Boeing ends crippling strike as workers accept latest offer

Don’t get me wrong, I think the private equity model of financially oriented management is a problem. Employees and unions do share blame though. Remember, an IAM worker forgot bolts on the door plug. And SPEEA workers (the other union) designed MCAS poorly and didn’t build redundancy on dirt cheap sensors where there was no reason to avoid it. Boeing’s floor is inefficient and a shock to anyone who works with Boeing, due to union territorial issues and frankly a lazy culture. All these things have contributed significantly to Boeing’s decline, in addition to bad leadership.

I'm not serious, these are just the first cynical thoughts that came to mind, but I feel like this question should be one we can actually answer? We've had both pensions and time to see varying degrees of successes and failures regarding them.

If you're lucky, you've been getting audit reports about the underfunded pension for years, so you could prepare, but you probably couldn't do anything about it.

If your employer had put the pension funding in a 401k account for you, you would know what you have, and be able to separate from the employer and not have to keep in touch to make sure they're holding their end of the bargain.

if you are 50+, worked there 30 years, and had your pension frozen after 20 years of work, you are so far behind the curve even if you max out your 401k for your remaining years. You need to do a lot of work and probably invest in high risk stocks to even begin to make up for that 25 years of lost compound interest in your career.

Also: I realize I'm spoiled, but I had quarter matching 401ks in tech (which apparently isn't that amazing to begin with), so I don't see this as an insane deal for the effort and sacrifice they put out.

I am pretty sure you did not mean it this way, but you're absolutely right.

The pensions that were granted in the 50s and 60s and not funded have left an enormous debt for many companies that the federal government will have to make good.

Even today, the pensions of many police and firemen are underwater and not likely to be solvent.

So pensions are great for company managers who really don't ever plan to fund them properly.

And don't get me started on social security.

The only reason why a pension is a preferred bargaining tactic is because it creates a strong principle-agent problem for the business, where management are more than happy using tomorrow’s income to pay for today’s problems.

There are two reasons you might not want all retirement savings money to be wholly in control of the saver:

1) Some folks are simply really bad at saving, which ends up being rough for others around them and for society, not only affecting them. This reason tends to rub some folks the wrong way on principle, so they may prefer to disregard it, but it is true as far as it goes (principle aside) [edit: I mean doing anything about this for this reason rubs some folks the wrong way, not that they disagree it’s a real phenomenon]

2) Money directly available to people is freed up for rivalrous zero-sum spending. Think: bidding up scarce resources for your kids, like good schools (which can mean housing). In a world where 100% of comp is employee-directed, this punishes responsible savers.

Isn’t this normal and expected? Pensions are also subject to the same thing since they’re invested in the same stock market, right? It is why most pensions don’t have enough money. You simply can’t make something totally risk free. I think pensions are misleading by offering this guarantee and it always results in the company having difficulties for unrealistic obligations or people not getting their pension that they expected when the company collapses.

> as well as your own investment choices and skills over time

401k plans usually have a default investment suggestion that provides a reasonable place to start. People can choose to stick with those recommendations or not. But the 401k is required by some regulation to make responsible choices as a default strategy. Not all companies have the same flexibility in what you can invest in, but mine have always had low cost funds available. I do agree they should have the ability to freely invest in anything though.

Would I bet on Boeing being alive in 40 years? Not really, not without a huge overhaul in their business. Would I bet on them being alive in 15 years when I retire? Probably.

They did get a pay raise, but the main issue was over paid sick days and this was denied.

My only small sympathy is that this was still at the tail end of the pandemic. So the strike could have legitimately made things really bad and accelerated a recession.

-----------

Good news: There were still negotiations, and mid-february 2023 a few unions announces a deal that would give them 4 sick days + 3 personal days to convert to sick days. They apparently credit the senate for putting pressure on the railroads to allow this.

So despite calling off the strikes, there was essentially more negotiations behind the scene to prevent long term damages to morale (i.e. workers simply retiring early or otherwise leaving the industry).