Boeing, striking machinists' talks break down

[October 14, 2008]  SEATTLE (AP) -- Boeing Co. says renewed negotiations with its striking machinists broke down over an issue crucial to the company's "long-term competitiveness." A labor leader says the union was being asked to bargain away 2,000 jobs.

The failed talks are the latest twist in the five-week-old strike by more than 27,000 commercial jet production workers, with both sides seemingly far apart on key issues as the walkout enters its 39th day.

The strike has halted jet assembly at Boeing plants in Washington, Oregon and Kansas.

Talks between the two sides resumed Sunday for the first time since machinists went on strike Sept. 6 over issues that include job security, pay, retirement benefits and health care.

Doug Kight, Boeing vice president of human resources and the company's chief negotiator, said the company was disappointed in the breakdown late Monday.

"We want to resolve this strike so employees can return to work, but we cannot sacrifice our ability to continuously improve productivity and our long-term competitiveness for an agreement," Kight said in a statement.

A sharper-toned statement issued by Tom Wroblewski, president of Machinists District 751, squarely blamed the breakdown on the issues of job security and outsourcing.

"The company is attempting to put the union in an unacceptable position to bargain away our members' jobs," Wroblewski said, adding one area of dispute was the job security of 2,000 union members who provide services ranging from material delivery to distribution of parts.

Wroblewski contends Boeing wants to outsource those jobs. Boeing spokesman Jim Proulx declined comment late Monday on the union's specific allegations.

"It has become apparent that the long-term strategy of The Boeing Company is to eliminate these IAM positions and replace the union workers with outside suppliers," Wroblewski said. "The words 'flexibility' and 'competitiveness' for Boeing appear to mean eliminating IAM jobs."

In his statement, Kight said, "Given current economic conditions, it is now more important than ever that we retain the ability to respond to a dynamic, uncertain environment."

No new talks were scheduled after a federal mediator adjourned Monday's session.

Before the machinists walked out in September, a two-day contract extension requested by Washington Gov. Chris Gregoire also failed to bring results.

Besides outsourcing, other key unresolved issues include health care, wages and pensions, Wroblewski said.

Analysts have said they think Boeing is losing $100 million or more in deferred revenue each day of the strike, for a total approaching $4 billion.

Outsourcing has been a key issue for the machinists from the start. Union officials have said their members should at least have the right to bid against outside companies for work traditionally done by the machinists. They note that problems with subcontractors caused repeated delays in testing and delivery of the all-new 787 jet well before the strike.

The walkout has further pushed back that program, all but eliminating any chance of a test flight in the fourth quarter of 2008 as planned and risking further delays of deliveries to customers anxious for the fuel-saving, technologically advanced aircraft.

During a 28-day strike against Boeing in 2005, settled largely with retention of existing health coverage, the company delivered three planes and missed more than two dozen deliveries.

Despite the nation's economic crisis this year, Boeing Chief Executive W. James McNerney Jr. has insisted that the Chicago-based company's seven- to eight-year order backlog remains solid. Boeing delivered 10 planes in September after the strike began, saying those aircraft had been largely finished before the walkout, but missed about 30 deliveries because of the dispute.

Union members, meanwhile, are receiving $150 a week in strike pay, less than one-seventh of their average from Boeing. Union leaders have said those payments from the union's $140 million strike fund, which continues to receive dues revenue from members in non-striking locals, could continue for five or six months.

[Associated Press; By MANUEL VALDES]

Associated Press writer Tim Klass contributed to this story.

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