Video: Boeing workers reach tentative agreement

updated 10/28/2008 2:53:33 PM ET 2008-10-28T18:53:33

Boeing Co. and its striking Machinists union have agreed to a tentative four-year labor deal that could end a 53-day walkout that has shut the company’s commercial airplane factories, cut into profits and delayed jet deliveries.

The union representing 27,000 production workers in Washington state, Oregon and Kansas went on strike Sept. 6 after rejecting a final contract offer by the company. Sticking points were job security and health benefits. More than 90 percent of members are expected to vote on the agreement, reached late Monday, in the next three to five days.

Members of the Machinists union walked off the job even as the economy slid into turmoil and credit markets froze. The seven-week strike is their fourth against Boeing in two decades and has cost Boeing an estimated $100 million a day in deferred revenue and pushed back scheduled deliveries of its commercial airplanes, including its long-awaited 787 jetliner.

It remains unclear how long it will take Boeing’s commercial aircraft business to return to pre-strike production levels once the workers return. Boeing representatives said the company will conduct an assessment once work resumes.

But Boeing’s chief financial officer, James Bell, said in a conference call last week that the company may be able to resume pre-strike production within two months. “Hopefully we can do it in a lot less time,” he said.

Boeing spokesman Tim Healy said the company hopes union employees will vote in favor of the proposed deal and return to work beginning next week. “In 2005, we gave them two weeks to return to work and we want to make it shorter this time,” he said.

Boeing and Machinists union representatives said the proposed deal would enhance job security, the thorniest issue in the dispute.

Early Tuesday, striking workers huddled around a burn barrel outside a 737 plant near Seattle and said they had seen only a summary of the proposed deal and wouldn’t decide how to vote until they see the details.

“We’ve just seen the good parts,” said Clay Tinker, a technician who joined Boeing in 1989. “We haven’t seen the fine print, just the highlights.”

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.

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.”

Healy, the Boeing spokesman, said the settlement included provisions for subcontractors to deliver parts and supplies to the shop floor and procedures for the union to bid for work.

Negotiations with a federal mediator started Thursday in Washington, D.C. under a news blackout. It took until Saturday to agree on job security issues and two more days to agree on wages, retirement and medical care, Healy said

The union represents about 25,000 workers in the Seattle area, 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.

A ratification vote on the pact, which was unanimously endorsed by union negotiators, will be held in three to five days. A simple majority is required for approval.

According to a union statement, the deal provides total wage increases of 15 percent over the 4-year life of the contract, compared with a total of 11 percent over three years in Boeing’s last pre-strike offer.

It includes bonuses over the first three years of the contract, pension increases and the preservation of current medical benefits — an issue Boeing had sought to change.

The pact also strengthens provisions for the union to bid against subcontractors for work and includes agreements to protect jobs held by workers such as forklift drivers and to limit vendor deliveries to the shop floor.

The union’s aerospace coordinator and chief negotiator, Mark Blondin, said the sticking point in the last unsuccessful round of talks was Boeing’s insistence on replacing about 2,000 union workers who distribute parts, deliver materials and perform similar tasks with outside suppliers and subcontractors.

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 strike in 2005 but settled without winning on that issue.

In addition to the current walkout, the union struck for 28 days strike in 2005, 69 days in 1995 and 48 days in 1989.

The latest walkout began three days after Boeing’s last offer was rejected in early September. 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.

Separately, Boeing’s contract talks with its union engineers will move into high gear later this week. The company hopes to avoid a second strike, this one by its white-collar union, which represents 21,000 scientists, engineers, manual writers, technicians and other hourly workers.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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