The Real Robber Barrons of Puget Sound: Labor union votes for a new contract

What happens when you pay people who generally aren’t worth it over $100,000 a year–they operate a union against productivity which is what Boeing narrowly escaped over the weekend with a 51 to 49 vote among approximately 31,000 eligible members.   Making that kind of money the machinist union at Boeing is the economy of Puget Sound and the International Association of Machinists and Aerospace Workers is basically their own local government.  Because of their belief in the evils of capitalism they nearly drove Boeing as a company to move their new 777X design build with its composite wing out of Washington to be manufactured in right-to-work states where the union could not wreck the development of the new state-of-the-art plane.  Most of the members of the machinist union do not have the technical aptitude to build a new airplane from scratch let alone sell it to markets all over the world.  Yet they are paid six figures because of the union infiltration into a successful American company and they buy their boats, their new trucks, and live their relatively opulent lives blissfully unaware of what makes a company work—or profitable.  Their union preaches against the evils of profit—yet they demand more and more money with every contract.  For this latest contract the members received a $10,000 signing bonus and money towards a 401K plan.  Still, the margin of victory for Boeing was razor-thin.  Many of the 49% of the union members who voted against the contract believe the company should continue to fund their pensions.  They don’t want the 401K plan.  They obviously don’t fathom that Boeing cannot continue to throw money at them in such a rate for indefinite periods of time—because they are disconnected from where the money comes from.  For them, the planes arrive on the shop floor, they assemble them, and they leave.  They have little to do with the design process, the sales and marketing, or the delivery.  They simply show up, do some work, and leave with their six figure incomes.

To get an idea of how much money the machinist make at Boeing understand that there are 11 different pay grades depending on job categories.  At Boeing the lowest level machinist are considered Grade 1 which stars at about $25,000 per year and tops out around $66,000 per year.  The top-level union workers before the contract made more than $90,000 in base pay annually not counting shift differentials, overtime or incentive payments.  After the contract those workers will top out over six figures in base salary.  Clearly this was the difference in the vote.  Many of the aging workforce at Boeing saw the writing on the wall.  In the Puget Sound/Evertt area where the Boeing plants reside the median household income is about $47,000 a year.  If Boeing packed up and left—which they clearly intended to do so to avoid more work stoppages in the future from their striking labor force, there is no place else capable of paying employees such large sums of money for performing jobs that are only worth half that value.

Boeing has been throwing money at the International Association of Machinists and Aerospace Workers for decades and like gambling addicts they have spent it as fast as it has come in and continued to reach their hand out for more, and more, and more until the company finally looked to move from the Evertt area.  The decisions Boeing were faced with reminded me of my hometown where I once worked at Cincinnati Milicron—which is now a parking lot.  A vast complex that resembled a small city is now completely gone down in Oakley just north of Cincinnati along I-71.  All the skill that was employed there is gone.  Just to the west of that location was the old Norwood General Motors plant which built the old Camero.  It’s now gone—destroyed by the parasitic unions.  Just to the north up in Hamilton, is the old Fisher Body plant for General Motors where my grandfather worked.  Long after his death my grandmother continued to give me comic book money from the retirement benefits he received as well as thousands of other retired GM workers all over the country who were not productively working any longer.  General Motors was trying to cover all those legacy costs with newer workers in a pyramid scheme concocted by the unions which did not add up.  To this day the old Fisher Body building is still standing, but the company is gone.  It’s primarily just warehouse space now.  Over to the east in Middletown was a town—once a thriving place flourishing off the old Armco Steel Plant.  The wage structure got out of control there and most of the orders for business went away.  It is now AK Steel but employs far fewer people than it once did and is only a distant shadow of its former self.  The result is that the economy of Middletown crashed and burned.  Homes that should be $70,000 in value are $20,000, and the area is riddled with crime.  As people lost their jobs they became addicted to welfare and the quality of life for the once prosperous town dried up like a gold mine in the Old West once the precious element ran out.  That is the eventual future of Puget Sound.  This latest contract only buys a little more time.  It will cost Boeing a lot of money to move their operation to another state, so it was cheaper to throw $10,000 bonus checks at workers so they could pay off their new Ford F350s or plan to buy a new boat.  Boeing has a hot new plane to build and sell, so they took the lesser of the two evils.  But why should they be in such a situation and why would the Department of Labor side with the International Association of Machinists and Aerospace Workers and not Boeing in forcing the job provider to bleed itself dry to appease a bunch of out-of-touch workers bred under a communist labor union system designed to destroy American business.

In the videos above the guys at PJ Media hosted by Bill Whittle explore this topic, and it is worth watching.  The guest Dr. Burt Folsom told the story of the so-called Robber Barrons at the start of the progressive era, (just prior to the Twentieth Century) when many of the American labor unions were just getting started.  Because of their hatred of capitalism the government went after the Robber Barrons, such as the rail road industry and went on anti-trust witch hunts and essentially through federal force took away the power of American business and handed it over to the workers of manufacturing.  The manipulative power that the Robber Barrons formally had were now in possession of the solidarity effort of the labor unions—which turned out to be just as corrupt, and destructive.  The biggest difference is that the labor unions didn’t create jobs, as the Robber Barrons did.  With two evils being equal—that of human greed—the companies created by Robber Barrons through capitalism at least provided good jobs whereas the labor unions provided nothing but labor.  Labor can be found elsewhere if it becomes too problematic, but Robber Barrons who create jobs—cannot.  They are few and rare as gold whereas general labor who can push a button on a CNC controller and read micrometers into the thousands of an inch are quite common.

The vote at Boeing over the weekend which upset many of the labor union members is the grudging realization that without Boeing in Everett, Washington, there is nothing that will replace their loss and politicians, union leaders and all their F350 driving members with their $10,000 bonus checks are at the mercy of those who create the jobs.  100 years of progressivism has come smashing against a cold reality that should have been obvious from the start.  Eventually the union demands will outpace Boeing’s ability, or willingness to pay off the workers with bonus checks and excessively high salary—and Boeing will move to a right-to-work state or possibly move their operation to another country where they can obtain stable labor without such outrageous expectations.  But for now, with a narrow union vote, some of the members are beginning to see the writing on the wall and is appreciating Boeing not as a Robber Barron company that has been forced to become a heavily subsidized company of political entrepreneurialism, but for its roots as a Market Entrepreneur.  It was the labor unions which pushed Boeing into a relationship with politics to protect itself from the thieving hands of an ungrateful workforce—and the rest has been downhill—except that Boeing still makes cool airplanes that sell very well—which is the only bright spot of an otherwise bleak future.

Watch the videos above to learn more.

Rich Hoffman