Workers revolt over jobs 'sold' to China
Boeing employees say the price of Asian orders - unemployment - is too high. John Carlin reports from Seattle
Sunday 10 December 1995
Bill, an army veteran with a gravelly voice and a grey beard, is manning a picket line at Boeing's vast Everett assembly plant, 15 miles north of Seattle. He has been working there since 1980 as a production line mechanic. He loves Boeing. He loves gazing at the planes when they are complete. But he and 32,000 others are on strike.
Improved pay is only one of their demands. Their main concern is to keep Boeing American. To prevent their jobs from being exported overseas.
"So we're trying to sell our planes in the Asian market? Right? Good," Bill says. "So someone comes and says: 'OK Mr Boeing, we'll buy 20 airplanes - but you have to give us 500 jobs.' So Mr Boeing obliges. Takes away our work and gives it to the Chinese. But what I say is: 'Remember, this is a jet plane. Not a car. If you're at 40,000ft and the red light goes on you can't pull over to the side of the road. You've got 40,000ft to the parking lot and it's all straight down.' What I'm saying is, when you off-load work you off-load skill.''
One of the truths held to be self-evident in modern times is that the success of a company, or of a country, rests on the possession of a skilled and dedicated workforce. Education and training, so the modern mantra goes, are what give you the edge in a competitive world. Now Bill, as a mechanic on the Boeing production line, is one of the most highly skilled workers on the planet. His dedication speaks for itself. Yet he struggles to make a living wage and is insecure about his job.
Why? Because, as Bill understands but struggles to accept, once upon a time airplanes sold well if they were well-made, fuel-efficient and competitively priced, but today, in the much-vaunted global economy, the traditional requisites of free-market competition are no longer enough.
Boeing, in order to obtain entry into the spectacularly lucrative Asian market, has been obliged to do as Bill says: give the buyers a piece of the action, sell them a package which includes not only planes but jobs. The International Association of Machinists (IAM), the union leading the Boeing strike, calls it extortion. "Boeing, and other American companies are being blackmailed by the foreign buyers, by the Chinese and the Japanese," said Matt Bates, a union spokesman.
The Boeing management, while unwilling to employ language so harsh, does not entirely disagree. Chris Villiers, a Boe- ing spokesman at head office in Seattle, said that the company had so far exported 3,000 jobs previously held by American workers. This meant, for example, that about 20 per cent of the metal structure of Boeing's newest jet, the 777, was now made in Japan. The tail sections of the 737, the world's most popular commercial airliner, are made in China. Other jobs have been exported to Singapore. Why?
"Because it makes good business sense," Mr Villiers said. "About 70 per cent of our aircraft market is outside the United States. Nearly half our airplane sales last year were in Asia. In order to gain access and to develop long-term relations with customer countries it makes sense to share out the work."
Developing good relations with China is a particular priority at the moment. Boeing is bidding with Airbus to sell some 200 commercial jets to China. According to a report by the Xinhua news agency last week, China plans to purchase 1,300 new aircraft in the next 20 years. The fact that workers at the military plant in Xian, where they make the 737 tail sections, earn between $50 and $60 (pounds 33-pounds 40) a month, when Seattle workers make that amount in less than three hours, allows Boeing shareholders to make their patriotic sacrifice with a minimum of pain.
The same principle does not apply in Japan, which is why Boeing insists that the practice of "off-setting" production is primarily to secure market entry. And it has paid off. Last month Boeing won an order over Airbus from Singapore Airlines for the purchase of $12.7bn worth of 777s. Boeing has a virtual stranglehold on the Japanese market and so far Airbus has only been able to sell 40 planes in China to Boeing's 243. Boeing's edge over Airbus owes much to the European consortium's reluctance to play the off-setting game - a natural reluctance, given that the company was formed with the assistance of various EU governments with the express purpose of creating jobs in Europe.
While Airbus sweats, Boeing's success has reaped dividends on Wall Street. In recompense for a rise in the company's share price, Boeing's top five executives awarded themselves a bonus collectively worth $5m at the end of last month. Which rubs salt in Bill's wound - not least since Boeing's shares rose partly as a consequence of the $20m a week in payroll money the company has saved during the strike.
"You've seen the figures, right?" Bill said. "The rich are getting richer and we ordinary working Americans are seeing our standard of living nosedive." Official government figures, indeed, show that while the Dow Jones industrial index continues to break all records, since the late Seventies the only Americans who have seen their standard of living improve have been those in the top 20 per cent of the income bracket. Meanwhile, the real income of the average American household is lower today than it was in 1979.
The biggest worry among Boeing workers is that if present trends continue they will not have any income at all. As IAM Journal, the union magazine, puts it: "US aerospace giants don't seem concerned about giving it all away. They feed the Asian tiger, and the competitor grows." What concerns the union - and, indeed, many alert US politicians - is that Boeing, by shifting jobs and passing on technology, will suffer the same fate as the US consumer electronics industry did in the Seventies, when it was swallowed up by the Pacific-rim countries.
It was with this thought in mind that George Kourpias, the IAM president, climbed aboard President Clinton's limousine after a workers' rally in San Francisco two months ago. Mr Kourpias spent half an hour explaining to the President the disastrous consequences for American workers if Boeing continued to ship jobs overseas. The outcome of Mr Kourpias's intervention was a decision by Mr Clinton immediately to appoint a White House team to review the methods employed by Boeing to negotiate foreign sales.
A decision remains some months distant, according to an administration official closely involved with the review. "We are listening to both sides," the official said last week. "Clearly there is disagreement. There is the argument the aircraft companies make that by engaging in this by now fairly common practice of offering job inducements overseas to make your offers more attractive you are actually generating jobs at home. It's a very complex question."
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