Boeing, machinists in tentative deal to end strike

[October 28, 2008]  SEATTLE (AP) -- Boeing Co. and its Machinists union reached a tentative four-year settlement to end a strike that has shut down the company's commercial airplane operations since Sept. 6, union and company spokesmen confirmed.

Boeing and the Machinists union said the deal would enhance job security.

Francis "Frank" Larkin, a spokesman for the International Association of Machinists and Aerospace Workers in Washington, D.C., told The Associated Press the deal was reached shortly before 9 p.m. EDT Monday, in the fifth day of talks at Federal Mediation and Conciliation Service headquarters in Washington and the 52nd day of the walkout.

Analysts have estimated the strike has cost the world's No. 2 commercial airplane maker roughly $100 million a day in deferred revenue and production delays on its highly anticipated next-generation passenger jet.

In a news release, Boeing Commercial Airplanes President Scott E. Carson said the agreement "rewards employees for their contributions to our success while preserving our ability to compete."

Boeing spokesman Tim Healy in Seattle said the settlement includes varying degrees of change in all three parts of the contract that deal with outsourcing -- provisions for subcontractors to deliver parts and supplies to the shop floor, procedures for the union to bid for work before it is outsourced and a section on maintenance work

.

Healy said it took until Saturday to reach agreement on job security, with the two successive days of talks devoted primarily to economic issues.

Last week, Chicago-based Boeing said that without the strike, it would have delivered 119 planes during the third quarter, but instead delivered just 84 -- 35 fewer than planned.

According to a statement issued by the union, the settlement "will provide job security for its members and limit the amount of work outside vendors can perform in the workplace."

IAM represents about 25,000 workers in and around Seattle, 1,500 in Gresham, Ore., and 750 in Wichita, Kan. Participants in the talks included IAM President Tom Buffenbarger and General Vice President Rich Michalski.

"I think we've addressed all the major concerns that our members have had," Buffenbarger said by telephone.

The union withheld additional details of the agreement pending distribution to the membership, but its statement said the pact was unanimously endorsed by IAM negotiators and will be submitted for a ratification vote in three to five days. A simple majority is required for approval.

"This tentative agreement is the result of hard work and great sacrifice by many people," the union's aerospace coordinator and chief negotiator, Mark Blondin, said in the statement, "but no one deserves more credit than the workers at Boeing, who conducted themselves with dignity and determination throughout this ordeal.

"On behalf of the entire negotiating committee, I want to say it has been our honor to serve as their representatives."

The walkout began three days after Boeing's last offer was rejected with an 87 percent strike vote. Two days of last-ditch talks to avoid a strike failed, and another two-day round of negotiations collapsed Oct. 13. Mediators were involved in both of those efforts.

Blondin said after the last unsuccessful round of talks the sticking point was Boeing's insistence on moving to replace about 2,000 union workers who distribute parts, deliver materials and perform similar tasks with outside suppliers and subcontractors.

Boeing offered to keep the 2,000 affected workers on the payroll for the term of the contract but not any longer, Blondin said.

Parts and supply delivery to the shop floor has been a sore spot with the union since 2002, when the Machinists voted to reject a contract offer giving subcontractors access to the shop floor for the first time but failed to muster the two-thirds vote required for a strike. As a result, Boeing was able to put the terms into effect without union agreement.

The Machinists sought to remove that provision during their 28-day strike in 2005 but settled without winning on that issue.

The current strike is the Machinists' fourth against Boeing in two decades. The union was out for 69 days in 1995 and 48 days in 1989.

About seven weeks into the strike in 1995, angry union members voted down a settlement recommended by their leadership, later approving a substantially improved offer.

"The members make that final decision," Buffenbarger said, "but I'm hopeful."

An end to the strike would refocus attention on Boeing's new 787 passenger jet. To date, 58 customers have ordered 895 of the new planes, touted for their promise of greater fuel efficiency due to its construction from lightweight carbon-fiber composite parts.

Even before the strike, the jetliner had been hampered by lengthy production delays due to supply chain glitches.

Boeing has lost credibility, and billions of dollars in expected additional costs and penalties, with three delays in the 787's delivery schedule that leave it more than a year behind the original schedule.

[Associated Press; By TIM KLASS]

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