Members Reject Contract Offer; Walkout Delayed 48 Hours

By an overwhelming majority, employees represented by the International Association of Machinists and Aerospace Workers have rejected the "best and final" contract offer from Boeing, and voted Wednesday to strike the American planemaker immediately. But union leaders told workers to stay on the job a little longer, in the hopes Boeing may find some new incentives to offer.

Reuters reports a large percentage of the 27,000 IAM-represented workers at Boeing's plants in Washington, Kansas and Pennsylvania voted to reject the contract offer, with 87 percent then casting their votes to strike at midnight Wednesday.

Those workers were then somewhat surprised, however, to learn IAM leaders had called for that walkout to be postponed for 48 hours, while they meet with Boeing representatives one last time in hopes to avert a walkout.

"We offered employees the best package of pay and benefits in the aerospace industry," said Doug Kight, Boeing's VP of Human Resources and lead negotiator, in a statement released early Thursday morning. He added the Federal Mediation & Conciliation Service asked both sides to meet at a neutral location immediately, "to explore whether an agreement can be reached."

IAM workers, who have been preparing to strike for several months, expressed doubts such an agreement could be reached.

"There's an awful lot of unhappy people. I don't see a lot happening in the factory in the next couple of days," said Hans Ulfstein, a structural research mechanic at Boeing's widebody manufacturing plant in Everett, WA. "They better have a good screaming offer. If they don't, it's going to be a pretty long and nasty strike."

As ANN reported, Boeing offered what it called its "best and final" contract offer last week. That deal included five percent pay increases for the first year of the three-year contract, with 3 percent raises in each of the remaining years. Along with new benefits and incentives, the new contract would result in about $34,000 in added wages for the average worker over the term of the contract, according to Boeing.

Boeing also made concessions on some earlier proposals, including stripping provisions the union said would penalize new-hires. Still, union leaders recommended IAM members vote to reject the contract within hours after Boeing submitted it August 28... saying Boeing didn't go far enough in guaranteeing job security, or shifting health care costs off workers.

Should machinists walk out Friday at midnight -- and that's the odds-on favorite scenario at this time -- it would mark the fourth IAM strike against Boeing in 20 years. Analysts say a strike would cost Boeing about $100 million per day in lost revenue, as unfinished planes sit idle on production lines, unable to be delivered to customers.

If the strike lasts more than a few weeks, Boeing's suppliers would also feel the sting, as parts awaiting shipment to Boeing begin to stack up on the loading docks.

Analyst Richard Aboulafia, with the Teal Group, said he was surprised at the membership turnout in favor of a strike. "It looks like the union is flexing its muscles," he said. "It virtually guarantees that Boeing is going to have to pay more, and feel some pain."

FMI: www.boeing.com/2008negotiations/, www.iam751.org/contract08.htm