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Mon, May 16, 2005

Onex Makes Final Offer To Boeing Workers

Options Abound

Onex has made its "last, best, and final offer" to the union workers at Boeing's Wichita plant. The offer cuts wages 10 percent to start, but provides for raises and potential stock options in the new company. Members will vote on the contract May 24th.

"When Onex makes money, our people make money," said Machinist union aerospace coordinator Dick Schneider, to the Wichita Eagle. Onex's offer includes a Machinists union defined pension plan and a performance bonus, but increases health care costs to the employees.

Machinists District 70 president Steve Rooney told the Eagle that Onex said during negotiations it will make job offers to 90 percent or more of the 5,300 workers in the commercial aircraft division represented by the Machinists union.

Rooney said Onex's offer improved in the past few days of talks.

"There's a lot at stake here," Schneider said to the Eagle. "If this thing doesn't go through, Onex is going back to Canada, and Boeing intends to chop it up." He also said that the two companies "made their intentions clear to us."

In an equity participation plan, shares will be allocated to members when the company takes over, union officials said. The shares would be valued based on work the new company has

With current work at the site and future 787 work, each employee's shares could be worth around $30,000 according to Steve Sleigh, Machinists union director of strategic resources.

New work for the site could push the value significantly higher, but Sleigh cautioned, "This is not a guarantee." The value will be based on the underlying performance of the company.

And employees will not be able to cash in their stock unless Onex sells, merges or takes the company public. Union leaders say that is likely within three to five years.

The contract offer also includes the chance for the union to renegotiate wages and benefits in the third year. There will be wage increases of 2 percent in the second year, 3 percent in the third year and 3 percent in the fourth year of the contract along with a performance bonus that pays out in 2007 if the company hits financial targets set in 2006. The offer also allows employees of the new company to collect $60 a month for each year of service when they retire.

FMI: www.onex.com, www.ll834.org

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