Boeing reaches deal to end strike

October 28, 2008
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, NEW YORK, October 28 – Boeing and leaders of a machinists\’ union reached an agreement Monday on a new contract to end a strike that has paralyzed operations since early September, the company and union said.

The 52-day strike is estimated by some analysts to be costing the US aerospace giant more than 100 million dollars per day and risks further delaying development of Boeing\’s new passenger jet, the 787 Dreamliner.

"Boeing and the International Association of Machinists and Aerospace Workers (IAM) today reached tentative agreement on a new four-year contract covering 27,000 employees," Boeing said in a statement.

The new contract will now be submitted to members of IAM for approval. The leaders of the union are urging them to support the deal.

"The tentative agreement has the unanimous endorsement of the IAM negotiating committee and will be presented to members for a ratification vote, which will take place in 3-5 days," said the union.

Boeing\’s 27,000 machinists, who represent 16 percent of the company\’s workforce, began picketing on September 6 after the failure of last-ditch contract talks. The two sides have since been in mediated talks to break the deadlock.

"After 52 days of striking, we have gained important and substantial improvements over the company\’s last, best and final offer that was rejected on September 3," said union leader Tom Wroblewski in a statement.

Once the strike ends, attention will turn to the consequences of the action on the already delayed development of the 787 Dreamliner, for which nearly 900 orders have been placed by the world\’s airlines.

The first deliveries of the 787, initially planned for the first half of 2008, have been pushed back to the third quarter of 2009 due to production difficulties.

Boeing has declined to comment on any further slippage in the schedule, saying consistently that it would take stock and make an announcement when the strike was brought to an end.

Last Wednesday, the company said the program had "made progress during the (third) quarter despite the labor strike" and had met "key milestones."

Hurt by the strike, delays to the 787 and a difficult economic environment, the aerospace firm last week announced a 38-percent fall in third-quarter net profits.

The strike has affected Boeing\’s civil aviation operations, which are centred in northwestern Washington state. The company is also a defense contractor.

In its last offer to IAM before the strike, Boeing offered employees 34,000 dollars on average in additional annual wages and incentive payments over a three-year period, including an overall 11 percent wage increase.

IAM had demanded Boeing address issues such as job security, medical coverage, wages and pension benefits.

Details of the deal were not made public Monday, but IAM said the new contract "will provide job security for its members and limit the amount of work outside vendors can perform in the workplace."

The labor negotiations also resolved disagreements over wage rates, health care benefits for workers, pension benefits and work rule changes designed to bolster productivity, the union said.

"The company retained the flexibility necessary to manage its business, while making changes to the contract language to address the union\’s issues on job security, pay and benefits," said Boeing.

"The offer provides general wage increases every year and increases pension benefits."

Boeing is also in talks with its engineers and technicians to try to secure agreement before contracts expire in December.

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