Boeing Needs to Take a Cue From UPS and Pay Its Strikers
The planemaker is going to have to meet union demands eventually. It can’t afford the growing worker ill will and customer rancor.
No time to waste.
Photographer: Stephen Brashear/Getty Images
Boeing Co.’s labor negotiators should have paid more attention to how Carol Tomé, the chief executive officer of United Parcel Service Inc., handled talks with its union last year. UPS workers were itching to strike, and the company was inevitably going to have to give hefty raises.
Instead of digging in over a couple of percentage points on the salary increases, risking a strike and creating more animosity with its workforce, Tomé relented to the union’s demands. The higher labor costs have squeezed margins, and investors registered their dismay with a 27% drop in the share price since the tentative deal was announced in July last year. UPS customers, though, were grateful that Tomé avoided the disruption a strike would have caused.
Tomé’s calculation was that even if she pushed the negotiations to the point of a strike, the company would have ended up in the same place — a big payout and costly changes such as adding air conditioning to new delivery vehicles. The only difference would have been the worker ill will and angry customers that a strike would have provoked. Automakers, on the other hand, let labor talks break down, and they ended up agreeing to record pay increases after a costly six-week strike.