As if Boeing has not had its undue share of supply chain disruptions related to its badly delayed 787 Dreamliner program, a new one looms regarding its St. Louis based defense operations.  On Sunday, after a contract suspension, Boeing’s machinist’s trade union not only rejected the company’s latest contract offer, but also authorized their leadership to call a strike.

According to the Seattle Post Intelligence Aerospace blog, The International Association of Machinists and Aerospace Workers union rejected a Boeing contract offer that reportedly offered a wage increases averaging 3.6 percent over a four and a half year period, along with “significant improvements in retirement benefits and a comprehensive and affordable health-care program,” according to a Boeing news release. News reports indicate that the Union officials are particularly opposed to Boeing’s proposal to replace participation in the Employee Retirement Income Plan with a 4 percent contribution to the company’s Voluntary Investment Plan for employees hired on or after Jan. 1, 2012.  Both parties seem to be willing to continue with negotiations and the earliest a labor walkout would start would be June 23.

Readers may also note the vast amount of anti-union sentiment registered on the SPI Aerospace blog entry.  The sense of those responding is a tone that certain Boeing trade unions do not get the reality of today’s economic conditions, which is causing Boeing to shift more work to non-union or right-to-work locations.  We at Supply Chain Matters will refrain from political commentary but have noted in previous commentaries that many of Boeing’s most notable supply chain disruptions have come as a result of attempts to outsource major portions of production work to external suppliers, without balancing all the various product design, engineering, and production risks, and without a seamless two-way flow of communications.

With certain parts of the world economy showing early signs of recovery, Boeing needs to be a prime engine of U.S. export and domestic growth, and that includes continuous production on existing backlog orders. We trust that Boeing’s trade unions and management will come to the same conclusion.

 Bob Ferrari