Boeing and Unions—an Industrial Crash Landing

Boeing had an inspirational history in Seattle. Founded on July 15, 1916, by William Boeing in Seattle, Washington, it took 102 years to all but fall out of the skies. It may survive, but management has done all it could to ruin a once-proud reputation. The source of this quote depends on who you ask, but the truism is success has many fathers, but failure is an orphan.

No one will stand up and take the blame for this fiasco.

But all great stories have beginnings and ends

Bill Boeing was a lumberman before he took an interest in airplanes, which is the why of the company being founded in Seattle. Lumber country. But he was among the first industrialists to grow by merger and acquisition, and he was very skilled in the process, buying up competitors and airlines as well. Production and sales in one commercial basket that captured the ultimate consumer.

If there is a zenith to all this upward climb, it’s probably the fact that what goes up must eventually come down and the peak likely occurred with the McConnell Douglas merger and the corporate move to Chicago in 2001. Moving corporate 1,700 miles from the world’s largest production facility under one roof seems strange to me, but maybe Chicago has better restaurants and business contacts. Who really understands the workings of corporate boards?

Anyway, the McDonnell Douglas merger was completed in 1997, with three caveats insisted by the European Commission, which you may recall has a very close interest in the health and welfare of Airbus, Boeing’s main (and only) viable competitor in the commercial market. First, termination of exclusivity agreements with three US airlines. Second, separate accounts maintained for the McDonnell-Douglas civil aircraft business and third, some defense patents made available to competitors. Guess who?

The beginning of the end occurs in South Carolina

(Disclaimer) I believe in unions, although my profession never had one. My prejudice is that Ronald Reagan began the decline and fall of unions in America when he busted the air-controllers’ union as his first act as president. I make the case that America’s production base fell in direct relation to union decline, hollowing out the core of the American middle class and replacing well paid jobs with mindless consumerism.

Moving on,

(Wikipedia) In 2011, the National Labor Relations Board filed a federal complaint against Boeing stating that the company broke the law retaliating against Boeing workers in Washington for exercising the right to strike. South Carolina’s low unionization rates, the lowest in the country at 2.7%, were stated by Boeing management as a reason to transfer production to there.

Since then, Boeing has continued to challenge the rights of unions to organize at the plant, and is alleged to have fired workers for their attempts to unionize.

Okay, that’s pretty straight-forward. The interesting thing is what Boeing workers from the South Carolina plant have to say about the planes they’re producing.

NYTimes, 4-20-2019 (excerpts) — When Boeing broke ground on its new factory near Charleston in 2009, the plant was trumpeted as a state-of-the-art manufacturing hub, building one of the most advanced aircraft in the world. But in the decade since, the factory, which makes the 787 Dreamliner, has been plagued by shoddy production and weak oversight that have threatened to compromise safety.

A New York Times review of hundreds of pages of internal emails, corporate documents and federal records, as well as interviews with more than a dozen current and former employees, reveals a culture that often valued production speed over quality. Facing long manufacturing delays, Boeing pushed its work force to quickly turn out Dreamliners, at times ignoring issues raised by employees.

Complaints about the frenzied pace echo broader concerns about the company in the wake of two deadly crashes involving another jet, the 737 Max. Boeing is now facing questions about whether the race to get the Max done, and catch up to its rival Airbus, led it to miss safety risks in the design, like an anti-stall system that played a role in both crashes.

And those, as we know (if we even remember) are what unions pay attention to when it comes to negotiated contracts. It’s not all about money and it’s one of the primary factors that made Seattle-built Boeing planes so trouble free.

Safety lapses at the North Charleston plant have drawn the scrutiny of airlines and regulators. Qatar Airways stopped accepting planes from the factory after manufacturing mishaps damaged jets and delayed deliveries. Workers have filed nearly a dozen whistle-blower claims and safety complaints with federal regulators, describing issues like defective manufacturing, debris left on planes and pressure to not report violations. Others have sued Boeing, saying they were retaliated against for flagging manufacturing mistakes.

Joseph Clayton, a technician at the North Charleston plant, one of two facilities where the Dreamliner is built, said he routinely found debris dangerously close to wiring beneath cockpits. “I’ve told my wife that I never plan to fly on it,” he said. “It’s just a safety issue.”

Never fly on a plane made under his technical purview. That says it all.

In an industry where safety is paramount, the collective concerns involving two crucial Boeing planes — the company’s workhorse, the 737 Max, and another crown jewel, the 787 Dreamliner — point to potentially systemic problems…

But workers sometimes made dangerous mistakes, according to the current and former Boeing employees, some of whom spoke on the condition of anonymity because they feared retaliation.

Faulty parts have been installed in planes. Tools and metal shavings have routinely been left inside jets, often near electrical systems. Aircraft have taken test flights with debris in an engine and a tail, risking failure. On several planes, John Barnett, a former quality manager who worked at Boeing for nearly three decades and retired in 2017, discovered clusters of metal slivers hanging over the wiring that commands the flight controls. If the sharp metal pieces— produced when fasteners were fitted into nuts — penetrate the wires, he said, it could be “catastrophic.”

And catastrophe came, but not by metal slivers. And not on little cat feet, but two major fatal crashes just months apart.

Mr. Barnett, who filed a whistle-blower complaint with regulators, said he had repeatedly urged his bosses to remove the shavings. But they refused and moved him to another part of the plant.

A spokesman for the Federal Aviation Administration, Lynn Lunsford, said the agency had inspected several planes certified by Boeing as free of such debris and found those same metal slivers. In certain circumstances, he said, the problem can lead to electrical shorts and cause fires. Officials believe the shavings may have damaged an in-service airplane on one occasion in 2012, according to two people with knowledge of the matter.

And Boeing was allowed by the FAA to perform its own inspections, as Congress had cut FAA funding, initiating a sort of fox and chicken-house arrangement.

The F.A.A. issued a directive in 2017 requiring that Dreamliners be cleared of shavings before they are delivered. Boeing said it was complying and was working with the supplier to improve the design of the nut. But it has determined that the issue does not present a flight safety issue.

“As a quality manager at Boeing, you’re the last line of defense before a defect makes it out to the flying public,” Mr. Barnett said. “And I haven’t seen a plane out of Charleston yet that I’d put my name on saying it’s safe and airworthy.”

Not a plane he’d put his name on.

Two fatal crashes, thousands of new planes uncertified and sitting on the ground unsold, airlines themselves fighting for survival, an industry unlikely to ever reach former volumes and a worldwide pandemic. What else for Boeing? Perhaps bankruptcy and government rescue as a national security matter for a primary supplier.

It’s not wholly a union issue. There were (and are) many other issues.

But the two primary catalysts were the Dreamliner as less that a dream and the 737 Max crashes. Both planes were built in South Carolina and BoeingSC is their only non-union production facility.

It was designed and built to be non-union to save money. Well, I guess it saved money, but it certainly did not save lives and may not save the company.

Image Credit: USA Today

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