Boeing threatens machinists into contractual enforcement
Almost every New Jersey business has faced some sort of competition. Competitors will try to sell the same products for a much lower price. This can threaten a company's future earnings and as such, quick action must be taken.
Unfortunately, the solutions are not always in the best interests of the employees. Sometimes layoffs happen. When they don't, employees may experience pay cuts or reduced benefits. Airplane manufacturer Boeing has forced its machinists to wage and benefit cuts -- or move production out of the Northwest.
The 1,200 union machinists voted against the contract in November, but Boeing threatened to move the wing elsewhere. So the machinists reluctantly agreed to the new contract, which will offer more job security but cut wages and frozen pension plans. Boeing employees are paid generously, with apprentices earning $60,000 a year. It's not uncommon for seasoned employees to take home six-figure salaries.
Boeing is facing increased global competition. Competitors are selling similar airplanes at huge discounts and the company wants to ensure that it continues to earn significant profits in the future. However, the company's executives will not have to face wage cuts. In 2012, the CEO took home a whopping $27 million.
It's unfortunate that Boeing had to threaten employees into contractual enforcement, but economic conditions can change rapidly. Businesses -- even those that have been around for decades -- are not immune from bankruptcy and closures. Sometimes they have to make drastic decisions -- such as cut out retirement plans, 401(k)s and other benefits -- in order to keep profit margins high. Retirement plans are not guaranteed and many employees -- not just those at Boeing -- have seen their pensions cut.
Source: The Oregonian, " Boeing gets what it wants in nasty contract dispute with Machinists," Jeff Manning, Jan. 6, 2013