Boeing machinists are in the fourth week of their strike with neither the giant aircraft maker nor the International Association of Machinists and Aerospace Workers (IAM) making any moves toward a resumption of negotiations. There have been no formal negotiations since the strike began September 6.

Boeing’s chief executive officer, Jim McNerney, said last week, “We’re at a standstill now,” adding that the two parties had been unable to find “common ground” even to begin discussions. A walkout by Boeing machinists in 2005 lasted 28 days.

Over 27,000 Boeing workers are on strike in the states of Washington, Oregon and Kansas over wages, health care benefits, pensions and job security. Boeing has not budged on what it calls its “best and final offer,” which the machinists rejected by 80 percent September 3. Workers approved the strike by an 87 percent margin.

Boeing is seeking to retain its virtually unlimited right to outsource and conduct off-shore production, a concession it gained from the union in the 2002 contract. Last week McNerney told the Chief Executives’ Club of Boston that Boeing’s outsourcing strategy was a “management rights” issue. In other words, management must retain unrestricted power to replace workers with cheaper labor in order to boost returns for Boeing’s big investors and top executives. 

Over the last decade Boeing has slashed the number of IAM jobs by over half, from 60,000 to 27,000. At the same time, due to sharp increases in productivity, more planes than ever are being built.

Rank-and-file workers have expressed their determination to overcome management’s intransigence, even though they face economic hardship, which is hardly mitigated by the $150 in strike benefits they began receiving this week. For its part, however, the IAM bureaucracy is only asking to implement pre-2002 conditions, when the union had the opportunity to bid on most of the work the company proposed to outsource.

In practice this means the IAM will collaborate with management to cut wages and benefits and gut working conditions in order to underbid outside contractors. In return the IAM leadership would be able to maintain a minimum number of dues-paying IAM members, even if they worked for near poverty wages.

Many workers make less than half of the standard wage of $27 an hour due to previous concessions. The company, which has made $13 billion in after-tax profits since 2002, is only offering an 11 percent wage increase over three years, which would amount to a substantial cut in real wages due to inflation. The union has asked for a 13 percent increase over the life of the contract.

Boeing officials and corporate analysts have pointed to the downturn in the economy, tighter credit markets due to the financial crisis and projections of sharp declines in air travel to justify their concession demands. Immediate concerns about the impact of the financial breakdown center on International Lease Finance Corp., the world’s largest aircraft leasing company and a unit of the recently rescued American International Group Inc. In return for the $85 billion bailout by the Federal Reserve, AIG pledged all its assets as collateral.

A MarketWatch article noted, “The potential for a collapse of American International Group, which the Federal Reserve seized on Tuesday night, had raised the specter of dragging down the entire aerospace industry.”

The article quoted Henry Harteveldt, an analyst with Forester Research, “If [IFLC] becomes consumed by AIG’s problems, it may not be able to maintain the same purchase terms and financing terms with its banks and lenders and manufacturers,” he added, “That may force them to cancel orders, and that could have a huge impact on Boeing Co. and Airbus.”

According to a September 24 posting by Bloomberg.com, Los Angeles based ILFC “was borrowing $6.5 billion in emergency funding to meet obligations through the first quarter of 2009.” ILFC is one of Boeing’s (as well as Airbus’s) largest clients, with a current order for 102 airplanes.

There is growing opposition to job-cutting and concession demands from aerospace workers internationally. Two weeks ago, hundreds of Airbus workers carried out a two-hour strike in Toulouse, France to protest restructuring plans that will eliminate 10,000 jobs throughout the country.
This only underscores the reactionary character of the nationalism promoted by the IAM. For months the union campaigned, along with Democratic presidential candidate Barack Obama and other politicians closely aligned with Boeing, to overturn a US Air Force decision to award a refueling tanker contract to Boeing’s competitor, Northrop Grumman and its European partner EADS, the parent company of Airbus. The campaign was used to promote illusions that Boeing workers had the same interests as the corporate owners and to drive a wedge between US and European aerospace workers.

Meanwhile, Boeing and the engineers and technicians union, the Society of Professional Engineering Employees in Aerospace (SPEEA), have traded proposals for a new contract. SPEEA represents 21,000 workers in Washington, Oregon, California and Utah.

SPEEA last struck Boeing in 2000 for 40 days, its first strike ever other than a largely symbolic protest strike during contract negotiations in 1992. On its web site SPEEA states that it will be seeking a 10 percent wage increase yearly, an improved cost-of-living formula and health benefits, and to maintain the traditional pension for new hires. Similar to the machinists’ opposition to outsourcing, the engineers union is seeking to limit the use of contractors.

Ray Goforth, SPEEA executive director, described Boeing Vice President Mike Denton’s presentation at a September 17 steering committee meeting as a “platform that articulated their intent to pursue takeaways in benefits, remove the pension for new hires and outsource more work.”