Boeing negotiation with labor unions - Essay Example

This paper seeks to examine the construct of power disparity in negotiation, within the context of Boeing versus the machinists’ labor union, in the latter’s recent project of building the Boeing 777X plane. In November of 2013, Boeing made an announcement that the company was launching an expansion project, which was to entail construction of its newest line of 777X planes. Being located in Puget Sound, Washington, the State’s legislature accorded Boeing the biggest tax subsidy ever allotted to a company not just in the state, but also nationally.

Washington State gave Boeing the grant with the primary intention of making sure that the company did not transfer its operations to another state. The company then offered its workers a deal, which required them to accept reduced retirement benefits, take about sixteen years before reaching the maximum wage level, as opposed to the usual six year period and adopt a contribution savings structure instead of the retirement pension. Boeing required the International Association of Machinists (IAM), which represents machinists, to convince its members to accept this offer or they would not be involved in making the 777X planes, since operations would be shifted to another state with more favorable terms.

The machinists union first turned down Boeing’s offer and the company consequently began seeking out other states that would be willing to offer more public money, while accepting its offer. At least twenty states responded to Boeing including South Carolina, Missouri and Alabama, all eagerly willing to offer the company lucrative subsidy packages (Gates n.pg). To efficiently address the different challenges posed by power differences in negotiation, it is imperative for one to first comprehend power as basic concept.

From the most encompassing and elemental perspective, power refers to the ability of a person or