companies, or smaller companies striving to occupy similar roles.

Moreover, union obligations cannot always be petitioned in bankruptcy proceedings. This has resulted in company assets being dissolved altogether, instead of sold off and used, in some cases in the past.

Dalewyn 4 days ago

To be clear, there won't be a "wipe out" at least in the "floor fell out from left field" sense.

If a bankruptcy becomes likely, investors will start selling Boeing stock to recover what they can. Creditors will start calling Boeing bonds, if applicable. Remember, "the market has priced it in" is a meme for a reason.

So far we haven't seen anything like that yet, just otherwise normal reductions in stock valuation following lackluster business performance.

However, Boeing is courting the possibility of having their credit ratings reduced to junk bond status by Moody's[1] and S&P[2] and that would certainly be a potential sign of the end times coming. Getting slapped with junk bond status literally means lenders should not consider Boeing reasonably solvent.

[1]: https://www.marketwatch.com/story/boeings-bonds-are-being-sn...

[2]: https://finance.yahoo.com/news/boeing-biggest-ever-us-fallen...

Arainach 5 days ago

Can you point to a bankruptcy where what you described (management wiped out, manufacturing infrastructure not) actually happened and didn't fail within 5 years?

toomuchtodo 5 days ago

The reorg of GM by the Obama administration does not tick all the boxes [1], but is the most recent example that would come to mind of government support via BK management and recapitalization. The administration did this to save jobs and the manufacturing supply chain [2].

Capital is made up, management is fungible, manufacturing supply chains and systems are the hard part (which is why, after incredibly aggressive financialization, Boeing is having to acquire Spirit AeroSystems, which had previously been spun out for cost savings...which went to management comp and shareholders). If you are optimizing for a specific outcome, it is important to understand the malleability and limits of the components that make the whole.

Even Elon recognized this during Model 3 production hell [3]. I suppose we must always learn the hard way for the lesson to be of value. If management is the problem (and it is very clear Boeing management is the problem), it must be replaced so that the people who do the actual building can build. This is no different than the tech culture of "employ great people and get out of their way."

[1] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

[2] https://obamawhitehouse.archives.gov/economy/jobs/rescuing-t...

[3] https://x.com/elonmusk/status/984882630947753984 ("Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.")

hhs 5 days ago

If interested, Charlie Munger had a special take on the failure of old GM and several other things, including what was said about unions:

"General Motors, out of the profits of their good years, they could have bought, every year, for many years, a big company. They could have bought Eli Lilly one year and Merck the next, and United Technologies. General Motors could own the world. Instead, what they declared to their shareholders was a goose egg. They took the common equity to zero. And they would say it was all somebody else’s fault. The climate was bad, the unions got powerful. Those damn Asians and Europeans were too competitive.

The truth of the matter is, their very prosperity made them weak. The dealerships got in the hands of inheritors, and the executives on the sales field go around and drink martinis with inheritors, and didn’t pay enough attention to defects in their vehicles. And one thing led to another, and when they were all done the shareholders’ equity went to zero.

And that was in a company that at its peak was one of the most admirable companies in the world. Take the stuff that Boss Kettering (Charles Kettering – head of research at General Motors from 1920 to 1947) had invented in the early days. Kettering was one of the most useful citizens that ever lived in America.

A self starter on a car is a wonderful thing. Under the old system, you frequently broke your arm. You would give it a crank and it would answer back by spinning backwards and breaking your arm. I would much rather push a button than have my arm broken. Nor do I have the opportunity to go and crank in the sleet and snow." [0]

[0]: https://fs.blog/worldly-wisdom-from-charlie-munger/

Dalewyn 5 days ago

The economical benefits were already laid out by another commenter, so I will lay out the cultural benefits.

Namely, seeing an American darling like Boeing go under could finally destroy the idea of American Exceptionalism(tm). Like it or not, the country as a whole is stagnant and losing its grip on the title of Superpower with fierce competition from China.

America was great and it can be great again, but we will continue to fall into irrelevance if we can't first accept that we aren't the same America that won World War II, took mankind to the Moon, and created the internet. Boeing going under could finally force Americans to accept our current place in the world.

interactivecode 5 days ago

Free market, it will open up a lot of opportunities for new companies

chasil 5 days ago

It is incredibly expensive to develop large airliners.

As I understand it, the only peer companies that do so are Airbus, COMAC, and Embraer (Edit: Bombardier ended with the A220).

Which one of these should replace Boeing?

blackeyeblitzar 5 days ago

COMAC will succeed. Embraer is sort of boxed in and made the bad decision under Lula of making a deal with China that includes local manufacturing and technology transfers. They’re segmenting the market between them. Bombardier got killed by Boeing’s games with them and yes the remnants are the A220.

chasil 5 days ago

COMAC just had its first order from the Americas:

https://www.reuters.com/business/aerospace-defense/brazilian...

Four planes.

loeg 5 days ago

There is also Bombardier. But none except Airbus makes planes in the same class as Boeing.

bobthepanda 5 days ago

Airbus purchased the Bombardier program

loeg 5 days ago

Ah, thanks.

Dalewyn 5 days ago

Airbus of the ones listed.

However, Northrop Grumman could also buy out Boeing's large aircraft bits and (re)enter the commercial airliner market.

I doubt Lockheed Martin would be interested, they're into smaller aircraft these days.

blackeyeblitzar 5 days ago

There is no free market for something like this. You need so much capital and there are better places to invest. Venture won’t do it. Government would have to and they simply have no understanding or appetite for funding startups for such spaces. Yes we could do so much better than Boeing but it’s more likely the government will repeatedly bail them out than do something about this.

interactivecode 4 days ago

So perhaps the free market doesn’t really exist. Only various sized barriers to entry

blackeyeblitzar 5 days ago

Realistically they’ll get bailed out. In other words, taxpayers will subsidize the failures of the company and the deals struck by unions. Ideally we would instead fund more competitors from an early stage.

bloqs 5 days ago

They haven't reached a deal. This article is bought by boeing interests to try to force the narrative. I can't believe I am typing this

blackeyeblitzar 5 days ago

You’re right, it still has to go to vote. But union representatives in the negotiating position have approved of the deal. On the other hand they approved of the initial Boeing offer that got nearly universally rejected. So who knows what will happen. I suspect this vote will not be nearly as skewed.

5 days ago