In another time, my colleague Dominic Gates’ interview with Boeing Commercial Airplanes CEO Jim Albaugh might have meant more. For example, Albaugh’s statement that Boeing would rather be here, if only it can avoid strikes and see “moderate” wage demands from unionized workers.
But, as Boeing has reminded us endlessly, it is a global company driven by rapidly changing competitive realities. It is also an American public company, fully steeped in the ethos that it’s primary allegiance is to its shareholders, most of whom are large institutions with no loyalty to anything but short-term results. And this is McBoeing, Boeing in name but McDonnell Douglas in its executive culture, with a heavy helping of Jack Welch’s management style, of which trueheartedness to employees and communities is not a priority.
So take it for what it’s worth. When the machinists’ contract comes up in 2012, Boeing can pretty much demand what it likes. It won’t matter how profitable Boeing is, or how much of a cut top executives are taking. Union foes will cheer, and certainly the timing of the 2008 strike was ill-advised. Ironically, of course, many of the loudest union-bashers are part of the middle class rapidly seeing its living standards erode from a globalized world of surplus labor and excessive corporate power…and they blame unions.
Unions have their own issues. These can include differences between the rank-and-file and leaders, as well as conflicting goals between older and younger workers. Giving up the strike weapon is a difficult move for any union, taking away its strongest bargaining tool. Unions can’t compete with major corporations in the PR division, or in the ability to influence public policy (what Card Check legislation?). But worrying about the ability of workers to organize and bargain is so 1950…when America also had the strongest economy on earth.
Much can change in two years. About the best scenario we can hope for is a very slow recovery with continued high unemployment. Oil prices will be an ongoing wild card. The Wall Street mischief in Greece is a reminder that the risks of a double-dip recession remain. None of this provides predictability for Boeing or its customers. This is not a typical business cycle. Many of these troubles are secular in nature. If inflation remains this low, Boeing might be in a position to demand what are in reality give-backs. If the health care system remains broken, token wage increases won’t make up for staggering increases in health costs for workers. In addition, because a slow-growth economy becomes even more of a zero-sum game, expect South Carolina and other Southern states to compete heavily for any new Boeing projects.
After the South Carolina move, Boeing has everyone’s attention here. And the region will do everything it can to please this crown jewel of high-paying jobs. I hope Albaugh can be true to his word. But the world doesn’t work that way any longer.
Today’s Econ Haiku:
Wrap your own darned gifts
Here at Macy’s we’ve been packed
By Wall Street’s demands