A Boeing 787 Dreamliner taxis after its landing at Le Bourget airport, east of Paris, upon its presentation for the first time at the 2011 Paris Air Show.Francois Mori/The Associated Press
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
It’s not often you hear an expression of love for a corporate entity, especially when it comes from a union leader in the middle of contentious contract negotiations.
That’s doubly true when the object of affection is Boeing Co. BA-N, the once-respected symbol of American innovation and integrity whose fall from grace has been swift, messy and at times tragic. Considering the commercial aviation giant’s problems over the last few years, it’s been a while since the company felt anything but ire from internal and external stakeholders.
Yet Boeing’s major union, the International Association of Machinists, is now using the L-word in a bid to win a board seat by painting a good-guy, bad-guy picture of its commitment to the company compared to that of the current slate of directors.
“We love the Boeing Company,” Jon Holden, president of the Boeing local, told CNN last week. “It’s the people on the board who don’t. They sacrificed its integrity.”
Sadly, for the hundreds of people who perished in recent crashes of Boeing aircraft and their families, Mr. Holden is right. And the union’s bid to get a representative on the Boeing board as part of intense contract negotiations isn’t as unreasonable as it may sound to some, especially considering the company has not stopped the bleeding – and doesn’t appear to be in a position to stop it any time soon.
Unless Kelly Ortberg, who just became Boeing’s chief executive on Aug. 8, can pull a rabbit out of his hat to bridge the abyss with the union by offering incentives such as stronger job guarantees, the problems at the company will continue to compound,
Mr. Ortberg needs some magic, and he needs it quickly. The pending strike by 32,000 unionized machinists, which could happen when the contract deadline runs out Thursday, could further cripple the plane maker. Boeing is already woefully behind in fulfilling aircraft orders for airlines because of highly publicized safety and quality issues with its manufacturing process.
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That process, institutionalized under former CEO Dave Calhoun, who was turfed earlier this year, relied heavily on the outsourcing of work, which has been blamed for compromising quality-control measures. And because Boeing is a major player in a global duopoly – Airbus is the other – there has been little competitive impetus for the company to improve, even as lives have been lost.
The results of this cost-driven complacency by the board and senior management were major problems with Boeing’s 737 Max 8 and Max 9 commercial jetliners, including two crashes and several serious mid-air incidents since 2018. The financial impact has been severe – Boeing has recorded operating losses of more than US$30-billion since 2019.
The knock-on effect of a machinists’ strike would have sweeping effects on the U.S. economy. Boeing’s manufacturing operations support more than 1.5 million jobs at downstream suppliers across North America.
Beyond the bargaining table, Boeing’s product quality issues continue to dog the company. The latest embarrassment comes from chronic problems with its Starliner spacecraft, heralded as one of the leading stepping stones to commercial civilian space travel.
The Starliner rocket, launched in June with two astronauts aboard for what was supposed to be an eight-day mission, docked successfully at the International Space Station (ISS) but has since been idled because of thruster problems, stranding its crew on the ISS. Strange noises similar to a sonar ping were reported coming from the spacecraft last week, adding to its growing list of issues.
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While the stranded astronauts are in no danger, and the mysterious noises were traced to a speaker feedback problem, the upshot of the Starliner saga that has Boeing red-faced is the crew will be rescued and returned to earth next year by a rocket made by SpaceX, Boeing’s biggest competitor in the commercial space travel market.
Can the machinists’ union’s love save Boeing? A board seat may seem like something of a Hail Mary, a last-ditch effort in a desperate situation, but in the absence of any other compelling strategy – and with an entrenched group of directors who have proved themselves unworthy – it’s worth a shot.
As Mr. Holden said, “The board certainly deserves to be criticized. We don’t want to run the company. But we want to make sure our voices are being heard about the decisions being made.”
Considering the board voices that have been making the decisions recently, Mr. Holden’s bold request may have merit. A union representative as a director can’t do much worse.