Posted by: Carol Matlack on September 08
Take two companies—let’s call them A and B—competing head-to-head in the same business. Rank-and-file worker salaries at both are roughly comparable. But Company A is struggling financially. Most employees got a 1.5% raise this year, and management has announced plans to eliminate about one in five jobs.
Company B, though, is in pretty good shape. Management recently offered workers an 11% pay raise over the next three years, along with bonuses of more than $5,000 and a 14% boost in company payments into their pension plan.
So, guess which company’s employees are out on strike?
OK, so the headline gave it away: Airbus is Company A, and Boeing Co. is B. On Sept. 6, members of Boeing's biggest union walked off the job, halting production and throwing the timetable for the already late-to-market 787 Dreamliner into confusion.
Contrast that with Airbus, based in Toulouse, France. It has suffered only minor labor protests as it moves to eliminate 5,000 jobs over the next two years as part of its so-called Power 8 restructuring plan. Union leaders also agreed to that 1.5% pay raise, well below France's 2.5% inflation rate in 2007.
What happened to those famously militant French labor unions? At Airbus, most of the rank-and-file is represented by the Force Ouvrière, or Worker Power union, one of the country's most hardcore labor groups.
Sounds ominous--but the truth is, private-sector strikes in France are exceedingly rare. Transit workers, teachers, even doctors, frequently walk off the job, but factory workers almost never do.
At Airbus, union leaders may realize that a strike could aggravate an already precarious situation. The company has posted operating losses for the past two years as production delays on the A380 mega jet knocked billions off the bottom line. The euro's rise against the dollar has seriously dented its competitive edge against Boeing.
And, it must be said, Airbus is still a pretty good place to work. Starting pay for the least-skilled production workers is about $15 an hour, and experienced machinists make $26 or $27 an hour--roughly the same as the average machinist salary at Boeing, though it's difficult to make direct comparisons because French workers get more-generous benefits than Americans. Among other things, they pay practically nothing out-of-pocket for health care, and under French labor law, most can expect nice severance packages if they're laid off.
Moreoever, Airbus isn't laying anyone off: The job cuts are being made through attrition and early-retirement buyouts. To the unions' relief, Airbus also has scrapped plans to sell some of its French and German factories, a move that had sparked fears that the new owners would shift jobs to lower-cost countries. Airbus abandoned the idea after it was unable to find buyers. "We were afraid of outsourcing, but things have calmed down," says Matthieu de Georges, a Force Ouvrière representative. For the moment, he says union members have no major complaints about Airbus. "Of course if they say they aren’t happy, we’ll act."
Asked if Force Ouvrière would care to comment on the Boeing strike, de Georges politely demurs. But it's hard to avoid the conclusion that Airbus stands to benefit if Boeing's unions stage a long and crippling strike, or if they win concessions from management that significantly drive up production costs.
NEWS FLASH: Those Airbus union members now have a new reason to protest. Louis Gallois, the CEO of parent company European Aeronautics Defence & Space, tells French newspaper Le Monde in an interview September 9 that Airbus will begin producing some aircraft components in Tunisia to cut costs and reduce its exposure to the strong euro. Stay tuned!
Job security! No guarantee fm mngmt that no further outsourcing. Outsourced components of 787 could not come on time for assembling, 14 months delay from 787 maiden flight. Told ya' so!, says Boeing's union.
This is typical again and proves what I have bee saying all along:
Unions are a total waste, they are self serving, give a damn about workers and cost every one tons of money because of their idiotic, self serving policies.
WHEN will the American public ever wake up to the fact that unions should be scrapped,for now and EVER.
The other thing I do not understand is WHy do these idiots of workers are going on strike when their company is trying to survive and be competative with Airbus?
If Boeing sinks they can thank moronic unions and ignorant workers for it.
Disagree? I welcome your comments.
PS. I am European, have lived here for 47 years and will never understand the US mentality on many matters, totally unrealistic,impactical in many cases,very materialistic and not too bright!
Jurgn Ankenbrand
PS. I am in the process of writing a book (I am a published author) abput current social and political issues and many of my 40 articles (each represents one chapter) are similar in tone as this article.
Another silly anti-union commentary predictable for a "Business Magazine" that more often than not sides with the interests of the business owners, not the workers.
And to Jurgn: anybody can write a book, the shelves are full of books praising George W. Bush, go figure. Only a moron can criticize unions and blame it for all the problems. If it weren't for unions we wouldn't have 8-hour work days, paid vacations or a day of rest on Sundays...
if everything was fair in this world, we would not have needed unions, greedy ceo's and shareholders would keep reaping the benefits of the workers and the companies still demanding more of its workers. the whole thing revolves around money. all i have ever wanted is to be treated fair and i have been a proud union member for 43 years.
If it weren't for unions all of my in-laws in Bangladesh, China, Vietnam, etc would not be making my shoes, etc that my uncles and cousins here in the USA used to make.
I understand the point of view of Boeing employees who are concerned about job security and the erosion of benefits. I'd be interested in hearing from Airbus employees about why they think their unions have been less assertive (or at least, that's how it has seemed).
Also, a note to those interested in Airbus: Check out additional coverage and discussion -- and add your own! -- on BusinessWeek's new BusinessExchange, www.bx.businessweek.com
hi everybody,my name is juergen as well,i am european,i agree with the other juergen
that its not the right time to battle now,because it seems to be that boing is facing more problems,see the
story,!!!!!!!!its always the same:
as management people play around with taktics,it becomes dangerous,and additional to that the weak dolar,which was downgraded by speculativ people,all
of that ends up in a tragical misery
dont go with that ,fight for your product with better education,and better technical knowledge,thats the answer,not a battle now
i live in brazil,here its more worth than over there,but only personal engagement helps to survive
juergen
It makes sense that the Union would go after Company B because it is in good shape. "You made money on my back so I deserve more now." If I am not mistaken, employees also make money and employment is at will, which means they can leave if unhappy.
I agree that unions where great to bring us to a certain point, but companies have gone about as far as they can go. Global competition also makes it even more challenging to offer people more.
I also do not like the greedy shareholder, greedy CEO, and greedy company comments. There are greedy people in everything all the way down to the shop floor, but that does not make every person greedy. We all have the option to be a shareholder of a publicly traded company. In the most recent quarter, Boeing has a 5.9% net. I can get a 4.00% return on my money in a high yield savings account.
Interesting comparison btw. workers of two intl' competitors....Actually, French are not that bad strikers;-)
Interesting comparison btw. workers of two intl' competitors....Actually, French are not that bad strikers;-)
I used to work at Boeing a few years ago.My brother still works there. Boeing is a good company to work for when times are good. Trouble is with this "new global economy" as the capitalists like to call it the work will go to places such as China, India, Thailand or even Africa as long as the people can do the work because the management of these companies look at the lower cost of labor and that is all they care about. But what they forget is that American workers are innovative and create new ways to save time and money whereas most other workers in other parts of the don't.
It's simple. Because French workers ALREADY HAVE the protections Boeing workers are striking for. Just because you take a snapshot in time of economic conditions, that doesn't mean is a fair comparison. Also unions can strike only at contract renegotiation, so timing should not enter the equation. To be fair, look at the total compensation/benefit package, index it for cost of living differences and see who really comes out ahead. Take in consideration unemployment benefits, health care, and so on. I don't work for Boeing nor am I in manufacturing. I believe in a good wage for a GOOD WORK day. But I'm sick and tired of biased and flawed comparisons.
Sooo the question is will boeing get the tanker contract even though they halted all production on the 787? Hah!
Wasn't that an article praising unions? A hard-core union in France is restraining itself not to harm the company! After all, as the article says, Airbus employees are not starving and their jobs are secure and even if not, they have a safety net. Contrast it with Boeing's employees where people get in deep trouble if they lose their jobs. All you can conclude is comparison how gracefully can European companies degrade in struggling business and how do American ones. In America everything is awesome as long as the business goes well.
The only reason AIRBUS is still in business is because the governments of France,Germany,Spain, etc have subsidized them!
The American public will not allow the largest defense contract, Tankers, to be built by the EU, for security reasons,etc! This is not protectionism, counterpart EU countries have declared "ONLY EU" solutions for their military options!
The Boeing unions need to accept Boeing's generous offer or they will break the companies back and end up on the street! The French don't have any better benefits, the cost of living is higher than the US and their health care doesn't compare to the US quality of care.
I guess where it most hits home is the fact that its because of Unions that the US has lost its competitive edge. Yes, greedy CEOs have a lot to do with the reason that unions are needed in the first place. However, there are certain instances in which the unionising force of the United States has been more detrimental than helpful and that is in producing cheap goods. No American in the US wants to do the menial low paying jobs and Unions exist to make sure that those who--were unwilling to learn during their educative years--still get paid outrageous wages that far exceed their productivity of labour. When a janitor gets paid $15 an hour, where do you think all the other low producing jobs are going to go? Most definitely abroad in countries which have a competitive advantage in cheap labor. Blame Unions for all the woes that the US is undergoing regarding foreign trade from outsourcing to uncompetitive prices in the global market.
Hi guys. The 8 hour work day concept might not be as directly related to unions as you may think. It has more to do with socialism and the British Industrial Revolution.
http://en.wikipedia.org/wiki/Robert_Owen
I can't say I'm in agreement with either side, the unions or Boeing, but from my perspective, a $25-$30 an hour job at Boeing is better than an $8-$10 an hour job at Wal-Mart. I've followed the Airbus paring of jobs now since it was announced and have to compliment their employees' understanding of who puts food on the table. I lived in Pittsburgh for the first half of my life and have seen firsthand what overly aggressive unions can do. Wake up, Boeing employees: Take what you were offered--which was pretty good--and forego filling out an employment app at Wal-Mart in 10-15 years.
The current strike situation makes really no sense to me. I don't know if hard for me to understand since I'm a recent new hire to the company, but if your company is have diffculties to the point where they have to work you for 12 hours a day to meet deadlines, why would you go on strike so that they will be forced to outsource and work you 14 hours a day. Those mechanics make very good money, get great benifits, and hold the key to Company B's future. My feeling is if you don't like it, then don't work there. If you find out that "this job is over working me", get a degree in another field (which the company pays for) and find another career where you don't have to work physically as hard. Or heres a though....take some vacation time. You have it so use it. I just can't believe how greedy people can be. I understand that times are hard and money is tight, but its not going to get better at your job if you take more money from the company then the company is earning off of you. That doesn't make sense.
My thought is...if you don't live in WA state and are subjected to the overtaxed properties, fuel, food and utilities you really don't have a TRUE perspective of the strike issues at hand. CEO's and execs still get their bonuses, over the top pay and retirement benefits and healthcare all at the expense of the worker B's. 11% over 3 years is a miniscule amount compared to the net worth and billions of dollars in orders Boeing still has to fill. The worker B's are the ones paying medical costs. You see everyone talks what a great offer the workers are getting but since they are NOT seeing the whole picture of the contract, you can't see that where they are willing to give on one hand they are taking it away with the other hand in pensions, healthcare benefits and the cost of living. If you aren't walking in these people's shoes then you REALLY CAN'T see the impact to them and their families. Come on, give them some slack!
I work for Boeing (salaried non-union) I certainly don't get 11% raises over 3 years or bonuses for signing a union contract. Out of over 160,000 company employees 26,000 think they deserve more of the pie. Well we all do, but we don't strike about it. If the union members think Boeing is such a bad gig then why don't they go work somewhere else? They won't because they know that working for Boeing is a good thing. (I bet all the auto workers who have lost their jobs in Detroit would love to work for Boeing.) The union members health benefits are the same as mine, their pension is better than mine, the only benefit I see that I make out better on is the 401k. I work in IT, Boeing has outsourced many IT jobs too, it's just the way the world is today with the global economy. If the union members are so worried about their jobs being outsourced why don't they take advantage of Boeing's outstanding education benefits (100% schooling paid for) and go get a degree & become one of the Engineers that design the planes or Business people that run the company?
I just started working for Boeing as a contractor of a staffing agency and it felt like a dream come true. I have been trying to get into Boeing for years because I have medical problems and no husband and no children. My parents work here; their health benefits are outstanding in comparison to other companies. So while the union has gone on strike, my dream may be shattered because of their utter selfishness. Here they are complaining about job security! If this strike continues where do you think Boeing will cut the fat first? Yep the contract workers which is me. Job security doesn't exist and as these strikers ask for more, I am at risk to lose a job altogether and may never get the chance to get my foot in the door. All I want is a chance at Boeing and now the Union is taking that away from me. So how's that for feeling things are not fair? The Union is a crock and so are the people in it. No one fights for me!
From page 1 of Boeing's 2007 Annual Report: "Operational Highlights...Achieved records for revenues, earnings, cash flow and backlog. Revenue rose 8 percent to $66.4B; net income grew 84 percent to $4.1B; cash flow rose 28 percent to $9.6B; and total backlog increased more than 30 percent to $327B." So, regardless of all the pundit's opinions, it seems odd that Company B claims to be down to it's last dime when negotiating wages & benefits for the very people who directly contributed to these billions.
Guillem, only a moron would believe that Unions are worth anything these days. The Unions originally came about earlier in the century and were brought forth to protect the worker from 18 hour work days, poverty-like pay, and no benefits. Now the Unions AND the workers are GREEDY - driving companies out of this country - making our only export WAR.
Ok FYI - just because Boeing's profit rose 84% does not mean that the worker should turn greedy. The worker thinks only of themselves and wants reassurances on job security? Anyone who wants a guarantee about job security knows that they themselves are on the chopping block. The only way the U.S. will ever get rid of Unions is when EVERYTHING is outsourced and there is no work here. Get rid of the Unions!
Nobody has mentioned the effect on local (no doubt other regions are effected, but I can only speak for the Puget Sound region)suppliers. Today we laid-off all of our temp/contract production employees because of this, and I know we aren't the only company to react this way. Non-Boeing employees lost or will lose their job! I am disgusted.
The 11% raise you are talking about is very misguided read the fine print!
To: Sharon
Why doesn't your company hire full time production workers?
For New at Boeing,
You're a Boeing Contract Worker employeed by a staffing agency, not Boeing. Boeing outsourced their hiring to the staffing agency, which employs you.
Mary,
No assembly mechanic or electrician at Boeing works 12 hrs day because they want too. It's mandatory due to the fact the vendors can't delivery their parts to the factories per schedule. Late parts, not built per specifications, adds time to rework to install. It's not fun having only 2 hrs of work to do, because they're are no parts to install. When the parts do arrive our great expediters/parts cribs can't locate/find them to delivery to the factory floor, parts are not per drawing resulting in rejection (we can't rework all of the vendor's parts due to warranty and cost issues). When we do get a good part it's days/weeks/months behind the schedule build plan to install, which causes up to 12 hrs it takes to get the parts installed. Boeing's production of planes doesn't stop due to late part/s. Each day that jet is getting closer to being complete. Try installing late part/s in a plane/s that is 50-99% complete. It add additional hrs to remove installed assemblies/parts/tubing/wires/panels/etc., install the late part/s, then reinstall the assemblies that got removed. The more the jet gets near completed, the more hrs it takes. Chances are it's not just one plane missing parts, it's the whole assembly line of jets missing parts.
For all the people that think the contract was such a great deal, what they are not telling you how much was taken away. Of course all they are going to say is what was offer to mislead the public, not what was really offer.It make you think. Every one was happy the way the contract was but when you start looking at the offer, and you see everything that was strike through that was being deleted make you wonder what going on. now if all the union were gone than you be back to 18 hour work days with no benefits, work until you drop who to protect you no week ends off, n o over time pay. No time off because your wife was having a baby, you, would die on the line no retirement.
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