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President's Corner
By Tom McCarty, SPEEA President

It's all about negotiations - still

I hoped I would be reflecting on the successful conclusion to the Puget Sound contract negotiations and the lessons learned by this time. Not only can't I do that, but now, I can't even report that the Wichita Engineering Unit (WEU) negotiations are on track. It looks like soon I will be wondering why the SPEEA Aircraft Manufacturing Pilots Association (AMPA) negotiations are stalled.

I am writing this a little earlier than usual because of the holidays. Maybe by the time you read this, all of our difficulties will be resolved – probably not.

Wichita engineers' negotiations
The WEU negotiations are having problems because of some expensive missteps Spirit AeroSystems management is trying to extricate themselves from at the expense of the engineering workforce. Management has also insisted on a 10-year contract with SPEEA. Based on their poor performance, I would not be very enthusiastic about their ability to forecast the future.

If Spirit management can get a good grip on the present, I think they could negotiate a fair contract with the WEU engineers. The engineers want Spirit to get back on track. Their customers are counting on them and there is a growing backlog of parts and assemblies that will provide work for decades. I hope management will recognize the talented workforce dedicated to Spirit's success, and let them get back to work rather than leave WEU engineers wondering how they are being treated.

Pilots' negotiations
I also want to briefly update everyone on the challenges facing our SPEEA-represented pilots. The AMPA bargaining unit just completed a very exciting year. Even before they reached their second anniversary of joining SPEEA, they have more than doubled their size.

AMPA pilots and instructors will negotiate a new contract in 2013 that will fully integrate the new members in the contract. The AMPA negotiation team, elected by the members, is preparing for negotiations. Unfortunately, it already looks like they have challenges similar to our other bargaining units in negotiations -- an apparent lack of understanding by management of the value they bring to the company. The pilots have already conducted a "no confidence" vote in their management.

These are not isolated instances. There seems to be a pattern of disregard for our contractual agreement. Five pilots, improperly laid off, were returned to work with full back pay plus interest. But management wants to continue giving AMPA pilot work to contractor pilots while fully qualified AMPA pilots are idle.

Root cause
I believe all of this has a common root cause. Management thinks we are a commodity. Management thinks we are interchangeable, and therefore our work can be outsourced to any place with workers who have basic required skills. Management also appears to believe inexperienced workers can produce the same output in the same amount of time as us. So if they have a lower labor rate, then the work will be done cheaper and a big savings will result.

I have heard a manager say that the delay and cost overruns of the 787 program due to outsourcing are an urban legend. What I have observed when management takes work away from the people who demonstrated their commitment to excellence because the other workers have a lower labor rate, the result is always the same. It takes longer and costs more to accomplish the same work. Management's ability to hide this fact is legendary. This is where creative cost accounting can really work for you. The simplest solution is to ignore the rework costs, including additional management costs, and voila – the part built in 'Faroffistan' is way cheaper than the one built in Everett. And it was 'worth the wait.'

Value of experience
Boeing initiated a provision in the new non-union healthcare plans directly related to what I have been talking about. If you need heart surgery, Boeing will fly you to the Cleveland Clinic. Why would Boeing offer that? It's really simple – the outcome. I didn't understand at first. I thought it was because they must be super cheap in Cleveland. I asked my wife, a physician, and she replied: "Oh yes, they are terrific at heart surgery. Because they do so many procedures, they are very experienced and get much better outcomes." You see where this is going. Boeing understands the significance of experience and the higher probability for a better outcome. I think I have made my point.

When we came back after the 40-day strike in 2000, a member asked me if I thought we might have to strike again. I said to him "not if we're smart, but I'm not so sure about management." I am going to do everything I can to avoid a work stoppage in 2013. But that will take a commitment from Boeing management to recognize the interests of their workforce. We can reach an agreement, but it will require management recognizing our SPEEA negotiations teams have seen no compelling evidence to convince us engineers and techs are a commodity which should settle for what management thinks is the watered-down market rate for our work.

My advice to everyone is don't accept any contract offer unless you truly believe it demonstrates management's commitment to recognize the value you bring and the success you have created for the company. You can vote NO, and we can continue the pressure. We can get the contract we have earned, if we stick together and stand up for what's right.