Image:Boeing Machinists union members count votes
Stephen Brashear  /  AP file
Boeing Machinists union member Michael Olebar of Shoreline, Wash., dumps ballots on the table of fellow union members Karla, left, and Patrick Kingsella of Kirkland, Wash.
By
msnbc.com contributor
updated 11/3/2008 11:12:00 AM ET 2008-11-03T16:12:00

The verdict is still out on who exactly won the Boeing Machinists strike of 2008, but it has nonetheless given a shot in the arm to a weakening organized labor movement in America.

“This is not a case where the union caved, even in these times with this type of job market and national pressure,’’ said Philip Dine, an expert on labor relations and author of “State of the Unions.’’ “This strike showed that labor can still hold its own.”

Members of the International Association of Machinists and Aerospace Workers ratified a new four-year contract Saturday that they say gives them improved job security language — a key issue that kept members on the picket line for eight weeks.

As some of the members of Boeing’s largest union began packing up their picket signs and preparing to start building commercial airplanes again, labor talks with the company’s second-largest union — SPEEA — moved into the final phase of contract talks on Wednesday.

Negotiators for the company and the Society of Professional Engineering Employees in Aerospace convened in a hotel outside Seattle to negotiate a deal they hope can be presented to the white-collar union's membership by mid-November.

Leverage for SPEEA
The ongoing talks cover two SPEEA contracts, both of which expire Dec. 1. One covers about 14,000 scientists, engineers and other professionals with average salaries of about $83,000 and the other covers nearly 7,000 manual writers, technicians and other hourly workers paid an average of $68,000. About 550 are in Utah, California and Oregon and the rest are in the Seattle area.

Labor experts believe the Machinists strike, which was closely watched by industry groups nationwide, strengthened the union and gives SPEEA even more leverage in talks for its own labor pact. Job security and outsourcing of design and engineering work are key negotiating points in the ongoing talks.

The pressure is now on Boeing, which lost about $100 million in revenue a day from the Machinists strike, to reach an accord with SPEEA and avoid another costly walkout.

The Machinists strike, which began Sept. 6, has also further delayed the new 787 Dreamliner, which already is at least 15 months behind schedule and was supposed to fly for the first time in November. On Oct. 22 Boeing said third-quarter profit dropped 38 percent, more than analysts projected.

As the labor movement across the country has seen membership and leverage decline in recent years, the Machinists walkout was widely viewed as a far-reaching fight for labor in all manufacturing sectors.

Unlike other smaller and less-militant unions nationwide, Boeing’s Machinists flexed its solidarity muscle, proving to the country that there still is ground to be made in the area of job security.

While Boeing didn’t give away the farm, it did rewrite job security language allowing the company to use contractors for the delivery of aircraft components to assembly lines, but giving union workers responsibility for those components once they enter the factories and to oversee their delivery to their final destinations.

“Labor’s biggest problem is that people question their relevance. This (Machinists strike) raises the profile and lends legitimacy of unions,’’ Dine said.

He added, however, that Boeing’s unions are unique. While the nation’s failing economy has cost many unions their clout, Boeing’s unionized engineers, electricians and assembly workers had unusually strong leverage because they are skilled laborers working for a profitable company in a critical industry that has huge demand for its products both in defense and commercial aviation.

Boeing, among the world’s largest maker of commercial airplanes, recorded a record profit of $4 billion last year and has a record $300 billion worth of commercial plane orders in its books. Revenues for 2007 rose 8 percent to $66.4 billion.

Strained relations
While the company appears to be weathering the global financial crisis that hit during the strike, analysts say there is little hope for improved relations between the company and its Machinists union.

Some predict the strike could backfire, landing a potentially fatal blow to an already battered relationship between Boeing management and its union.

The walkout by the IAM was the longest in 13 years and the fourth at Boeing in 20 years. The union struck for 48 days in 1989, 69 days in 1995 and 28 days in 2005. In 2002, a contract was adopted by default, as it was rejected by workers but less than two-thirds of them approved a strike.

Richard Aboulafia, an aerospace analyst with the Teal Group in Fairfax, Va., predicts Boeing will eventually pull up its commercial airplane stakes in Seattle and follow in the auto industry’s path to Southern states with weaker unions and right-to-work laws that diminish union power.

Despite Boeing’s 92-year history in Seattle, the company moved its headquarters to Chicago in September 2001.

Because Seattle has a much more diverse economy than it did 30 years ago when everything revolved around Boeing, the city won’t wind up like Detroit after the automakers left. But he said a departure from Seattle would still hurt the economy and future generations of manufacturing workers.

Analyst Joseph Campbell, with Barclays Capital, agrees. “Boeing is now more likely than less likely to take work out of the Pacific Northwest and put it somewhere else where they think people will be more grateful,’’ he said. “It’s not vengeful — just business.”

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