Boeing whistleblower says warnings were ignored; IBM tells managers to return or quit

In this week's HR news round-up: IBM gets tough on managers not coming to the office; whistleblowers berate Boeing's culture of speed over safety:

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Feb 1, 2024
This article is part of a series called The Most Interesting HR Stories of the Week.

Boeing whistleblower says warnings about defects were ignored

As The Federal Aviation Administration (FAA) investigators seek to understand why a hole blew open in the fuselage of a 737 MAX 9 Alaska Airlines flight earlier this month, former employees claim warnings over production defects were ignored. According to ABC, which spoke to the ex-employees, there was a culture of that prioritized “production speed over quality and safety, leading to defects being missed or ignored to meet deadlines.” Said one whistleblower, John Barnett: “Once you understand what’s happening inside of Boeing, you’ll see why we’re seeing these kinds of issues.” Barnett worked on the Boeing factory floor, overseeing aircraft production and carrying out safety checks until he retired in 2017. “This is a Boeing issue, this is not a 737 issue,” he said. Barnett said he reported several safety issues to his superiors at the company, including defective parts going missing and allegedly being installed on aircraft without first being repaired. When these reports met a dead end he took his concerns to the regulator, the FAA, who investigated and substantiated Barnett’s complaint that Boeing had lost track of hundreds of faulty parts which could not be found. The Wall Street Journal also reported on Monday that a number of Boeing officials believe bolts needed to secure the plug door (which blew off the Alaska Airlines jet), were missing when the jet left Boeing’s factory.

IBM tells managers ‘return to office, or quit’

According to reports from Bloomberg, IBM has told its managers to either return to the office, or quit. A just-surfaced memo, dated 16th January, quotes senior VP John Granger, who says all managers based in the US must now report to an office or client location for a minimum of three days each week, irrespective of their current work arrangement. Apparently, the company will utilize badge-in data to evaluate individual attendance. Managers who don’t relocate or are unable to secure a role that’s approved to be remote must “separate from IBM.” In a response to Bloomberg, IBM said: “IBM is focused on providing a work environment that balances flexibility with the face-to-face interactions that make us more productive, innovative, and better able to serve our clients. Consistent with that approach, we’re requiring executives and people managers in the United States to be in the office at least three days per week.” It comes as separate data shows that in the ten largest business districts in the US, the presence of employees in offices has remained at approximately 50% of pre-pandemic levels, with technology-centric regions, such as the San Francisco Bay Area, recording even lower percentages. A recent survey by Resumebuilder showed that 90% of companies plan to stop working from home by the end of 2024. About 24% said they would threaten to fire employees who don’t comply.

GM workers who went on strike in 2023 will still get big profit-share checks

They helped cripple the US car industry by going on strike last year, but the workers at GM who inflicted a big drop in company profits will only miss out by the smallest amount possible when they collect their profit-sharing checks. GM has announced that its 45,000 US hourly workers will receive a profit share check of up to $12,250. It’s down only slightly from last year’s $12,750, because the formula used is based on $1,000 per every $1 billion in annual earnings before interest and taxes, or pretax profits for North America. For 2023, GM’s North America pretax profits were $12.3 billion, down 5% from $12.9 billion a year ago. The checks are paid out in increments of $250, which is why it is $12,250. GM spokesman David Caldwell said. According to the formula, if an hourly employee accrued 1,850 or more compensated hours during 2023, they would receive the full payout. Eligible workers will receive their checks in late February. Ford Motor Co. reports its fourth-quarter and full-year results on Feb. 6. Stellantis, which makes Chrysler, Dodge, Jeep, Ram and Fiat brands, reports on Feb. 15. Its payout to union-represented workers for 2022 was the largest of the Detroit Three at $14,760.

Federal workers stage hunger strike in protect of Biden’s support for Israel

An unprecedented one-day hunger strike is taking place today by hundreds of US government workers, as they protest against the Biden administration’s support for Israel. The workers – from the like of the Defense and State Departments – have taken the decision to fast in support of Palestine and the 26,000 people, mostly civilians, that have been killed since the war began. The activist federal employees say their goal is to force a conversation in their offices. They claim many federal employees support a ceasefire but are scared of speaking out for fear of retribution. The fasting employees are all members of staff group, Feds United for Peace. A federal employee speaking on behalf of the group said the Day of Fasting is a response to Israel’s use of “starvation as a weapon of war by intentionally withholding food from entering Gaza”. Other groups of federal employees supporting a ceasefire in Gaza have also emerged, including one called Staffers for Ceasefire. It recently called upon President Biden to demand a ceasefire in the ongoing conflict in the Middle East. The Biden administration has so far sent upwards of $14 billion to Israel, alongside significant military support. The United Nations estimates the number of displaced Palestinians to be 1.9 million people – around 85%of its population.

American Airlines to lay off hundreds of staff

Airline company, American Airlines, has announced it is laying off 8.2% of its 8,000-strong customer service-related positions – in a decision that will see around 656 employees lose their jobs. The move has been made on the back of it reorganizing is customer service teams from separate teams to address different issues, to a new structure that will consolidate assistance into a single team. The layoffs will impact 335 employees who work in Phoenix and 321 in Dallas-Fort Worth. These workers currently assist passengers with their lost luggage and AAdvantage loyalty program service groups. According to a statement released by the airline, it said: “Today, we announced updates to our contact center organization that will help us better serve our customers. As part of these updates, we are creating a new Customer Success team that will be dedicated to providing more convenient, elevated support to American Airlines customers with some of their most complex travel needs.” According to USA Today, affected employees will work as usual until March 30, and they can apply for one of the 135 spots on the new Customer Success team, or one of the 800 other open American Airlines jobs. Otherwise, they will get severance and job placement support.

Walmart managers get even more of a sweetened deal

Hot on the heels of news last week that Walmart managers would be getting a 9% pay rise (a move that will see annual base salaries for managers range from $90,000 to $170,000), comes news that they’ll get even more perks. Walmart has announced that US store managers will receive up to $20,000 in Walmart stock grants every year. In defending the additional perk, Walmart says it hasn’t made any changes to store managers’ pay structure in more than a decade. Walmart said the amount of the annual stock grant is based on the store format. US managers of the sprawling supercenters, which are around 180,000 square feet, will receive $20,000 in stock grants. Those leading the smaller Neighborhood Market stores — as well as the so-called “division 1” stores, which sell mostly general merchandise — will get $15,000 in stock grants. And those who lead the Hometown stores, a smaller version of the division 1 stores, will receive $10,000 in stock grants every year, the company said. Walmart said the stock grants will vest over a three-year period, with ownership for one-twelfth of the grant total coming every quarter. The grants will be given in April. “It’s fair to say that we’re asking them [managers] to act like owners and to think like owners, ” said John Furner, CEO of Walmart U.S. division in a call to reporters on Sunday. “And with this announcement, they will all be owners, and many of them do own stock.”

Job openings continue to rise – but quit rates slowing

New Labor Department figures reveal job openings rose unexpectedly in December 2023 (normally a quiet month) – indicating that it may be too early yet for the Federal Reserve to consider cutting interest rates. In fact, financial markets have lowered the odds of a rate cut in March to well below 50%. The data shows there are 1.44 positions for every unemployed person, with job openings up by 101,000 to 9.026 million on the last day of December. Data for November was revised higher to show 8.925 million unfilled positions instead of the previously reported 8.79 million. Economists polled by Reuters had forecast 8.75 million job openings in November. Job openings peaked at a record 12.0 million in March 2022. Of these job openings, there were an additional 239,000 job openings in the professional and business services sector in December, as well as notable increases in manufacturing, retail trade, healthcare and social assistance as well as financial activities sectors. Hiring rose 67,000 to 5.621 million, mainly from professional and business services, accommodation and food services as well as state and local government. However, against this, data shows that quit rates have fallen – a factor which could slow wage growth. The number of people quitting their jobs is now at the lowest it has been for nearly three years.

This article is part of a series called The Most Interesting HR Stories of the Week.