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Letter to Boeing’s Boss: Squeezing workers for corporate welfare

December 26, 2013

Jim McNerney, CEO
The Boeing Company
100 North Riverside
Chicago, IL 60606

Dear Mr. McNerney:

The squeeze that you and Boeing are putting on your machinist workers’ pensions, pay scales and your stance on other labor issues regarding the assembling of the new 777X airliners is unseemly for several reasons.

First, consider your pay this year of $21.1 million, a 15 percent increase from the previous year, and much higher than your predecessors. That sum does not demonstrate a moral authority to require sacrifices from your workers at a time of rising Boeing sales and profits, dividend increases, cash hoard, and another notorious $10 billion stock buyback. I say notorious because stock buybacks per se do little for shareholder values and a lot for the enlarged stock options of top executives.

Second, you’re holding an auction for your long-time workers jobs in other states, inciting a bidding war whereby states are giving away taxpayer assets to lure your 777X assembly factory with huge tax holidays and other subsidies. Washington state outdid itself with a new law, signed by Governor Jay Inslee with the largest state business tax break package for Boeing in history. The tax escape law “will give Boeing and its suppliers about $8.7 billion in tax breaks between now and 2040,” according to the Citizens for Tax Justice (CTJ) calculations. CTJ adds that “Boeing has managed to avoid paying even a dime of state income taxes nationwide on $35 billion in pretax U.S. profits.” Boeing also received tax advantages from the federal government, including $1.8 billion in federal income tax rebates on its $35 billion in U.S. profits between 2003 and 2012.

Third, in 1997 the Justice Department allowed Boeing to merge with McDonnell Douglas, making Boeing the only manufacturer of commercial jet planes in the United States – a domestic monopoly, justified by the only other foreign competitor – Airbus Industries in Europe. Another valuable gift by Uncle Sam brought about by your company’s Washington lobbyists.

Fourth, recall Boeing’s contract with the Department of Defense for the initial phase of Air Force’s KC-46 aerial tanker program that provoked sharp criticism by Senator John McCain in July 2011 for the excessive burdens on American taxpayers from cost over-runs in a supposed “fixed price” contract. In a letter to Department of Defense Undersecretary Ashton B. Carter, Senator McCain wondered “why under a fixed-price, relatively low-risk contract, taxpayers may have to pay 60 percent of any overrun within that band – up to $600 million.”

A book could be written about the Boeing company’s strategy for externalization of a variety of its costs onto innocent, defensely people – whether workers or taxpayers. Boeing’s systemic campaigns for corporate welfare are shameful. Your company is one of the major corporate welfare kings in America, running a close race with the champion – General Electric. As CTJ wrote: Boeing “employs an army of site location and tax consultants, whose job has been to blackmail states into giving Boeing lavish tax breaks.” These include sales and property tax breaks which drain communities’ ability to provide for school and other public facilities (http://www.goodjobsfirst.org/corporate-subsidy-watch/boeing).

Fifth, there is the gigantic subject of your outsourcing to foreign suppliers, in particular Japan where your technology transfers, damaging the longer term viability of U.S. competitiveness in the aerospace sector for short term gains favoring Boeing, merit thorough examination by the Congress. As you know Boeing’s foreign outsourcing brought your company considerable quality control and delay troubles with the Dreamliner.

You need to read the 2005 report by the Defense Science Board about the hollowing out of domestic capability in the electronics industry from this kind of overseas outsourcing migration by U.S. companies.

For starters read the current copy of The American Conservative magazine’s cover story titled “Japan’s Plan to Unmake Boeing,” describing the full assistance of Boeing. No doubt, if your further cruel downward pressure on your machinists culminates in your destroying their union local and their jobs by leaving the state of Washington and going for example to the anti-union state of South Carolina, there will be further public inquiries. Such as how perverse incentives provided by your suppliers in Japan and elsewhere have furthered job losses here and accelerated your company’s technology transfers perhaps beyond the tipping point against the U.S. national interest.

Sincerely yours,

Ralph Nader
http://nader.org/2013/12/26/letter-boeings-boss-squeezing-workers-corporate-welfare/

December 27, 2013 Posted by | Economics | , , , | Leave a comment

Boeing’s Union Workers in the Crosshairs

By David Macaray | Dissident Voice | December 26, 2013

A brief summary of what’s been happening in Seattle between the Boeing Corporation and its union workforce, the IAM (International Association of Machinists and Aerospace Workers).  Aware they have the upper hand, and that thousands of relatively well-paying jobs hang in the balance, Boeing has resorted to an unsubtle form of carrot-and-stick extortion.

The carrot:  If the IAM agrees to re-open the existing contract and give the company several gut-wrenching concessions involving pensions, health care and future wages, Boeing will stay put, the jobs will remain in Seattle, Boeing, as planned, will allow the IAM to build its new 777X jet airliner, and the future will be rosy.  As the seminar creatures like to say, it’s a win-win.

The stick:  However, if the IAM doesn’t agree to the concessions, the Boeing Corporation will move its 777X operation out of the state of Washington and allow other, more reasonable and dependable states to bid on the job.  According to Boeing, who gleefully leaked the news to the media, 22 states have already shown interest.

More stick:  Realizing it has enormous leverage, and unwilling to let that advantage go unexploited, Boeing issued an ultimatum to the state of Washington.  Unless it gave the company a huge tax break, they would pack up and leave.  In a special legislative session, the state assembly, at the urging of the governor, granted Boeing more than $8 billion in tax breaks, the largest corporate subsidy in U.S. history.

So far, so good.  Everything was coming up roses for Boeing.  It had a state government eating out of its hand, it had the union back on its heels, playing defense, and it had the media doing its bidding. Then a startling and horrific event occurred.  Godzilla ate the carrot and stick.

By a whopping 2-1 margin, the union local, District 751, voted down the offer.  To be clear, this was specifically a vote on the company’s re-opener.  With the contract still in effect, it wasn’t a prelude to a strike.  What the membership was saying with their “no” vote was that the current contract must remain in force until it expires, in 2016, at which time the parties would negotiate a new one, just as they always have.

After that, things got ugly.  Boeing closed ranks and renewed its threat to leave, the state assembly had a cow, and the IAM International demanded that another vote be taken, a move that, understandably, created heartburn at the local.  District 751 doesn’t want another vote on an inferior contract.  Yet, with so much at stake, a very nervous International is insisting that the membership take another look at it.

There’s an old axiom in contract negotiations called the “two vote rule.”  It states that a membership will vote down a contract no more than twice.  They’ll vote it down once, to show their disapproval, they’ll vote it down twice, to show their defiance, but the third time around—partly from fatigue, partly from the realization that it’s likely the best offer they’re going to get—they’ll vote to ratify (unless they move to strike).

Thus, the union leadership’s fears are not unfounded.  Rather than buying into the company’s rhetoric, they see the Boeing move for the audacious and naked power play it is.  The IAM International may be too scared to call Boeing’s bluff, but District 751 isn’t.  In their view, all this talk about moving the 777X out of Seattle is just that….talk.

Not only are Boeing’s profits at a record high, the union believes if Boeing truly thought that uprooting its Seattle operation and moving to another state made the best business sense, they would have done it.  What’s to prevent them?  If moving was the “right” thing to do, they would have already moved.  This is a bluff, plain and simple.

Per the International’s demand, another vote is scheduled for January 3.  Unlike the bad old days, when certain unnamed unions (okay, the Teamsters) could unilaterally ratify a contract on behalf of the members, today’s unions are wildly democratic.  The members have the final say, and votes are conducted by secret ballot.

If District 751’s leadership can maintain discipline and keep the membership’s eye on the ball, this re-opener will be voted down.  And if there’s another vote following this one, we can only hope that the union is able to disprove that old “two vote rule.”  After all, weren’t rules meant to be broken? Onward!

David Macaray can be reached at: dmacaray@earthlink.net.

December 27, 2013 Posted by | Deception, Economics, Solidarity and Activism | , , , , | Leave a comment

Freedom House: The Language of Hubris

By Jeremy Bigwood | NACLA | September 20, 2012

The following article is from the Summer 2012 issue of the NACLA Report on the Americas, “Latin America and the Global Economy.” It was published alongside Jeremy Bigwood’s expose of Freedom House’s role in clandestinely nurturing and organizing the opposition to Venezuela’s president Hugo Chávez over the last eight years.

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Freedom House offices in Washington (credit: Jeremy Bigwood)

Freedom House is the oldest Washington-based NGO working in the international arena. It was founded just before the beginning of the U.S. entry into World War II and blossomed during the Cold War. Freedom House today positions itself as a nuanced, liberal, or even left-of-center organization, obscuring its real agenda: to destabilize foreign governments whose policies challenge U.S. global hegemony. Since the 1980s Reagan revolution, its Board of Trustees has been largely composed of neoconservatives, including R. J. Woolsey, the former director of the CIA; Donald Rumsfeld; Paul Wolfowitz; Jeane Kirkpatrick; and Samuel P. Huntington.1 Although it likes to call itself “independent,” it receives about 80% of its funding from the U.S. government, either through the State Department, USAID, or the National Endowment for Democracy (NED).2 As such, it is clearly an instrument of the U.S. government.3 The rest of its funding is underwritten by foundations that pay for its annual Freedom in the World report, which ranks countries according to how free they are—as perceived through the eyes of Freedom House’s main office in Dupont Circle, Washington, D.C. This report is widely cited as gospel in the news media but has been heavily criticized by academics for its biased methodology.4

During the Cold War, Freedom House acted as the principal U.S.-based intellectual organ for attacking the ideologies and policies of Soviet and Chinese communism. But it almost always artfully avoided any discussion of the embarrassing inconsistencies between U.S. ideals and practices, such as the U.S. government’s Cold War activities in Latin America, Africa, and South East Asia, and its domestic racial policies. Even so, few NACLA readers would find fault with all of Freedom House’s work during the Cold War or after. As such, the organization belongs to a gray area of U.S. foreign policy.

Freedom House underwent a significant shift toward promoting neoliberal economic and political policies after the 1973 coup in Chile against the democratically elected socialist president Salvador Allende.5 Since the end of the Cold War, Freedom House has adjusted to the new geopolitical environment by shifting its attention from attacking Communism to undermining what Washington considers to be “authoritarian” and “populist” countries. Freedom House now quietly funds projects in those countries that the United States considers to be economic or ideological threats, or more openly in allies that the United States wants to keep in line. Freedom House tends to stay away from U.S.-friendly totalitarian regimes and monarchies.

Freedom House arrogantly holds that it has the right to operate anywhere in the world with or without the permission of the local government. In response to queries about its activities in other countries, an online Freedom House fact sheet explains: “Language in the annual State and Foreign Operations Appropriations Bill states that U.S. democracy and human rights programming shall not be subject to the prior approval by the government of any foreign country.”6 In other words, Freedom House believes that, with the permission of the U.S. Congress, it has the right to decide when and where it can meddle in any other government on the planet. … Full article

1. Diego Giannone, “Political and Ideological Aspects in the Measurement of Democracy: the Freedom House Case,” Democratization 17, no. 1 (January–February 2010): 68–97, available at tandfonline.com.

2. Ibid.

3. Ibid., 75.

4. Gerardo l. Munck and Jay Verkuilen, “Conceptualizing and Measuring Democracy: Evaluating Alternative Indices,” University of Illinois at Urbana-Champaign, Comparative Political Studies 35, no. 1 (February 2002): 5–34; Scott Mainwaring, with Daniel Brinks and Anibal Perez Liñán, “Political Regimes in Latin America, 1900–2007,” available at kellogg.nd.edu.

5. David Harvey, “Neoliberalism as Creative Destruction,” The Annals of the American Academy of Political and Social Science 610 (March 2007): 26, as quoted in Giannone, “Political and Ideological Aspects in the Measurement of Democracy.”

6. Sarah Trister, “Fact Sheet: Freedom House in Egypt,” January 2012, available at freedomhouse.org.

See Jeremy Bigwood’s article in the Report, “Freedom House in Venezuela.”

September 25, 2012 Posted by | Deception, Timeless or most popular | , , , , , | 1 Comment