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Wednesday, September 3, 2008

BOEING MACHINIST's STRIKE VOTE Complete, The Results Are Forthcoming



Boeing Co. aircraft assembly workers voted overwhelmingly to strike for the second time in three years but union leaders agreed to hold off on the walkout for 48 hours at the request of Washington Gov. Chris Gregoire and a federal mediator. The vote late Wednesday was 87 percent in favor of a strike that was to have begun at 12:01 a.m. PDT Thursday, after the expiration of the old contract covering more than 27,000 workers.

With a couple dozen or more horn-honking, engine-revving motorcycles leading the way, followed by a pickup truck with a giant American flag, hundreds of Machinists who help build The Boeing Co.'s 737 jetliner and perform other jobs for the company marched from the jetliner plant to their union hall here Wednesday morning.

Their mission -- to vote on whether to accept or reject a new three-year contract offer from the company.

The union leadership strongly urged the machinists to reject Boeing's offer and strike.

Many of the Machinists wore blue T-shirts with the words "It's our time this time," the union's slogan during the talks on a new contract.

They made noise. They carried signs. They raised arms and fists as they marched about a mile to vote before returning to work.

Depending on the vote by the marchers and some 25,000 of their fellow Machinists in the Puget Sound area, as well as a couple thousand more in Kansas and Oregon, they could be on strike starting at midnight. A strike would essentially shut down Boeing's jetliner production and likely cause further delays on the 787 program.

The voting will end at 6 p.m. in the Puget Sound area, and the results should be known by about 8:30 p.m.

"When we go out on strike, the price goes up," Tom Wroblewski, president of District Lodge 751 of the International Association of Machinists and Aerospace Workers, said as he stood on a sidewalk down the street from the plant gate and slapped hands with many of the Machinists as they marched toward the union hall and the all-important vote.

"They miscalculated," Wroblewski said of Boeing.

As the Machinists marched, they chanted, "Union power! Union power!"

Union rules require that a majority of those voting not only reject Boeing's final offer, but that at least two-thirds also vote to strike. Boeing is hoping to prevent a strike by winning over at least a third of those voting with what the company had called the best labor contract offered to any American workers this year.

But it was impossible to find anyone in the crowd of marchers who said they would vote to accept the contract and vote down a strike.

"It's a done deal," said Earl Muriekes, 52, who has worked as a Machinist for Boeing since 1989. He drove the pickup with the large American flag near the front of the marchers. A union shop steward, Muriekes helps build 737 wings at the Renton plant.

He said one of the Boeing managers in the plant tried to bet with him Tuesday night that at least a third of the Machinists would vote not to strike. If that happens, the contract would go into effect by default even if a majority of the Machinists vote it down. That happened in 2002, when Boeing's offer was soundly rejected, but 34 percent of the Machinists voted not to strike.

Muriekes did not make the bet and told the manager, "You will lose."

"It's not going to fly," he said as he waited at the union hall to vote on the contract.

He's been through several strikes at Boeing. The union struck in 1989, his first year at Boeing, for 48 days.

Boeing and the Machinists union have a long history of bad blood and occasional strikes. The union has struck Boeing six times since 1948. In 1995, a 69-day strike lasted well into December. The last strike, in 2005, lasted a month before an agreement was reached on the current contract. Boeing returned to the negotiating table and made several concessions to end the dispute. It raised the monthly pension payment nearly 17 percent and backed away from several issues that the union had called unacceptable, including one that would have raised the monthly premiums union members pay for their medical coverage.

In 2005, the strike was settled after Boeing improved its final offer.

The stakes are high for both sides this time.

Industry analysts estimate that Boeing could lose as much as $120 million each day the strike lasts as a result of revenue that will be deferred until customers receive planes delayed by the strike. Customers pay most of the money for a new jet upon delivery. The 2005 strike cost Boeing about $1.5 billion in revenue when it had to push back the delivery of 30 jets. Production rates are much higher now because of a record backlog.

"It would surprise me if we came back before the first of November," said one longtime Boeing Machinist who did not want to be quoted by name. "The company is dug in and so are we."

More than 27,000 Boeing aircraft assembly workers held a pivotal strike vote that could paralyze the world's second-largest aircraft manufacturer while its business is booming and further delay delivery of its new fuel-efficient 787 commercial jet.

Electricians, riveters, painters and others covered by the International Association of Machinists and Aerospace Workers began casting ballots yesterday morning; the outcome was expected to be announced late last night on the West Coast. The workers are based at plants in the Seattle area, in Gresham, Ore., and in Wichita, Kan.

The battle at Boeing is shaping up as a crucial test for organized labor. Union leveraged has diminished in recent years as competition for labor has expanded overseas, contributing to slower wage growth for most workers.

Labor claimed a rare victory recently when workers in the newly profitable steel industry agreed on a contract that union negotiators hailed as their best in a generation. But unions in general now face particularly delicate challenges. Given the weakness of the current economy, a strike could expose workers to great risk.

Boeing has offered its workers, who earn top pay of about $56,000 a year, a three-year deal that includes as much as $5,000 in bonuses and an 11 percent wage increase, plus cost-of-living increases of 3 percent. The company also has backed off a controversial proposal to replace its pension plan with a 401(k) for new workers. Still, the deal would require many workers to pay more for health care coverage and include rules that union officials say would undermine job security. The union wants higher wage increases and job security guarantees, and it wants Boeing to hold the line on health care costs.

"People feel that in a time of record profits, the company should not come with any takeaways," said Connie Kelliher, a union spokeswoman. "When times were bad, workers went for years without a salary increase. But now things are good."

Boeing officials have said that to offer more than it has already would hamstring the company with unsustainable labor costs. "Our best and final offer rewards employees for the company's success and allows us to remain competitive," Boeing said in a statement.

Analysts say that while the company is determined to control its labor costs, a strike could be extremely damaging at a time when Boeing has $275 billion in airplane orders to fill and has posted robust profits, which topped $900 million in the second quarter of this year. Boeing is also competing for a $40 billion contract to build aerial refueling tankers for the Air Force. The contract could be worth as much as $100 billion as the Air Force replaces its fleet of tankers.

"Without a question, the company has drawn a line in the sand," said Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues. "But it is a risky gamble given the stakes. High labor and benefit costs can be a burden, but if there is a strike, the company could be doing more damage to itself if it disrupts production and progress on the 787 Dreamliner."

The 787 Dreamliner is about 18 months behind schedule, and a strike would only further slow progress, even as inaugural test flights are scheduled for this fall. Despite the delays, the company has orders for nearly 900 of the midsize planes, which Boeing says will save about 20 percent on fuel costs.

"Any further delay will have both a tangible and intangible effect," said Howard Rubel, an aerospace analyst at Jefferies & Co. "The tangible will be that the planes are even later. The intangible is, 'When do we regain the trust of this company?' " Rubel estimates that a strike would cost Boeing $120 million each workday in deferred revenue.

A strike would also have a potentially huge impact on the struggling U.S. economy. Aircraft sales have helped drive the nation's export boom, which has become a boon for business growth as other sectors have cooled. Boeing is the nation's No. 2 exporting firm, company officials said.

If Boeing workers vote to strike, it would be the company's second walkout in three years. In 2005, workers launched a 24-day strike that was settled after Boeing boosted pension payments and backed off demands that workers pay more for insurance.

Under union rules, two-thirds of the Boeing assembly employees would have to approve a strike. Any count short of that would put the contract into effect.

"The neighbors of many Boeing workers are in very shaky shape, given the economy," Shaiken said. "Boeing is gambling that at least one-third of the workers will see that and vote for the contract. But this is a risky gamble, given the stakes."

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