There’s an easy conclusion to draw from the latest round of layoffs at Boeing.

The aircraft and defense manufacturer’s last quarter 2008 earnings results included a $56 million loss, a result that disappointed already downbeat analysts. Management pointed to $1.8 billion in earnings lost through jet delivery delays that they blame on a machinists’ strike late last year.

The machinists went on strike for 57 days, citing as their main goal an end to Boeing's employment strategy: maintaining a trimmed-down workforce,and then outsourcing when times are good.

Before the earnings announcement , management had already scheduled some 5,500 layoffs in the commercial airplanes, shared services and defense divisions, citing the need to stay competitive during tough economic conditions. Now they have announced another 4,500 jobs are to go in their defense and corporate services divisions.

So, the easy conclusion is: the unions did this to themselves. Disrupt a company's productivity with a damaging strike during a recession, and of course it comes back to bite you through layoffs.

Union leaders disagree with this conclusion; they blame management's use of outsourcing for creating the problems in the first place. Boeing has a crammed order book throughout 2009 and into 2010. Earnings problems, unions argue, come from delivery delays caused by inefficiencies in outsourcing. They further argue that layoffs are neither necessary nor desirable, except as a small prop to the share price.

And let’s get a grip on those earnings issues: Boeing still feels able to award more than 100,000 workers with six days' bonus pay as part of a company incentive plan, from which the 27,000 members of the Machinists union are excluded. During the September 2008 strike the Seattle Times also reported that Boeing has over $10 billion in reserves. This is not a exactly a company on the brink of the abyss.

So, here’s another, deeper conclusion: Boeing is under-performing because it does not respect its people, and not just its unionised workers.

Turn back the clock to 19 September 2001. Boeing announced that it would lay off 20,000 to 30,000 commercial aircraft workers in the face of rising airlines losses. In the Seattle Post-Intelligencer Alan Mulally, president of Boeing Commercial Airplanes, is quoted as saying "This is absolutely gut-wrenching", and in the same piece "I think this is going to change all of our lives".

Doubtless, the lives of 20,000 to 30,000 aircraft workers were changed. But as it turns out, things at Boeing haven't changed at all, as those 2001 layoffs became part of a systematic shrinking of the permanent workforce in favour of an outsourcing strategy.

In 2005 Business Week reported on the previous strike that throttled Boeing. In its analysis it labored to make sense of why the strike was proving so difficult to resolve, given the relatively small sums involved in meeting the strikers’ demands. The last two paragraphs are perhaps the most telling:

"Underlying the current standoff are the poor relations Boeing has long had with the IAM [International Association of Machinists - the machinists' union]. That became clear in last-minute talks between Calhoun [Boeing Human Resources Vice-President] and Blondin [IAM District 751 President] just before the strike began. The two were deadlocked over yet another relatively minor issue, involving worker training. Blondin recalls asking: "I just don't understand why you always fight us." Blondin says Calhoun replied: "You just don't get it. We represent Corporate America. You represent labor. We are always going to be adversaries." Boeing says Blondin's account was taken out of context.

Whatever the exact figures, the sums causing the impasse are essentially rounding errors for a company that hauls in $54 billion in annual revenues. With any savings to Boeing soon to be eaten up in the strike's first month, what's really driving Boeing remains a mystery."

The article described Boeing’s vehement stance against union demands:

"Internally, Mulally has argued that meeting the IAM even halfway would be disastrous. In an early September e-mail to managers, he said union negotiators had barely moved off their original positions when the strike began and "were demanding $1 billion more than what was in our best and final offer." Mulally went on to say that meeting the "union's extreme positions" would have been a "disservice to every current and future employee, customer, and shareholder...and would have eroded our ability to compete." But it's difficult to make his numbers add up, according to accounts of the talks from both sides."

What we seem to have, then, is less a company management that is eager to balance the reasonable expectations of all stakeholders (including shareholders, also hurt by these disputes) than one that is ideologically opposed to investing in a relationship with its people. There is no long-term relationship, no compelling reason why any employee should be feeling in any meaningful sense "valued", no reason to give the company anything other than your time, let alone your loyalty or that extra 10% upon which vibrant enterprises rely. There is only this quarter's earnings.

Even if this approach brought about short term profitability - and last September's article in the Seattle Times estimated that even as the latest strike was waged, Boeing was still "paying off" the financial cost of the 2005 strike - Is this ever going to be a sustainable business model? Does it have a place in the "new capitalism"?

Boeing’s leadership has subscribed to an extreme form of capitalist ideology that treats workers like resource inputs. They think they can open the input tap or close it. But in the real world of the new capitalism, workers are still people, and no matter how hard you try and treat them as something less, they will always demand to be respected as humans; productively, socially, inconveniently human.

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