Discounts and allowances, Amazon.com, Best Buy, Washington’s Birthday, Amazon Fire 7 Giving Employee Bonuses Despite Losing $12B Last Year | Seattle Real Estate Podcast
What are we talking about today? Boeing workers, boeing from seattle, boeing workers will get bonuses despite terrible 2020. here’s. How this will work dominique gates covers the seattle times, aerospace reporter we’re, going to talk about it. You lose billions of dollars because you had a couple of planes fall out of the sky, yet you pay your employees who arguably it’s not their fault. You give them some bonuses, because people depend on bonuses for their living right, it’s, part of compensation and boeing let’s look and see what that looks like before we do if you’re new here, thanks for joining love to have you subscribe, my name is sean reynolds. I own a couple of real estate companies and i read the news that you want to hear. Let’S jump on in enough of the chit chat enough of the just tomfoolery going on get to the point man despite her despite a horrendous year in which boeing lost a record 12 billion dollars, let me read that again, boeing lost a record 12 billion dollars. They did a podcast on this, the charge offs they had for this year. Let’S see the 777. Ah, not good, we’re, going to charge off there. The 737 max not good we’re, not selling those planes, all those planes that we were going to deliver not doing that. We’Re still grounded had that throughout most of 2020. 737 got ungrounded, i think in november, so they’re on the upswing, but man, 12 billion loss and yep hey.
You guys did a great job it’s, not really your fault we’re, going to pay you some money, the company. Next month will pay out annual performance bonuses to most employees. Boeing, ceo dave, calhoun, told employees in a message thursday, that during a time when many of our customers will not be in a position to offer the same incentive, our board of directors recognizes the important strides. The team has made meaning you’re still a team you’re still alive and you’re moving forward, because the alternative is boeing goes under that’s, not a good thing, that’s, not a good thing for uh aerospace. You know air travel or seattle or everett, or you know, kansas or wherever else they’ve got their thing going. Last year after boeing’s law after boeing lost 636 million in 2019, less than a billion less than a billion just over half a billion right. They lost 636 million in 2019 due to the grounding of the 737 max. Most employees received no annual bonuses, so this is the world we live in, so we lost 636 million. We had to ground those planes. You guys aren’t getting bonus now, based on Music, 12 billion dollar loss we’re going to pay you guys, because in some wacky world this makes sense. I don’t know how does this work? I don’t know i’m a real estate guy. I don’t deal in 12 billion dollar losses, typically with a single company. Just these are astounding numbers, but we’re going to pay our people that’s.
What they’re doing last february, knowing the grounding of the 737 max, would most likely mean another year of very poor financial performance to say lightly. Boeing’S board changed the structure of the company’s incentive plan. We’Ve got to get these people some money, they’re all going to be really pissed off. Otherwise, instead of basing targets largely on profits, which we all know isn’t going to work when you hemorrhage 12 billion dollars with a b worth the money, the financial goals were tied to the timing of the first delivery of a 737 max after its ungrounding by the Federal aviation administration – and so many of you guys especially boeing boeing folks, you’re, going to understand this far better than i am. Maybe let me know in the comments what you think is going on here, but it’s kind of one of those deals. Oh, we can’t really not bonus them two years in a row and we kind of think that we’re on this upswing here let’s just change things around let’s change. Our incentive plan around we’ve got to get these people some money. We’Ve got to keep the people happy right. The faa ungrounded, the max in mid decembe, mid november. I was right there in my advanced age. I got a date and uh. It was roughly correct, very proud of myself and boeing duly delivered the first one. The first uh max in 21 months on december, 8th the delivery before year end ensured there would be a bonus under the adjusted incentive plan of it.
I wonder if anybody was like on the ground get that plane out of here. We need the bonus, get it just deliver that bad boy. I don’t care. If the wheels are falling off, get it out of here. It’S got half the seats in it. That’S, okay, ac doesn’t, work. Ah bonus. We need them, no that’s, not how that goes because boeing’s got you know: they’ve got safety protocol. They have to abide by despite the two planes that came out of the air. That stuff does happen, that’s brutal and the families that lost people lawsuits big lawsuits, boeing executive vice president of human resources, mike dambros, told employees that, despite the challenging year, the team just demonstrated resilience well they’re just doing their job right, i mean what were they? What was the adversity? They were facing: okay, so they’re working on a plane, that’s been grounded because it had some mechanical difficulties and working that through all right, they’re doing their thing. The bonuses will be distributed in cash next month and will vary according to the performance of each business unit. The metric do you think, they’ll hand it out in like envelopes cash here you go come on into the office, get your envelope of cash that’d, be cool. No, the metrics in the adjusted incentive plan came out as 58 percent of target for the commercial airlines division 86 for the defense and space division 49 for the aftermarket services, division and 64 for boeing’s corporate employees.
So the adjusted incentive plan that those are the numbers. Those are the metrics for the adjusted incentive plan. I have no idea what that means, but that sounds complicated and complex and that’s how things are at boeing. Employees also receive individual performance scores from their managers, which adjust the payout up or down. You did good. You get more, you did crappy less, but even you know even less than a 12 billion dollar loss year, you get something you’re doing. Okay, each person is given a percentage of their annual gross salary, ranging from zero percent up to seven percent as a target bonus, which is then multiplied by the above business unit percentages all right, so that’s how that worked. I still don’t really get it, but you know they’re getting bonuses so, for example, a commercial airplanes employee with a high performance. So now this is for the dummy reader. This is for me, he’s, going to explain it so, for example, a commercial airplanes employee with a high performance score of say: six percent will get a 2020 annual bonus equal to 58 percent of six percent or 3.5 percent of gross annual salary. So let’s just say: a hundred grand their salary is a hundred grand commercial airplanes employee. I have no idea what their base hour would be, so would be 3 500 bucks right, i mean just for rounded numbers for managers. The annual bonus is much more significant proportion of their income boeing declines, to say exactly how much the management incentive scheme is structured because that would piss off the employees underneath them.
You got how much what we’re doing all the hard work down here. We got wrenches, we’re, we’re we’re, actually turning a wrench and you guys are up there just talking to each other drinking your coffee, making terrible decisions. I mean what are you guys doing, we’re down here working and you got paid how much yeah they’re trying to avoid that right. Laughter and i make – and i make just but that’s kind of true for unionized employees. Bonuses are determined by the plans in their contracts. All right for the engineers and technical staff in the society of professional engineering, employees in aerospace, union, the s p e e, a their target is five percent of their gross annual pay, including overtime overtime. Big deal at boeing make a lot of money so based on the business unit, performances this means spea, a members in the commercial airplanes unit will get an annual bonus equal to 58 percent of five percent, which translates to 2.9 percent of their gross salary. All right. So 2.9 percent there. What was that previous one? Five perc uh? 3.5 percent, so you get the feeling it’s. You know four four, three, four five percent sbaa members in the defense and space unit will get a bonus of 86 percent of five percent, which is four point three percent of their gross, so they get more four point three percent of their gross salary, and i Don’T know what any of these salary levels are.
I just threw out the hundred grand because it’s basic math it’s easy to do and i’m all about that. Making less mistakes is better, especially when you’re on a podcast and you’ve got 45 000 subscribers, and they will point it out to you guys. I trust that you will point out my mistakes, because you always do like sean. What are you doing? I don’t know just reading the news, the average gross salary for spea engineers. Ah here answering my question again: in 2020, it was 133 grand. Ah, so it wasn’t that far off the average for sbaa technical staff was 102 grand. It was only 2 grand off on that one boeing said the machinist union bonus payout for 2020, which is based on productivity, productivity, safety, quality metrics that has not yet been announced to employees last year, when no other employees got an annual bonus. The machinists got one equal to 2.2 percent of their annual pay, the guys turn and the wrenches come through with the 2.2 percent bonus annual pay. I don’t know what is that a union thing? Are they getting paid because it’s in their contract? I don’t know i don’t know how most of this works. I just read the news and it is entertaining it’s like okay, so this is what’s going on behind the scenes. We do not get this kind of data on like the amazons and the facebooks and the googles we just don’t get that kind of data coming out of there right.
We don’t get these as news stories and that’s. Why? I read the stuff from boeing because there’s always somebody covering it. There probably is somebody covering you know the other big tech, but it’s, just not as exciting. We like to we like to see what you know. Boeing is doing big b. Separate figures released monday show how much boeing shrank in 2020, both overall and in washington state. During the year 14 000 boeing jobs disappeared in washington state as total unemployment here fell to 56 908, and that is when amazon surged ahead in amazon, i mean how many billion dollars has jeff bezos made this year. I think his net worth went up 75 billion in 2020 75 with a b, so i mean just incredible numbers coming out of an amazon and and um they’re doing really well and they are picking up where boeing is yeah. Our whole debacle, we got ta, we got ta, get lean and mean we need to let some people go with that amazon leapfrogged boeing in 2020, as the largest private employer in washington state overall employment company wide fell to 141 000, a drop of just over 20 000 jobs considering they lost that many billion dollars they’re doing okay, they’re doing okay right boeing has said it aims to cut further to 130 000 employees to cut further they’re going to get to 130 000 employees by the end of this year. So there are still 11 000 jobs to go.
That is a drop in the bucket, considering how many jobs are coming into washington on the daily washington state was hit hardest because boeing’s commercial airplane’s unit here has suffered the biggest hit from both the max grounding and the huge reduction in air travel due to the Pandemic, just shy of three thousand highly paid employees represented by spea left boeing in the past year, bringing the union’s membership down to 14 170.. So that is what’s going on with with boeing, and i bring up amazon because amazon is now the biggest employer. Did you guys see that jeff bezos he’s going to step down i’m, not doing an entire podcast on that, because i don’t think you guys really care somebody else going to step up, but i mean maybe he’s just like well, you know, after i made 75 million Or billion last year, maybe it’s time for me to step down. Maybe i need to enjoy myself. I don’t know a little bit of restructuring there, but you see those ceos kind of pop in pop out. Maybe they get brought back and some new ceo tanks, the company and they’re like ah bring the old guy back. He was good, he’s, a sure thing. We need to settle our company down. You see that happen pretty often right, but amazon. Just such a big company. Now it is so massive and they have such a massive presence in seattle and specifically south lake union they’re, taking over building after building after building and guess what all of this work from home remotely forever yeah.
Not so much. We are on the cusp of people. Talking about yeah our productivity numbers they’re, not really where we want to have them be plus we’ve got the vaccine, maybe maybe a quarter of the population we’re not really sure, but we’re going to start throwing out numbers that make. It seem like it’s a good idea to go back to work in the downtown course and i’ve done a bunch of podcasts on this, and i think people are going to be like whoa. Where are we there’s a lot more homeless people here? Buildings are kind of hammered on, but don’t worry amazon says it’s, okay to go back to work, so we’re gon na do that major media just did an entire podcast on how the numbers of coronavirus those are being portrayed in the medias things are getting better, even Though, here in the state of washington, they’re not but don’t worry we’re opening up we’ve gone from phase one to phase two based on the data and the science. The unfortunate thing is, i can’t figure out either the data or the science that supports this move. Other than hey election’s, over kind of the way i see it and that might be oversimplified, and that might just be ridiculous, but you know in 2020 2021. It makes about as much sense as anything right i mean just the stuff you’re, seeing in media it’s like what what what are we doing how’s that happening, you lose 12 billion dollars payout bonuses, you just restructure things.
You make things better because you don’t want uh. You know you don’t, want the animals to rattle their cages and get really worked up, that you’re, not paying them their bonuses, 12 billion dollars so where’s that money come from. If you’re, if you are, you know, hemorrhaging 12 billion dollars i’m going to say that the bonuses to the employees are incidental expenses that’s coming out of that, you know all businesses in the old school movies. You always had a desk drawer. Somebody had petty cash in that little box. You know my dad used to have one. I think we had one my initial days of reynolds and klein. We had like a checkbook in there. You know some important documents whatever that might have been, but it was like a i don’t know: it’s, like a metal shoe box that you could lock and then you would lock the desk drawer and you always had one. It was always in the bottom door, because if it was in the top drawer, somebody might find it they might, you know, unlock it and take whatever it was. You know what little is in there. You think boeing has like a big one of those with all the money in it. They’Re going to pay out people we’ve got this cash sitting around after our 12 billion dollar loss boeing’s always got cash on hand, that’s a massive company they’re. You know they’re run the way their run, so they can afford to pay out their employees other smaller businesses, not so much so boeing kind of is they’re just on a different playing field than everybody else.
I mean literally everybody else same thing with amazon same thing with facebook, all those big companies they kind of do their own thing and um they got to pay their people. So, even though 12 billion dollar hemorrhage yep, you guys, are getting paid, you guys did your work. You guys were solid this year, you met your goals, just all that typical nonsense that they talk about. This is some of the the greatest machining you guys have done on planes ever we’re gon na give you a big bonus managers and hey, hey we’re, not telling everybody else. What you made, you guys did some strong work in 2020.. Now i know at corporate as a team we lost 12 billion, but we’re not focusing on that. So we’ve redone, the metrics you guys are getting paid let’s, throw a party let’s do a party one year in the place that i work out at the bellevue club boeing employees, boeing and rolls royce. They have kind of a joint thing like their christmas party. One year the executives from boeing got really drunk and they stole our christmas bear. You know we have like a life size, christmas, bear that sits in the lobby of our hotel, they jacked it and they they hijacked it and they got in a cab and they left somebody had to chase down the bellevue club christmas bear because boeing executives got Too, drunk that’s a true story, that’s told by a lot of the old time, people over at the mountain club, it’s pretty funny can’t, you just see like an old executive who you know, makes like 25 million dollars i’m.
Taking this bear we’re going, i mean, and then bellevue club don’t take the bear. No, not the christmas berries got a christmas hat and all decked out looks just christmas. Don’T take the bear, i guess it was an expensive bear. They. You know there was some complaints made and hijinks executive level, hijinks it’s what you do when you can. You know record a 12 billion dollar loss and then pay out your employees, much big bonuses, different level, different playing level right, all right, that’s it on this one. Um and if i’ve been if i’ve offended you or if i’ve interpreted any of this wrong and you’re a boeing employee, let me know i’m not trying to do that. I’M. Just reading the news here, but it is interesting, it’s an interesting story right because every other business that that would happen to yeah bonuses this year, people not so much we’re. You know never mind the fact we can’t afford it. We don’t have the cash we just lost 12 billion dollars, that’s like any normal company, losing like a million how’d. You do this year, not good. How come we lost a million bucks? Oh, am i still getting my bonus? Uh? No, no you’re, not! No! We don’t have any money, oh yeah, that makes sense boeing different playing field news. You guys get a bonus, maybe even more than last year. Definitely more than most people got last year, it’s what’s, going on at the big b right all right, that’s it.