BY SCOTT BREEN
SEATTLE, Washington - On July 23, the European Union endorsed the main points of the planned merger between Boeing Co. and McDonnell-Douglas Corp., but delayed formal approval for another week. The EU had threatened to veto the merger and levy hefty fines on Boeing, raising the specter of a trade war between Washington and its competitors in Europe.

At the same time, Boeing and the big-business press in the United States have used the dispute to draw workers behind a nationalist framework of defending "our" company and "our" country, and to justify demands for concessions from the unions. Boeing's competitors in Europe are doing the same.

U.S. president William Clinton stepped in, warning that Washington would retaliate if the EU went ahead with the announced sanctions. "We have a system for managing this through the World Trade Organization and we have some options ourselves when actions are taken by Europe in this regard," Clinton stated a few days before the July 23 meeting in Brussels of the European Commission, the EU executive body. U.S. government officials had hinted they may impose import duties on aircraft manufactured in Europe and restrictions on flights from Europe.

With the $14 billion acquisition of McDonnell-Douglas, scheduled to go into effect August 4, Boeing will take a major step toward greater hegemony in the aerospace industry around the globe - controlling two-thirds of the world commercial jet market and becoming the second largest military supplier to the U.S. government. The prospect has upset capitalist powers in Europe that are the main competitors of the Seattle-based giant.

Jean Pierson, Airbus Industrie's general manager, charged Boeing with trying to "monopolize the civil aviation manufacturing sector." Airbus is a consortium of four aerospace companies created by the governments of Britain, France, Germany, and Spain. Its share of the commercial jet aircraft market has been about 35 percent, compared with Boeing's 60 percent and McDonnell Douglas's 5 percent.

"We have reached a satisfactory conclusion with Boeing," said Karel Van Miert, the EU's top antitrust official July 23, after Boeing offered some concessions. "I'm confident we'll have a formal decision next week."

Van Miert had earlier called the merger "totally unacceptable." The EU reaction, in turn, had drawn fire on this side of the Atlantic. McDonnell Douglas chairman Harry Stonecipher attacked Van Miert for acting on behalf of Airbus, saying, "It's obvious he wants a [trade] war."

"A trade war between the U.S. and Europe costing Europe far more than the U.S. seems likely unless Brussels backs down, or suddenly conducts a much-needed rethink of its dubious jurisdiction in this matter," warned the lead editorial in the July 21 Wall Street Journal.

Conflict is far from over
Even after the announced truce, the dispute is far from over. French government officials, who had urged the European Commission to maintain a firm stance against Boeing and Washington, continued opposing a settlement. "The Americans have made some last-minute concessions, but in my mind they don't go far enough," Pierre Moscovi, Paris's European Affairs Minister, told French radio July 23. The deal, he said, would "throw intolerable barriers to competition."

On July 23, Boeing promised the EU it will not enforce "sole-supplier" provisions of contracts with U.S. airlines. Airbus officials have been particularly incensed with Boeing's recent agreements with American, Continental, and Delta Airlines, making Boeing their exclusive, long-term supplier of jets.

These multibillion dollar deals - 244 aircraft valued at $17 billion - shut out Airbus for at least 20 years, and provoked Airbus and EU officials to lash out at Boeing. "We will fight like hell," said Ian Massey, Airbus controller. "We won't be bullied out of the business."

Boeing promised the EU it will not enter new "sole- supplier" contracts, unless a competitor offers such deals. It also agreed to give its rivals access to some of its aviation technology, funded by the government through military contracts, for a fee.

At the heart of the conflict is Boeing's effort to maintain and improve its dominant position in the market, while Airbus aims to boost its market share from its current 30 percent to 50 percent. This means both companies are trying to lower the sticker price on airliners, while shoring up their profit rates by cutting costs - especially labor costs.

In this battle, Boeing, which after the merger will employ more than 200,000 workers, is inching ahead.

Airbus Industrie's profits fell 17 percent to $410 million in 1996, amid lower sales of nearly $9 billion, according to the annual report of Daimler-Benz Aerospace, the German partner in Airbus. Boeing's profits, on the other hand, rose 178 percent to $1.1 billion in 1996, on sales of nearly $23 billion.

A major zone of commercial combat between the Airbus consortium and Boeing today is Asia, especially China. Boeing officials have campaigned for greater U.S. penetration of the Chinese market. The company has sold $1.3 billion in planes to China this year so far. Airbus Industrie also won a $1.5 billion order from Beijing for 30 planes, during French president Jacques Chirac's recent tour there.

Business with military
The controversial merger is part of Boeing's plan to increase its weight in the military as well. The company had already acquired Rockwell North American's military business last fall. During the 1990s, a wave of mergers has restructured corporations producing for the U.S. military and space programs.

The largest U.S. military contractor is Lockheed-Martin, the result of a merger between Lockheed and Martin Marietta, with 1996 sales to the Pentagon of $12 billion. McDonnell Douglas was second with $9.9 billion, and Boeing was eighth with $1.7 billion. The merger will put Boeing neck and neck with Lockheed.

Companies have used mergers as part of their "reengineering" and "downsizing" schemes, aimed at increasing their profits on the backs of workers. The number of aerospace workers has declined by 39 percent since the opening of this decade, from a peak of 1.33 million in 1989 to 806,000 in 1996.

Boeing's studies project sales of over $1 trillion in new airplanes over the next 20 years, in expectation of air traffic expansion, implementation of laws requiring planes that are less noisy and burn fuel more cleanly, and the retiring of older jets.

To be in the best position to win the lion's share of new contracts, Boeing is trying to cut down the "cycle time" for producing a jet - how long it takes from the time a plane is ordered until delivery. The company's goal is to reduce cycle time to six months. Boeing is also on a "drive to improve productivity, doing more with fewer people," said a recent article in the Seattle Times.

Attacks on the union
Boeing plans to jack up production levels from the current rate of 29 airplanes per month to 40 planes per month by the end of this year, and hinted it might try to produce 48 aircraft per month.

Last year, the company hired or recalled 21,000 workers. It has already hired another 10,000 this year.

Boeing has also begun instituting a "lean manufacturing" policy to increase labor productivity through job combinations and speed-up. At a recent conference, Boeing executive vice-president Robert Dryden summed up the essence of the concept. "Quick and crude is better than slow and elegant," he said.

Earlier this year, Boeing tried to transfer 1,500 jobs of expediters into salaried, nonunion positions. Expediters are organized by the International Association of Machinists (IAM), the largest union at Boeing with 30,000 members. The union held off this attack, but the company has indicated it will continue to push in this direction.

Boeing is also trying to lengthen the workday and at the same time cut down overtime pay. Many union members now work mandatory 10-hour or 12-hour shifts, and are forced to work two out of every three weekends, both Saturday and Sunday.

Management recently tried to blackmail the IAM into accepting a 10-hour-day, four-days-a-week schedule for workers at the paint hangar. These workers would get straight-time pay, even if they worked on weekends. The union contract mandates overtime premiums when the workday exceeds eight hours and during weekends. If the union didn't agree, company officials threatened, Boeing would send its airplanes to another company for painting. The union rejected this proposal as an open breach of the contract.

As the competition between Boeing and Airbus heats up, both corporations are forcing their respective workforces to pay the price for speed-up and longer workdays and workweeks. As a result, accidents and health problems will increase and airline safety will be compromised. Investigations of air plane crashes over the last two years have revealed problems with the rudders of Boeing 737 jets and possible problems with the center fuel tanks of the 747 jumbo jets.

Boeing knows it will meet resistance to its plans for concessions. Both management and union members remember the 69-day strike in 1995, when workers fended off some takeback demands. The solidarity and unity achieved by the striking Machinists strengthened the union and increased workers' self-confidence to stand up to the bosses.

Workers at McDonnell-Douglas in St. Louis, organized by the United Auto Workers, waged a strike of 99 days in 1996. With the merger, Boeing must now take on these workers too.

Scott Breen is a member of IAM District 751 in Seattle, and works at Boeing. He is also the Socialist Workers candidate for mayor of Seattle.  
 
 
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