The Machinist Union Members narrowly approved Boeing’s proposed contract and sealed the deal that future 777x will be manufactured in the Puget Sound area. Boeing guaranteed that the composite wing, the most advanced part of the airplane, stays here.
The focus of the disagreement is retirement. Boeing proposed to switch to 401k, only for new members, and away from pension programs. Pension programs brought down GM, city of Detroit, and many mighty institutes. For the past 30 years, fewer and fewer workers in the US have that. Everyone, it seems, has moved to 401k.
Economically, they are exchangeable. One can compute the net worth of their pension program into a single “present day value.” Then the same person can formulate a new wage so that he/she will receive the same benefits during the retirement years. This calculation is complicated but very doable. The key issue is the risk.
The pension program is guaranteed and 401k depends on the performance of the investment. Maybe those Machinists are not savvy enough investors to stomach the risks. It is therefore not about economy, it is about emotions.
The fact is unions have weakened in the US for decades. Many states have legislated “Right to Work” laws that gave people the option not to join the union. When Kid was working at her university, she was not happy that an union fee was deducted from her paychecks without her consent. Union fees was the same as taxes for her. Had she worked for a “Right to Work” state, she would opt out and keep the union fees to herself. This means fewer and fewer members.
Boeing’s union leadership knew about their weakening and chose to fight for the union’s survival, even against the interest of the union members. There is no conceivable logic against the contract. It affects only new members, guarantees the jobs for decades to come, and stabilizes the regional economy. No one’s pension need to be saved, since none were endangered.