The New York Times answered a question I had regarding how much striking International Association of Machinists (IAM) workers will get paid during their strike. The answer is that after the first two weeks, IAM workers take a huge pay cut. And though Boeing Inc. (NYSE: BA) will lose $100 million a day during the strike, striking may be more painful for workers.
The Times reports that "if the strike goes on for more than two weeks, union members will begin drawing $150 a week in strike pay. The typical pay for a union member is $27 an hour, or about $56,000 a year before overtime and bonuses."
If my understanding is right, the workers get no pay during the first two weeks of the strike and then take an 86% cut from their normal pay each week thereafter -- excluding overtime and bonuses. (This assumes that they normally make $1,077 a week for 52 weeks a year and that the $150 a week strike pay is pretax). With the high cost of food and gasoline these days, that kind of pay cut is going to hurt IAM members.
I would not be shocked if the two sides were back at the bargaining table in a month.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter











Reader Comments (Page 1 of 1)
9-06-2008 @ 7:55PM
CAPTJIMMYMcINNEY said...
i hope the union bastards starve and loose everything that they own. maybe boeing will move down south like the automobile industry is doing. we know what unions are worth down here[the amount printed on the union card] lmao
9-06-2008 @ 10:51PM
NoInform8tion said...
I don't know it seems their other strikes lasted fairly long some more than a month. 87% voted for the strike so evidentally they feel they can afford to do this. Besides if Boeing loses alot of money and gets more behind on it"s back log of planes, I'm sure Airbus would be more than happy to fill in. Global free market and all.
9-07-2008 @ 12:09AM
Ray said...
Mr. Cohan's speculations are reasonable. HOWEVER, he obviously doesn't have all the information. The machinists have been saving for this strike for more than a year. The average machinist puts away enough money for two months in the year before contract expiration. It's part of the culture. The last IAM strike was 25 days with Boeing caving in to end it. The previous strike was 69 days with Boeing caving in to end it.
Moreover, the last time SPEEA (the union that represents 21,000 engineers and technical workers at Boeing) went on strike in 2000, it lasted 40 days as SPEEA doesn't provide strike pay at all. SPEEA has been advising its members to save up for a strike when their contract expires (December 1, 2008) for the past year.
Boeing had better remove all of the takeaways from the bargaining table and tender sustainable increases in benefits or they'll be facing back-to-back or possibly even simultaneous strikes from the IAM and SPEEA.
9-08-2008 @ 10:29AM
Steve said...
I'm old but I remember,
Long ago I toured Inland steel to see thier 1/4 mile long rolling mill. They invested a lot in capital equipment. The union was strong too. They won a contract wherin some members qualified for 13 week vacations. Now that plant is forign owned and many of those union members now enjoy a 52 week vacation .
Years ago our auto companys were strong. So were the unions; they won great benefits. Many of those brothers now also have very long vacations.
Now Boeing is flush with orders which places the union in a strong position. I wonder how long it will be before Airbus is first and the aircraft company in Brazil is second.
10-12-2008 @ 3:03PM
NoSpin said...
One thing none of these articles state is the STARTING wage is $11.72 hr! That hasn't changed since 1992. Do any of you want to start at a job at what you were making then? The workers have given back when Boeing was hurting, now with 4 BILLION in profits for 2007- it's our time. And they have that not because of the failed 787 and it's outsourcing -it's because of the workers in the US making the best aircraft in the world !
9-09-2008 @ 9:39AM
sjoden said...
Living in Seattle, I want to know what union member puts away money...the old timers? Not a whole lot of them left. These young guys ADMITTEDLY did not save...my ex spent it on remodeling his house, his buddies? New cars, motorcycles - not putting it away. They are NOT prepared for the long haul and I will bet they will call for a vote after the Sept. 25th check is not in their hands. This is going to hurt them more than the company, Boeing's losses are deferred, not lost like the workers. Their 'losses' in their contract are not even worth fighting for, but their outsourcing issues are something that even I - and every other American should take issue with. I reluctantly put my support behind IAM, not for their wages, medical or pension - just for the outsourcing.
9-19-2008 @ 7:10PM
Bill said...
Just wanted to say as a Boeing employee with 20+ years experience, while the strike pay is low and the average employee has 17 years of experience, we've all been through this before. I personally can last well into next year if it takes it. Most people who don't work there don't realize the damage embedded in the fine print of the contract. All they see is the carrots that the company displays to the media. If they didn't have the damaging language, we probably would have accepted the contract.
CaptJimmyMCinney...nice to see you're on my side. When I retire, I'll be buying your house for cash, but then I'm not really in the market for a single-wide. When you aren't unionized your standard of living is less than if you were organized. So suck it up buttercup. Get over it pal.
9-24-2008 @ 12:52PM
y2kpony said...
I agree with Cpt Jimmy... Boeing should just fire them all like Reagan did with the air traffic controllers. The longer they are out, the less likely they will ever make up enough to overcome what they lose while on strike.
They want security from outsourcing AND they want 2% more pay??? You get one or the other, the higher the pay is, the more necessary it becomes to outsource.
Unions are becoming the downfall of America. The leaders are gangsters, involved in organized crime. It's been that way since day one and will remain until all unions are busted.