Boeing V. Union

When Boeing recently decided to build the second assembly line for its 787 Dreamliner plane in Charleston, South Carolina, the politicians and union members in Washington State howled in protest. ‘How could they?’ ‘Was there no loyalty to Seattle?’ Boeing explained the decision by saying it came down to labor stability and long-term competitiveness. Translation: No more costly strikes and more flexibility from its labor force. Company officials decided that those goals were not attainable as long as the jobs were held by members of the International Association of Machinists. And after getting huge tax breaks from the South Carolina Legislature, Boeing bolted.

The IAM says the company was only negotiating with the union in order to get a sweeter deal from Charleston. They point to the fact that Boeing hired a lobbyist months ago and bought land adjacent to an existing facility where the new plant will be built. The union, however does not acknowledge that it would not give Boeing everything it wanted in exchange for the 3,000 jobs. The company wanted a 10-year, no strike contract. IAM offered an 8-year contract. Boeing wanted to give 2% annual pay raises. The union wanted 3% plus $15,000 worth of bonuses over the next 6 years. Also, the IAM was asking for a guarantee from Boeing that it would build all future new planes in Washington state and demanded that Boeing remain neutral when the union tried to organize in plants that are currently non-union. In other words, the union wanted to tie the company’s hands for years to come. Boeing would have none of it.

And so a trend that we have seen in the auto industry and the aerospace industry continues … manufacturing jobs leaving strong union states for the non-union South. Did the union shoot itself in the foot? Perhaps. The new assembly line in South Carolina makes it more likely that when Boeing has to build a replacement for the 777 or the 737 it will leave Seattle for Charleston or elsewhere.

The move by Boeing does come with substantial risk, however. While it would not have to build much in the way of new infrastructure in Seattle, Boeing does have to construct a 600,000 square foot plant for the 787 assembly. That will cost an estimated $1.5 billion. In addition Boeing will have to train a whole new workforce to build it’s most important new plane in over a decade and a plane that is already 2 years behind schedule.

I’ve covered enough high profile search and rescues to know that if the missing would have had some kind of a GPS locator beacon they probably would still be alive. James Kim, the San Francisco techie who got stuck in the Oregon mountains during a snowstorm could have been saved by technology. He left his family in the car while he went for help only to die of hypothermia while teams looked for him. Cases like that, led many people to buy the latest locator gadget. And now authorities are starting to see some abuse of the products by people who have little experience in the back country. They call it Yuppie 9-1-1.

Mostly it’s people hitting the S.O.S. when they’re tired or cold and don’t want to work to get out of the woods. Another abuse takes the cake. A father and son were camping in Arizona. They initiated a search three days in a row. The last time was because they drank water from a stream that tasted salty. Irritated rescuers finally yanked them out of the woods. Over a 15 year period search and rescues in national parks alone cost taxpayers more than $58-million. Beacons can actually reduce the cost of legitimate emergencies by giving rescuers an exact location to pinpoint the search. But abuses are frustrating sheriff’s departments and the many volunteers who conduct these operations. There’s no substitute for preparation. And if these novice outdoorsmen continue to be the ‘hiker who cried wolf’ they could end up getting charged for their ‘rescue’. Currently New Hampshire is the only state that allows for a rescue bill, but if the Yuppie 9-1-1 trend accelerates look for other states to follow.

One of a handful of key national debates right now is over the stimulus. Is it working? We traveled to Oregon for an answer because the Beaver State was the first in the nation to report how the money is being spent. So far about $1.1 billion has flowed through the state as stimulus. But a vast majority of that, roughly $700-million, has not gone toward job creation. Instead, state officials decided to spend the money to avoid deep spending cuts and shore up the social safety net for those who are hurting right now.

Most of the money has gone to education. That means teacher and professor salaries. It has allowed the state to avoid a lot of layoffs and the prospect of having to close schools early.  The second biggest chunk of spending has gone toward social services. The state increased money for food stamps, Medicaid and unemployment benefits. It has also increased some agencies such as the Department of Human Services. DHS has hired hundreds of new case workers to deal with the higher number of families on public assistance. We interviewed one of the new hires. He himself had been out of work and on food stamps before getting the job.

Government officials in Oregon say the stimulus is working because the money is getting directly into the hands of people who need it most. But critics say what’s really happening is the growth of government and the creation of jobs that are unsustainable when the stimulus money dries up. Oregon’s unemployment rate is still at 11.5 percent, well above the national average which is just under 10-percent. 3 out of every 4 jobs that has either been saved or created in Oregon is in the public sector. Private companies, the engine of job growth in America, have added precious few positions. So back to the original question, ‘Is it working?’  If you’re that new employee at DHS you’d no doubt say it is. Government officials say the recession would be far worse if they had not propped up the struggling. But if you’re a private business owner who is still laying off workers, you’re likely wondering when if ever you’ll see light at the end of the tunnel.

Have you ever been hiking through a national forest and stumbled upon a small, quaint, old cabin tucked in the woods? Chances are that cabin owner is essentially leasing the land under the cabin from Uncle Sam. Well, now those bucolic cabins may be driven to extinction by the very same government that encouraged them to be built. Back in 1915, people either lived on the farm or in big cities. Few Americans recreated in the national forests let alone live there. Congress wanted our public lands to be used by the public so it lured people to the woods with the Recreation Residence program.

Turns out it worked too well. Thousands of Americans built their tiny vacation cabins, but then others started scooping up adjacent private land and building mcmansion cabins. That has led the feds to think their cabin tenants were getting too sweet of a deal. Congress passed a law calling for new assessments. The result has led to sticker shock. Take the Minard family in Lake Wenatchee, Washington. On top of local property tax and a state tax, they have been paying $1,400 year to the U.S. government. Now that fee has spiked to $17,000 per year. The Minards can’t afford that and nobody wants to buy the cabin when they learn of the fee. So they’re left with only one option…pay to have the cabin demolished, return the forest to its natural state and walk away from five generations of memories.

It’s something people who fly don’t like to think about. ‘What happens in the event of a serious crash?’ But federal safety officials are increasingly looking at improving crash survivability and new regulations kick in October 27th aimed at improving the odds that more passengers will walk away from serious accidents.

We wanted to see what these new guidelines will look like so we went to AMSAFE, an airplane seatbelt manufacturer based in Phoenix, Arizona. Over the last several years AMSAFE has been testing and producing airbags that they install in their seatbelts. They demonstrated the airbag in a crash test complete with two dummies, one with an airbag and one without, and a hard crash into a plane’s bulkhead. The violent crash was equivalent to a head on car collision at 30 MPH. The dummy without the airbag lurched forward even with his seatbelt on and smacked into the bulkhead suffering what would be a fatal head injury. The dummy with the airbag survived the crash without any injury.

Airlines will not be required to have airbags, but the devices could actually save them a lot of money. In order to comply with the new regulations airlines have to show that every passenger can survive a crash up to 16 times the force of gravity. With stronger seats throughout the aircraft most passengers will be fine. The exceptions are the rows directly behind the bulk head and exit rows. That’s because the bulkhead and seats in front of the exit row don’t move forward during a crash. Airlines will have to either move seats further away from these immovable objects or install airbags that greatly cushion the blow.

Federal safety officials estimate that over the last 14 years fifty lives could have been saved if these new requirements had been in place.

So the next time you fly check out your seat belt. It just might come equipped with an airbag.