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Suppose
you walk into a Mexican restaurant and ask for Beef Wellington and a side of
French Toast. Undoubtedly, you would be turned away for the simple reason
those items are not on the menu. If you protested loudly, the police would be
called and you would be carted away, hungry.
A similar situation exists in Wichita as discussed in Understanding Reality - You Don't Know What You've Lost Till Its Gone.
The choice presented to the Machinist union members at Cessna Aircraft is to
accept or reject a 10-year agreement that cuts wages 4.2 percent, replaces
the pension plan with a 401(k) plan and increases the share of the cost of
health insurance paid by the workers to 30 percent.
The choice is not to ask for Beef Wellington. Yet, several union members
working for Cessna have emailed me telling me how unrealistic I am. It may
not seem like it but I am trying to help. Moreover, I certainly am not the
one who is unrealistic.
Here is my response to "Mary" (name changed to protect the
innocent) whose husband works at Cessna.
Mary,
The union needs to understand the gravity of the situation. The union likely
has one shot at negotiating a contract. It is possible Cessna has already
made preparations and the moment the union rejects the offer, the jobs will
leave immediately and permanently.
Whether you like it or not, the union has a choice. The union can accept the
contract or reject it. Perhaps there is some room for negotiation but likely
not much.
My advice, which I expect not to be taken would be for the union to accept
the offer outright or counter by accepting most of what management is asking,
perhaps proposing something like 20% of health care costs and a 2.5 percent
pay cut.
I seriously doubt management will
budge on replacing the pension plan with a 401(k) plan. I do not know is if
Cessna is talking about new employees or existing
employees. I suspect a bit of both with grandfathering of accrued benefits.
The one thing I am certain of, is that protests will
not help, nor will getting union members fired up with anti-Cessna sentiment.
If the union rejects the contract in some bitter fight as opposed to a
genuine meeting of the minds where the union gives in up front on most of
what Cessna has offered, it is highly likely the jobs will move to New
Mexico, if not Mexico.
The Union's Choice
1. Accept the offer and the jobs stay for 10 years
2. Reject the offer and the jobs are gone for good
3. Hold out for Beef Wellington in a contentious round of negotiating and
protests
4. Counter with friendly negotiations, agreeing to most of what Cessna
management is asking, hoping to tweak the percentages a bit more favorably.
I strongly suggest the union go for option #1 or option #4.
Once management says hello "New Mexico" all options will be off the
table. That is the reality of the matter.
The union needs to understand the gravity of the situation, the permanency of
the result, and how much workers in New Mexico would love to have those jobs
at exactly the terms Cessna is offering.
Mish
GlobalEconomicAnalysis.blogspot.com
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Thoughts on the great
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