The Boeing Lawsuit: How We Got Here

There is a missing element in the analysis of the situation regarding Boeing. Simply put, nobody seems to be asking how we got here.

The answer lies in teachings I picked up at a lecture by His Holiness XIV Dalai Lama. The Middle Way of the Buddhists is directly applicable to labor relations, yet few corporations recognize the merits of this approach. One only need look at Southwest Airlines to see a nearly perfect relationship between management and labor. A quote from the linked article points out:

87 percent of its employees belong to a union. Southwest has never had a strike, and now that the network carriers have whacked away at salaries and benefits, Southwest staffers are generally the highest paid in the industry. But since Southwest has about 30 percent fewer employees per aircraft than its network competitors, it has the lowest non-fuel C.A.S.M. (cost per available seat mile) of any of the major carriers.

Southwest has never had a strike. It isn’t just because its staffers are the highest paid in the industry. That’s too facile an answer. No, the real reason there has never been a strike is because of the corporate culture that Southwest has created. Southwest’s management has always made a point of making employees feel like partners. It’s as simple as the airline referring to its employees not as “employees” but as “people” — in other words, humanizing them. The airline sells its service, and its people, on “freedom”. Internally, Southwest is about “the freedom to work hard and have fun”.

Have a look at its careers webpage. It almost makes me want to fill out an application. A 10% discount on buying company stock? Comprehensive health benefits? Annual chili cook-off? I’m in.

And wouldn’t you know it? Southwest has been the most profitable airline for years.

Now take a look at Boeing. Wouldn’t you know it — the company recognized a problem in the corporate culture as far back as 2006. Wait, make that 2004. Oh, wait, that article refers to problems going back into the 1990’s. Looks like Boeing got the message and finally got someone in there to help out.

With this knowledge, is anyone asking why such bad blood exists between Boeing and its unions? Does anyone wonder why a 2008 strike even happened, considering that both sides stood to lose more from a strike than a deal? The union was foolish to strike. As much as Boeing failed with its corporate culture strategy, the union failed to avert an unnecessary strike.

My friends, I come not to bury Boeing but to caution both management and labor. Labor strife rarely exists in a vacuum. A crappy corporate culture led to bad labor relations, which resulted in strikes, which increased antagonism, which led to Boeing’s move, which led to a dispute, which is now where disputes get resolved: in court (Personally, I believe a company may allocate shareholder capital as it sees fit, not as a union sees fit).

However, rather than get wrapped up in who did what to whom, the morality of a company seeking leverage over unions for future negotiations, and whether or not any given contract is “fair”, it behooves both company and worker to seek out the least destructive path.

Southwest Airlines demonstrates that happy employees not only mean happy customers, but a profitable business. There is a middle way.