Boeing, union reach deal to end 53-day strike

updated 2:53 p.m. ET Oct. 28, 2008

SEATTLE - 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.

Details of the deal A tentative labor agreement reached late Monday by Boeing Co. and its striking Machinists’ union includes the following points, according to a union statement: — Wage increases totaling 15 percent over the four-year life of the contract, including annual increases of 5 percent, 3 percent, 3 percent and 4 percent, compared with a total of 11 percent over three years in Boeing’s last pre-strike offer. It also includes hourly rate increases for low-seniority workers whose pay scale hasn’t changed in at least three years. — Bonuses of $5,000 or 10 percent of the previous year’s earnings, whichever is greater, in the first year; $1,500 in the second year; $1,500 in the third year and none in the fourth. That compares with two bonuses totaling an average of $6,400 this year in the previous contract offer. — A pension boost to $81 per year of service next year and $83 per year in 2012, compared with $80 per year of service in the last offer. — Preservation of existing medical cost structure and benefits through 2012. Boeing had sought changes that would have shifted more of the cost to workers. — Stronger provisions for the union to bid against subcontractors for work; a revised agreement to protect about 2,200 facilities and maintenance jobs; expanded job protection for an additional 2,920 forklift drivers, environmental control personnel, inventory clerks and other workers, and limits on vendor deliveries to the shop floor. Source: Associated Press

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.

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