IAM District 751
Machinists Union
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  • SEC Rejects Shareholder Initiatives
    Updated On: May 08, 2018

    Late last year we reported that District 751 was strongly supporting two shareholder initiatives for the April 30 Boeing Shareholders meeting.

    We strongly believe the ideas in these two initiatives were worthy of a vote by the shareholders; unfortunately, Boeing challenged both proposals and sought to have them excluded from shareholder approval and the Securities and Exchange Commission (SEC) agreed with Boeing and denied appeals to move the initiatives forward. As a result, the items were not in packets mailed to shareholders to vote on in the Company’s annual proxy statement. The more conservative SEC this year was much stricter in approving any initiatives submitted from shareholders, siding more heavily with the board of directors.

    Click here to view proposal requesting board of directors to include certain criteria in process for selection new aircraft production sites.

    Click here to view proposal requesting board of directors disclose detailed information, omitting proprietary information, of Boeing’s site selection process and criteria.

    While it was a long shot for these proposals to be included in the shareholders’ packets for a vote, we believed they were worth pushing forward to start conversations on the narrative that supports building the next airplane in Washington to give Boeing the best chance for success in launching a new airplane.

    IAM 751 retired member and long time activist John Jorgensen and his wife Pat put forth one proposal. John is a 50+ year member and was one of the “Incredibles” from the initial 747 line. After dedicating a lifetime to Boeing, he wants to ensure this company is prosperous years in the future, which was the goal of his proposal.

    John’s proposal requested the Board of Directors include certain criteria in the Company’s process for selecting new or expanding existing sites for the Company’s new models of aircraft production locations. It went on to say Boeing should select locations that have the ability to support the core operations of the business effectively and listed important factors to consider.

    The second proposal was submitted by Neil Gladstein, who works in the IAM Strategic Resources Department and is also a shareholder. This proposal simply asked that the Board disclose detailed information, omitting proprietary information, of Boeing’s selection process and criteria for selecting new or expanding locations for the Company’s new models of aircraft production. It asked that this report be made available to shareholders.

    The goal of both proposals was to have more transparency so shareholders’ interests are protected. Each proposal was designed to ensure history did not repeat itself and that lessons were learned from the high costs associated with the 787, where Boeing purposely chose the riskiest option of outsourcing the plane around the world. This decision severely impacted the profitability of the 787 to the tune of more than $30 billion in deferred costs. This past decision made the overall profit on the 787 questionable and therefore impacted shareholder value. That is why we believe shareholders should have been allowed to vote on the proposals to ensure the riskiest option is not chosen going forward and the site selected provides the best chance for success with a new airplane.

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