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Boeing workers to strike after talks fail

Latest update : 2008-09-08

Nearly 27,000 members of Boeing's largest union are to go on strike Saturday after last-ditch contract talks failed. The strike could threaten the aviation giant's 787 Dreamliner production.

Boeing Co's 27,000-strong machinists' union declared it will strike at midnight Pacific time on Friday, as the plane maker failed to improve its contract offer after two days of emergency talks.

"Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues," Tom Wroblewski, the IAM's Seattle-area president, said in a letter to members. "The strike is on."

The vast majority of the International Association of Machinists and Aerospace Workers' (IAM) members voted to reject Boeing's "best and final" offer on Wednesday, but postponed a strike for 48 hours to give negotiators more time.

Boeing and IAM teams, along with federal mediators, were meeting at Walt Disney Co's Coronado Springs resort near Orlando, Florida, where the IAM is set to have its convention, held every four years, starting on Sunday.

"Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing ... options that could lead to an agreement. Unfortunately the differences were too great to close," said Scott Carson, the head of Boeing's commercial plane unit, in a statement.

No further talks are scheduled. Both sides said they were waiting for the other to make the first move. Boeing spokesman Tim Healy said the company was "open" to hearing from the IAM.

"If this company wants to talk, they have my number, they can reach me on the picket line," the IAM's Wroblewski in a message to union members.

BURN BARRELS OUT

Boeing's machinists were already preparing to strike before talks over the latest three-year contract were called off.

Union volunteers rolled out 52-gallon oil drums -- known as "burn barrels" -- and readied coffee and soup to keep expected picketers warm at the company's Everett, Washington plant, despite the balmy 65 degree weather.

"We're not at it for the money, we're at it for the medical, which they (Boeing) are freaking crushing," said Joseph Young, a 48-year-old insulation installer who has worked at Boeing for 21 years.

Boeing has proposed shifting more health-care costs onto workers, one of the major sticking points in negotiations.

The strike begins for most of the union members at midnight Seattle time, which is when the current three-year contract expires. The bulk of Boeing's machinists work at plants around the Puget Sound area.

Boeing said it would keep its plants open, with workers in other unions and and non-union employees expected to come to work, but it said production lines at its massive facilities in Everett and Renton, Washington, would stop.

The company plans to deliver planes that had already come off production lines, but will not do any more work on assembling aircraft. Airlines tend to be wary of planes not produced by regular skilled workers.

That means there will be no further production of its 737, 747, 767 and 777 planes, and that its already delayed 787 Dreamliner will fall even further behind schedule.

Boeing spokesman Healy said a "protracted" strike could mean Boeing would miss its target of making the first 787 test flight in the fourth quarter. The plane was originally supposed to fly last summer, but has been derailed by a series of production problems.

Boeing, which made a $4.1 billion profit last year and has a record $275 billion worth of commercial plane orders in its books, could financially survive a short work stoppage. The strike will cost Boeing about $100 million in revenue per day and knock about 1 cent per day off earnings per share, according to Wall Street analysts.

The walk-out by the IAM is the fourth at Boeing in 20 years. The union struck for 48 days in 1989, 69 days in 1995 and 28 days in 2005. In 2002, a contract was adopted by default, as it was rejected by workers but fewer than two-thirds approved a strike.

BEST AND FINAL

Boeing's "best and final" contract offer this time around was delivered to union members a week ago, proposing an 11 percent wage increase over the three-year life of the contract, a one-time lump sum and ratification bonus, and other incentives that the company said would add about $34,000 to the pay of the average machinist, who now makes about $65,000 a year including overtime.

That failed to meet union demands for a 13 percent wage increase, no change to health-care contributions and the roll-back of provisions allowing Boeing to outsource work.

"I'd use this contract for toilet paper, but there's too many holes in it," said Randy Carroll, a 52-year-old mechanic at Boeing's plant in Auburn, Washington, who traveled to Everett in support of the strike.

Boeing shares fell 14 cents to close at $62.89 on the New York Stock Exchange.

Date created : 2008-09-06

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