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Boeing Union Advises Machinists to Strike

Boeing Union Advises Machinists to Strike
Wednesday August 31, 1:18 am ET
By Allison Linn, AP Business Writer
Leaders of Machinists Union Advises Workers to Strike After Viewing Final Boeing Offer

SEATTLE (AP) -- Leaders of more than 18,000 Machinists are advising workers to reject Boeing Co.'s final contract offer and strike -- a scenario a top Boeing executive called devastating to the company's prospects.

Union members are voting on the three-year offer Thursday, with the current contract set to expire Friday.

In a statement late Tuesday on its Web site, Seattle-based Machinists Lodge 751, which represents workers who assemble commercial airplanes, said the aerospace giant was insisting on concessions and takeaways in a "corporate strategy to break the workers who have built this company."

If the union members vote to strike, Alan Mulally, head of Boeing's commercial airplanes division, said the company would have no choice but to slowly shut down operations. And if that happens, Mulally said, customers have been clear they'd likely take their business to Boeing's prime rival -- Airbus SAS.

"I just cannot emphasize enough what a strike would mean to us because we would absolutely be walking away from our commitments to our customers," Mulally told a news conference Tuesday. "There's just no way we would recover."

It's been 10 years since the union went on strike.

"No one ever wants to strike, but withholding your labor is the only way to stop this attack on American workers," the union statement said.

Boeing said late Tuesday it hoped employees would examine the proposal seriously.

"We'll let our employees decide," Boeing spokesman Charles Bickers said.

The fierce round of final negotiations comes as Boeing is enjoying a strong rebound in its commercial airplanes division, giving the union a burst of confidence in talks.

The last time Boeing sat down to bargain with the Machinists, it was fighting through a steep downturn in business in the aftermath of the 2001 terrorist attacks. Federal mediators stepped in after the Machinists began voting to authorize a walkout in 2002.

In this round of talks, the union has stressed that the company has rebounded considerably, and said workers deserve their share of that.

"From the start, the union has been very clear about our top issues" including pensions, health care and job security, the union statement said.

The union criticized Boeing's health care and job security proposals and a company proposal to eliminate new hires from future retiree medical benefits.

On the Machinists' top issue, the union said Boeing's final offer of a pension of $66 per month for every year worked, up from $60 currently, was "insulting."

For about 17,500 affected Machinists in the Puget Sound area and Gresham, Ore., the final offer increased lump-sum payouts to $6,000 over two years. That total could increase to a maximum of $9,000 if employees choose to roll the money into a retirement plan.

The company also added a 2.5 percent wage increase in the third year of the contract.

For about 900 Machinists workers in Wichita, Kan., the company offered no general wage increase, but a one-time payout of $2,800, which would increase to $4,200 if any employee chose to deposit that money in the Boeing 401(k)-type retirement account.

"They are trying to buy you with cash, while dividing and hurting you in other ways," the union statement said. "We will not let this company divide us. Why would we allow them to separate Wichita out of the economic package?"

Machinists Lodge 751 is negotiating for employees in all three areas, but certain terms of the contract differ based on location. Workers represented in the talks now receive an average of $59,000 a year. The company said they would earn about $62,500 a year by the end of the new contract, excluding overtime and other extra payouts.

Chicago-based Boeing is striving to beat Airbus SAS on new commercial jet orders for the first time since 2000. Boeing had racked up 529 orders through the end of July, compared with 299 orders for Airbus.

Airbus is ahead on deliveries so far, with 216 planes as of the end of July, compared with 179 for Boeing. Boeing expects to deliver 320 airplanes this year, and Airbus expects to deliver 360.

Boeing is also offering an incentive pay program that would provide five days of pay to Oregon and Washington workers if the company meets financial targets and up to 15 days' worth if the targets are exceeded. But it has dropped a $1,000 payout that was meant to jump-start that program, in exchange for increasing the lump-sum payouts.

Cost-of-living provisions would boost base wages by about 1 percent in each year of the contract.

The company also said it would offer two health plans with the option of no premium, though premiums would increase for most health care plans.

Bickers said Boeing continues to shoulder most of worker health care costs, and defended the company's retirement package as one of the best in the industry.

Analyst Richard Aboulafia with the Teal Group said union workers could expect to get other concessions but should expect a tough fight over pensions. That's because pensions represent a huge fixed cost that the company can't scale back in a downturn.

Still, Aboulafia said the union is in a strong position since Boeing cannot afford a long-term strike that would disrupt airplane production just as business is picking up.

http://www.iam751.org

http://www.boeing.com/negotiations

AP Business Writer Elizabeth M. Gillespie contributed to this report.


LINK: http://biz.yahoo.com/ap/050831/boeing_union_talks.html?.v=1