Wroblewski: Quit picking fights & partner with us

Machinists Union members are committed to the success of Boeing and the other companies they work for, District 751 President Tom Wroblrewski says in his column in the February edition of the AeroMechanic newsletter, which is now available online.

But at the same time, he tells the Union’s critics, “we insist that you acknowledge that the opposite is also true: Boeing cannot be profitable without the contributions of our skilled and experienced members.”

He called on Boeing management to “quit picking fights with us” and instead do what most of the companies the union has contracts with do — join with their own workers to form a mutually beneficial partnership. “We are the fundamental operating engine of the Boeing Co. and we don’t deserve to be treated like a squeaky loose fanbelt,” Wroblewski said.

Elsewhere in this month’s AeroMechanic you’ll find:

• A report on how a Union Business Rep won back pay that members working on the 787 at Boeing had coming after accepting temporary promotions;
• A profile of District 751 members in Central Washington who run the state’s largest landfill in Roosevelt;
• Highlights of a recent meeting with Washington legsislators in Olympia involving both District 751 leaders and top officials of the International Association of Machinists & Aerospace Workers;
• A report on how District 751 is helping win federal job retraining benefits for workers facing layoffs from aerospace jobs — even when those workers aren’t union members;
• Photos of Machinists volunteering for a wide range of community service projects, and taking part in Martin Luther King Day marches in Everett and Seattle.

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Union chief: 747-8, Machinists both ‘incredible’

The first flight of the 747-8 is a testament to the generations of Machinists at Boeing who have built the jumbo jet for 41 years, District 751 President Tom Wroblewski said.

“Today’s first flight of the 747-8 was very impressive,” said Wroblewski, who watched the first flight from Paine Field along with IAM&AW Aerospace Coordinator Mark Blondin. “The size, the speed, the power and the beauty of that plane are remarkable, and to know that our members put that plane together makes me very proud.”

In a statement posted on the union’s home page, Wroblewski noted that Union Machinists have been building the jumbo jets since the very first one took off from the same Paine Field runway, 41 years ago Tuesday.

Wroblewski praised Boeing workers for all they did to make the first flight possible — particularly those who are part of District 751. “The 747-8, and the Machinists Union members who build it, are nothing short of incredible.”

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Tanker: Northrop Glumbin’ probably won’t bid

Northrop Grumman has “made a tentative decision” not to bid on the U.S. Air Force’s tanker contract, according to the analyst most-knowledgeable about the Pentagon’s long-running procurement saga.

The problem, writes Loren Thompson of the Lexington Institute: their plane won’t fit, so they’ll have to quit.

EADS and Northrop Grumblin’ are offering a plane that’s significantly bigger than the KC-135s the Air Force flies now. Boeing, on the other hand, is offering a 767-derivative that could use the taxiways and fit inside the hangers already built for the KC-135s.

“When Northrop first entered the tanker contest, it hoped to convince the Air Force that a big plane with more range and carrying capacity was better suited to future refueling needs,” Thompson wrote this week. And when EADS won the last round of bidding, it did so largely because the Pentagon gave the two companies extra credit for having the extra size.

But this time around, the Pentagon isn’t giving that extra credit, and is putting more emphasis on cost as well. That hurts the EADS/Northrop bid because “the modified Airbus A330 that Northrop planned to offer is much more expensive than the 767 competitor Boeing plans to bid,” Thompsen said. “If both teams have to satisfy all 373 requirements and there is no extra credit for longer range or bigger fuel carriage, then price becomes crucial.”

Given that, Northrop’s new CEO, Wesley Bush, has pretty much made up his mind that it’s not worth it to pursue the tanker contract, Thompson said. Bush has “a mandate from his board to run a tight ship even if it means passing up big revenues because (profits) are too hard to quantify. That latter description certainly fits the tanker solicitation.”

A Northrop Grumman spokesman didn’t confirm Thompson’s account, but he certainly didn’t deny it either, saying the company was waiting to see the Air Force’s final request before making a decision.

But “without meaningful changes,” the spokesman grumbled, the Pentagon’s proposal “is not (one) to which Northrop Grumman can respond.”

It marks a stunning reversal of fortune for the EADS/Northrop team, Thompson notes. Certainly Airbus fans in Alabama seemed shocked. Mobile Press-Register political editor George Talbot called it “a heartbreak for Mobile, which could see its shot at a $600 million aircraft assembly plant vanish in the Mobile Bay breeze.”

And in Wales — where much of the wings fabrication work for A330s is done — local leaders are worried about the impact of losing the work, which would be worth just about $8 billion.

Sen. Richard Shelby (R-Airbus) called the Pentagon bidding process “a sham” and declared that the Obama administration had decided to slant the competition in Boeing’s favor — not because the Boeing plane is more affordable and better suited to the mission at hand – but because the president is from Chicago, and so is Boeing’s headquarters.

“Remember where they’re from,” Shelby told a pro-Airbus audience in Mobile.

All this is certainly good news for Boeing, and for the skilled and experienced District 751 workers who would build the tankers in Everett. (As opposed to the yet-to-be-trained workers who would assemble Airbus parts shipped from France in a not-yet-built factory run by a never-before-tried joint venture under the EADS/Northrop plan.)

Or is it? Thompson warned that Boeing could face a political backlash if Northrop fails to bid, and either Congress or the Pentagon views Boeing’s subsequent bid as being too high.

“So what looks like a windfall could easily become a trap,” Thompson warned. “Boeing execs will have to think through how to assure the program is profitable without getting more controversy in the bargain.”

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Study: Union workers earn more

Union workers in Washington earn an average of $3.05 an hour more than their non-union counterparts, a new report by the Center for Economic and Policy Research says.

In addition, there’s a 20-percentage-point gap between Washington’s union and non-union workers when it comes to having company-paid health insurance benefits, and a 30-point gap in the percentage of workers who have a company-sponsored retirement plan, the study found. In both cases, union membership had its advantages.

Those are among the findings of the center’s new national report titled “The Unions of the States,” which was compiled from federal survey data taken from 2003-09.

“The union presence varies across states, but unions substantially raise wages and benefits for workers in every state,” said John Schmitt, the author of the report. He is a senior economist for the center, which is based in Washington, D.C.

In Washington, the difference was clear:

• Average pay for union workers statewide was $24.25 an hour, compared to $21.20 an hour for non-union — a difference of 14.4 percent each paycheck, or more than $6,300 over the course of a year;
• 81.7 percent of union workers have company-provided health insurance, compared to 61.3 percent of non-union workers;
• 78.6 percent of of union workers had company-sponsored retirement plans, compared to 48 percent of non-union workers.

Some 21 percent of all Washington workers are union members, according to the report. That’s the fifth-highest percentage nationwide. (New York was first at 26.4 percent.)

But — likely as a result of the union influence – Washington workers have better pay and benefits than the national average, whether they belong to unions or not. On a national basis, the center found that:

• Average pay for all American union workers is $23.64 an hour, while non-union workers nationwide average $19.77 an hour;
• 80.1 percent of union workers nationwide have company health insurance, while only 55.8 percent of non-union workers do;
• 76 percent of union workers nationally have company-sponsored retirement plans, compared to only 45 percent of non-union workers.

To prove the point, here are the comparison figures for South Carolina, where only 4.9 percent of the workforce belongs to unions — the second-lowest percentage in the nation (behind North Carolina at 4.1 percent):

• Average pay is $21.39 an hour for union workers and $17.75 an hour for non-union;
• 80.5 percent of South Carolina’s union workers have employer-provided health insurance, compared to 55.7 percent of non-union workers;
• 70.7 percent of the state’s union workers have employer-sponsored retirement plans, compared to 45.1 percent of non-union workers.

The study also looked at education levels, and found that union workers in Washington are less likely to be high school dropouts and more likely to either be college graduates or to have at least some college training, compared to national averages.

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Israelis may convert old 767s into tankers

Israel Aerospace Industries is moving ahead with plans to convert used 767 passenger planes into military cargo and refueling jets, Flight Global reports.

IAI is in talks to sell one or more of the converted767 tankers to the Israeli air foce, Flight reports from the Singapore Air Show. But reports last year suggested that IAI’s Bedek Aviation Group already had lined up its first buyer — an unidentified Latin American air force (believed to be Colombia).

Under IAI’s business plan, used 767-200s would first be converted into military cargo jets, and then outfitted with a centerline refueling boom, thus allowing them to fly tanker missions.

This converted 767 passenger jet has several advantages as a military tanker, according to IAI’s marketing types:

• Since Bedek holds a Federal Aviation Administration supplemental type certificate to convert 767-200s into cargo jets, the plane can take off and land at civilian airports around the world;
• The converted plane uses a modular design that allows users to quickly swap out components, so that the planes can be switched for use as tankers, freighters or personnel transports (not unlike the Boeing 737-400C combis that Alaska Airlines flies) – which it sees an advantage for a small air force;
• Because the conversions use readily-available, used civilian airframes, they’re far cheaper than the new, purpose-built tankers that Boeing and EADS/Northrop Grumman propose building for the U.S. Air Force.

“Buying a new one, we believe, is a waste of money,” an IAI executive told Flight.

IAI and its Bedek subsidiary have some experience in the tanker modification business, having now converted eight 707s for the Israeli air force (shown in the photo). IAI is also studying a tanker based on the Gulfstream G550 business jet.

District 751 leaders would point out, however, that nobody on the planet has more experience building tankers than the Boeing Co.

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Nellis AFB contractors join IAM&AW in Nevada

More than 250 civilian employees at Nellis Air Force Base outside Las Vegas are enjoying better pay and benefits thanks to their membership in the International Association of Machinists & Aerospace Workers.

The workers — employees of Computer Services Corp. — voted to join the union back in November. Their first contract takes affect this month. Under it, they’re getting:

• A 4-percent wage increase this year, to be followed by 3.5-percent raises in 2011 and 2012; the raises come on top of pay increases the workers already received to bring their pay in line with regional standards;
• Increased medical benefit payments, plus the option to cash out a portion of their benefits, rather than spend it on health care;
• An improved vacation schedule, better sick leave terms and improved overtime rules. 

The new IAM members work at Nellis Air Force Base, which is one of the nation’s largest. It’s home to two of the U.S. Air Force’s most-high profile programs: Red Flag – the Air Force combat training school, which puts American fighter pilots and their allies into simulated battles against a resident squadron of “adversaries” — and the U.S. Air Force Air Demonstration Squadron, which is more commonly known by its nickname, the Thunderbirds.

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A future for 787-3? Boeing says that’s ‘far fetched’

Boeing is about to pull the plug on its short-range 787-3, which — as we discussed previously – has no buyers now that launch customers All Nippon Airways and Japan Airlines have opted for longer-range 787-8s instead.

“The 787-3 that had a shorter wingspan was designed for Japan and now there are no customers,” said Boeing Blogger-in-Chief Randy Tinseth, who briefed reporters this morning at the Singapore Air Show. ”It will be far fetched to say that we will proceed with the 787-3.”

“It’s my guess that it won’t be part of our product offering in the future,” he added.

As we discussed last month, the 787-3 could end up being one of the most-important airplanes never built. It was a key to launching the program; without it, ANA and JAL weren’t all that interested the Dreamliner, Boeing executives said at the time. The Japanese airlines were the two biggest buyers in the first year of the 787 program, placing orders for 80 of the first 110 planes sold — and of those, 43 were for Dash Threes.

But no other orders followed, which led Boeing to put the variant on the backburner. With ANA and JAL switching to 787-8s, it’s likely never to get off it.

Among the other highlights from Tinseth’s press briefing:

• Boeing won’t announce any commercial jet orders at Singapore, although there’s speculation Boeing could land an order to sell fighters to India. Tinseth said the company believes we’re reaching the bottom of the cycle, in that fewer airlines want to cancel or defer orders. It’ll be awhile before new orders pick up, however.
• The company reaffirmed its commercial jet production plans for 2010 — 737 staying at its current record rate of 31-a-month, 777 rates slowing down mid-year from seven to five a month, and planned increases on the 747-8 and 767 lines on hold for now.
• Boeing is seriously investigating new 737 engines, and is beginning a hard look at ways to update the 777.

Tinseth went out of his way to downplay reports of tension between the U.S. and Chinese governments over proposed arms sales to Taiwan; China has threated to levy sanctions on Boeing should the deal go through. 

Tinseth called it “a government-to-government issue … and we cannot control them.” He added that “it’s too early to speculate on what the impact might be to the industry and to us.”

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Machinists vow new approach to talks with Spirit

Leaders of the International Association of Machinists & Aerospace Workers are calling for a new approach to upcoming contract talks with Spirit AeroSystems in Wichita.

“It is time to move beyond the old ways of bargaining that have been used since the 1930s,” said IAM&AW President Tom Buffenbarger in a letter to union members. “We must find ways to move forward where both the company and the workers benefit together, neither one profiting at the expense of the other in adversarial roles.”

This new approach is being embraced by Spirit’s management, The Wichita Eagle reports. Spirit CEO Jeff Turner has circulated a memo among the company’s top leaders that says both sides are committed to a process that makes “this company healthy and keeps our team for the future intact … We are true partners with the IAM in achieving these goals.”

The contract between Spirit and the roughly 6,000 members of Local Lodge 839 in Wichita expires on June 25. However the union bargaining team has already met for training, and part of that included preliminary meetings with Turner and Spirit’s vice president of labor relations, Sam Marnick. Turner was in charge of Boeing’s Wichita operations before the company spun them off.

Spirit is a key supplier to Boeing’s operations in Puget Sound. It supplies the fuselages for the 737 program and builds almost all the cockpits used on all Boeing commercial jets. Local Lodge 839 is part of IAM District 70, which also includes about 600 members who work in Boeing’s Defense, Space & Services division in Wichita.

Both sides said they are exploring a completely new collective bargaining model that would protect the interests of IAM members while bringing long-term stability to employment and production. The two sides are not revealing details at this point, but if successful, the union says, it will mean no more business as usual.

“What we do here during the next six months will chart the course for this industry, our members and our nation for years to come,” Buffenbarger said. “We must organize and work to save and grow jobs in America, instead of in China and Mexico. We’ve lost too many jobs to runaway companies. While we still can, we must save the aerospace industry.”

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SpiceJet could buy more 737s

Low-cost carrier SpiceJet is in the market for new airplanes, as it considers expanding its route network outside its home base of India.

SpiceJet’s chief commercial officer told Dow Jones Newswires that the airline is in talks with both Boeing and Airbus about new jets.  “We are evaluating the future,” he said. “We have not taken a decision. It is at a very preliminary stage.”

SpiceJet launched in 2005, and currently operates a fleet of 19 737s – a mix of -800s and -900ERs — all built in Renton by District 751 members. The airline has nine more ‘Three-Sevens on order.

SpiceJet hopes to win Indian government approval to expand its route network into Nepal, Bangladesh, the Maldives and Sri Lanka.

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Machinists drive Boeing to production records

District 751 Machinists at Boeing built and delivered record numbers of 737s and 777s in 2009, helping the Company’s Commercial Airplanes group deliver its greatest-ever revenues.

The Boeing Co. would have turned a profit of roughly $3.8 billion in 2009, executives said, if it hadn’t been for delays and cost over-runs on the 787 and 747-8 programs – delays caused largely by Boeing’s unwise reliance on an outsourced global supply chain.

However, the fact that Boeing was still able to turn a profit of nearly $1.3 billion in the midst of the worst global financial crisis since the Great Depression is a testament to the men and women of District 751, Union District President Tom Wroblewski said.

“There was a lot of talk last year about how Boeing couldn’t be successful in Puget Sound, and how our Members were somehow to blame for that,” Wroblewski said. “But one look at the financial statements shows what the truth is – our Members generate revenues and drive profits.”

Boeing workers in Renton built and delivered 372 737s in 2009, which was a record, the Company’s chief financial officer, James Bell, told Wall Street on Jan. 27.

Those planes have an average list price of around $69 million apiece – although with discounts, customers typically pay closer to $46 million. Even at the discounted price, the efforts of District 751 Members in Renton resulted in almost $17.3 billion in revenues.

Meanwhile, the 777s delivered from Everett have an average list price of around $249 million – or roughly $174 million after discounts. That makes the value of the 88 planes built and delivered by Machinists there something close to $15.3 billion.

Based on the timing of most airplane contracts, Boeing would have received about 60 percent of the payment for those planes when they were delivered last year – perhaps about $20 billion, in round figures.

Across Boeing’s Commercial Airplanes business, total revenues increased to just over $34 billion, Bell told stock analysts.

Looking ahead, Boeing CEO Jim McNerney told Wall Street that the Company will go ahead and cut back production on the 777 in mid-year, as previously announced. But 737 production will remain at the current record-setting rates “into the foreseeable future,” he said. Boeing is also actively studying whether to offer new engines for the 737, and looking at further 777 upgrades as well.

Boeing faces steep challenges in 2010, namely getting the first 787s and 747-8s certified and delivered, McNerney said.

But while “the challenges ahead are significant, I believe we have the people and the resources we need to be successful,” the CEO said.

Wroblewski agreed – at least as far as IAM 751 Members are concerned.

“No one else has the skills and dedication Boeing needs to accomplish these goals,” he said. “We are the fundamental operating engine of the Boeing Co.”

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