Gordon King, president of the local International Association of Machinists District 837 union, is a difficult guy to figure out.
In early January, King told a Seattle radio station that he would not present a Boeing contract offered to workers in the state of Washington to machinists in St. Louis because it called for changes in retirement benefits and other concessions. “I would not present that to my membership, no,” he said.
When asked why, King replied, “'Cause they would not take those concessions.” He said his union had already given concessions on retirement benefits for new hires. He also said 777x jetliner production belonged in Washington.
A day later, King said he and his management staff was “prepared and ready to sit down with Boeing” and discuss production of the plane if Washington machinists rejected a final contract offer. The contract was narrowly approved, and production will remain in Washington.
Fast-forward to this past weekend.
King had given the OK to a contract offer from Boeing to local machinists that included workers shifting from a defined pension to a 401(k)-style retirement benefit system on January 1, 2016. This was the sticking point in the Washington labor battle. On Sunday, on the machinists’ website, King wrote: “Our members have voiced their approval of this offer with 1,269 votes to accept and 449 votes to reject. I want to thank the bargaining committee for their hard work and dedication. I also want to thank our members for making their voices heard. I am very pleased with how our members conducted themselves during this contract extension vote.”
It seems like King didn’t like the Seattle deal, but was good with a similar deal for his workers in St. Louis. Both of the packages in Washington and St. Louis include raises for workers and could clear the way for future work for union employees.
Here is something for all Boeing machinists—and other union employees—to consider, now that they have approved contracts that change defined pensions: Boeing delivered a record number of jetliners in 2013, and net profit for the fourth quarter set a record. Net income in that quarter rose to $1.23 billion, a 26 percent jump over the same quarter of 2012. (It should be noted that the day these results were announced, Boeing stock actually slipped 5.33 percent because analysts felt the 2014 profit predictions weren’t as high as predicted.)
According to the Center for Effective Government, Boeing also paid no income tax last year. ("Boeing disputes the report’s findings, saying its federal tax rate was actually 26.4 percent last year," notes the Huffington Post. "Chaz Bickers, a Boeing spokesman, said the analysis ignores a crucial part of the company's tax expense.") According to the Center for Effective Government’s analysis, Boeing reported an $82 million tax refund last year, and it reaped $5.9 billion in U.S. pre-tax profits during the same period. Boeing paid a federal tax rate of -1.4 percent, while it won 4.4 percent of all federal contracts.
Wow.
Commentary by Alvin Reid