Getting The Hang Of ‘Disconnect’

Fellow Texans, I have been to Seattle in the state of Washington and seen Wonders there. Seattle is the home of ecological correctness, good living and a lot of coffee junkies.

OK, so lots of places have environmentalists, the good life and coffee, but try this: There is a Massage Bar in the Seattle airport. Where people sit down at a bar and get their necks and shoulders massaged. And I saw a restaurant that specializes in latte and barbecue. Barbecue and latte. I came home immediately.

Also of interest in Seattle is the machinists strike at the Boeing Co. Thirty-two thousand members of the International Association of Machinists and Aerospace Workers have been on strike for over two months.

And with Christmas coming up, the strikers have just voted overwhelmingly to reject a new offer from the company that had the approval of union leaders. The local paper said Boeing’s management was just whomperjawed. (The Seattle Times didn’t actually say “whomperjawed,” of course, but only because the editors don’t know the word.) Management was so confident its offer would be accepted, it had already sent out letters welcoming everyone back to work. But 61 percent of the striking machinists said “No” to a three-year contract offer their own leaders recommended.

Here’s the history on the deal, and I think you’ll find it has some lessons for us all.

Boeing went through this same downsizing fad all the big corporations are hot on but with some better reasons than most. The company was being squeezed during a bidness slump, so it laid off workers, cut benefits, the whole drill.

The union went along with all this because management promised that when times got better, it’d share with the workers. Times got better, but nothing else happened, except, of course, the big executives made out like bandits.

Since 1990, Boeing has laid off 37,000 people, 25,000 of them in union jobs, productivity is up by 30 percent and after-tax profits total $6.6 billion.

This is an example of what the financial writers genteelly refer to as the “disconnect” between profits and wages. Profits keep going up - and up and up and up - and productivity is at an all-time high, but wages just sit there, quietly shrinking.

This is going on all over the country and is at the root of the political unrest our esteemed leaders address by tut-tutting about the family values of people on welfare. There is more than one form of “disconnect” going on here.

So, the machinists went out on strike. The company made an offer; the strikers turned it down. Then the company got real and offered a 30-cent-an-hour cost of living allowance, worth $450 in the first nine months, a five-buck increase in monthly pension benefits and a 3 percent general wage increase in the third year of the contract, along with a one-time, lump-sum payment.

Machinists make an average $20.37 an hour (eat your hearts out, Texans; they got unions up there), so they’re looking at $22.16 an hour after three years, plus $3,100 in the lump-sum payment. And the machinists said no. Gutsy call.

Look, 3 percent after three years is going to be eaten by inflation, and these people have already been nibbled to death for years. According to local labor scholars, the vote was the direct result of one factor: The workers don’t trust the company and they don’t trust their own union. Gee, what a surprise.

In a related matter, the always-valuable Wall Street Journal reported recently that big corporations are atwitter because their trade secrets are suddenly leaking as though the companies were sieves. It seems part of the problem is that employees are leaking secrets because “they no longer feel a sense of loyalty to the company.” Gosh, isn’t that amazing?

Twenty years of being laid off, cut back, downsized, right-sized and left with a paycheck that won’t buy what it did in 1975, and suddenly, there’s a loyalty problem. Boeing keeps shipping jobs overseas, and suddenly, there’s a trust problem. Imagine that.

Real wages dropped 2.3 percent between March 1994 and March 1995, the biggest drop in eight years, according to the Labor Department. And all we read about is that the economy is doing great and the stock market is over 5,000. Whoopee.

I like the attitude of these Seattle machinists. According to their paper, they’ve sort of amazed themselves and are feeling pretty proud, even though two months of strike will put you close to the edge. Been there, done that.

So a good chunk of my Christmas charity money this year is going to their strike fund because I think they’re making a stand for more people than just themselves.

xxxx