Implications Of Today's Boeing Union Vote

The Machinists Union wants to represent workers at the Boeing Co (NYSE: BA) plant in South Carolina, and workers will be voting Wednesday to make it happen. The Machinists already represent the majority of the Boeing factory workers across the country, but Boeing specifically chose to build its new plant in South Carolina back in 2011 so it would be a non-union plant. Only 2 percent of South Carolina workers are unionized, the lowest share of any state in the United States.

A victory for the union would turn up the heat even more on Boeing, which has been under fire from the Trump administration. President Donald Trump bashed Boeing for the cost of the new Air Force One, even threatening to “Cancel order!” on Twitter.

Other Relevant Elements Of The Boeing Story

In addition, Trump’s head-butting with China and Iran has threatened deals two of Boeing’s largest international customers.

Boeing’s South Carolina workers want to be paid in-line with their unionized peers in Washington. Boeing currently pays its Washington workers roughly $10/hour more than its South Carolina workers.

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Boeing has argued that the pay discrepancy has to do with the economics of the local market. The company point out that South Carolina workers are currently paid more than unionized workers in Boeing’s Alabama plant.

If workers vote to unionize in South Carolina and Boeing is forced to increase wages, the company will likely feel more pressure to further reduce its workforce. Boeing cut nearly 11,000 jobs in 2016 and plans on further cuts in 2017 as well.