9/8/08

IAM-Boeing strike costs misunderestimated

Related IAM-Boeing stories: hereVideo: "IAM bigs prep Boeing clash"

Hidden costs of laid-off workers at suppliers, customers are never counted

More than 27,000 Boeing workers have started strike action in a dispute that will cost the aerospace company $100 million in lost revenue for every day that it lasts. Emergency talks on a new wage settlement collapsed at the end of last week and the walkout became formal on Saturday.

Boeing's production lines for 737, 747 and 777 aircraft have been halted, despite a record backlog of work worth $275 billion.

The stoppage could also further delay Boeing's 787 Dreamliner, which may expose the company to yet more demands for compensation from angry airlines. The 787 is already running more than a year behind schedule and was scheduled to make its first flight this year.

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

Boeing and IAM negotiators, along with federal mediators, met in Florida in a last-ditch effort to end disagreements over wage increases, healthcare contributions and the company's outsourcing policy.

Tom Wroblewski, IAM's Seattle- area president, told union members: “Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues. The strike is on.”

Scott Carson, Boeing's head of commercial aircraft, said: “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.”

No further talks are scheduled. Both sides said that they were waiting for the other to make the first move.

Mr Wroblewski said: “If this company wants to talk, they have my number. They can reach me on the picket line.” The strike started officially for most of the union members at midnight on Saturday, when the previous three-year contract expired.

Boeing said that it would keep its plants open, with workers in other unions and non-union employees expected to report for work.

However, production lines at its massive facilities in Everett and Renton, both in Washington State, will stop. The company will deliver aircraft that have come off production lines, but will not do any more assembly work.

Ed Zvonik, who has worked at Boeing for 30 years, said that he did not know how long the strike could last. “It could be a couple of days, or three months. It depends on whether the company wants them to go back to work,” he said.

A Boeing spokesman admitted that a protracted strike could mean that the company would miss its target of making the first 787 test flight in the fourth quarter.

Singapore Airlines, which has 20 787s on order for delivery starting in 2011, said that it was in talks with Boeing over how the walkout might affect deliveries.

Boeing's offer proposed an 11 per cent wage increase over the three-year life of the contract, a one-time lump sum and other incentives.

The union is demanding a 13 per cent wage increase, no change to healthcare contributions and the rollback of provisions allowing Boeing to outsource work.

The dispute between workers and management is said to have stirred strong feelings in Washington State, where Boeing's commercial aircraft division is based. Dale Flinn, a Boeing door mechanic, said: “They took a swing with a baseball bat at a beehive and got stung. They didn't realise how strong we were.”

(business.timesonline.co.uk)

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