Boeing's Striking Machinists Dig In
RENEE MONTAGNE, host:
Airplane maker Boeing has its own problems. A strike by more than 18,000 union machinists has shut down its production of commercial airplanes. The strike is in its 14th day. From Seattle, NPR's Wendy Kaufman reports.
WENDY KAUFMAN reporting:
The machinists now on strike are one of the strongest unions in American industry, and the fact that they're pitted against a company that's doing well financially makes this a strike worth watching. The dispute is not about wages; it's primarily about pension payments and health care costs.
(Soundbite of car horns)
KAUFMAN: Outside the Renton, Washington, plant, where 737 jets are made, Christy Aldridge(ph), a 20-year veteran at Boeing, proudly carries her picket sign.
Ms. CHRISTY ALDRIDGE (Boeing Machinist): It's the workers that have made Boeing competitive. Only offering, you know, $6 for retirement certainly is a slap in the face.
KAUFMAN: The pension isn't $6, but that's the proposed increase for calculating monthly benefits. Under the old contract, union members received pensions of $60 per month for each year of service. So, for example, if you worked for 20 years, your pension would be $1,200 a month. The union wants to see that number increased by a third. Boeing contends a long-term pension liability of that magnitude is unrealistic and unacceptable.
The second big issue is health care. Boeing's contract offer calls for large increases in monthly premiums and in the cost of prescription drugs. Still, the benefits would be far better than what many American workers get. Chaz Bickers, a spokesman for Boeing, says overall the company offered the machinists a very attractive contract.
Mr. CHANCE BICKERS (Boeing Spokesman): It was well above market. We felt it was fair and balanced, and it allows the company to win new business. That's how we create and sustain jobs in the long term. We really couldn't get in the position where we could agree to a contract offer that would seriously erode our ability to compete in the future.
KAUFMAN: Translation: `Airbus, Boeing's principal rival for commercial jets, doesn't have to pay sizeable amounts in health care or pension benefits. We can't, either.'
But Boeing did just offer its new CEO a pension worth about $50 million, and while that's a one-time expense, it grates on the rank and file.
The two sides seem to have dug in for the long haul. Industry analyst Richard Aboulafia of the Teal Group says Boeing sees large defined benefits as the kiss of death.
Mr. RICHARD ABOULAFIA (Teal Group): Because even if the market turns down, you have to keep making payments, and I think Boeing is very wary about taking on additional obligations, given that reality. This could be a situation that, given the union's power in the market, they have chosen to ask for the one thing that Boeing will absolutely not grant them, and that is the making of a very long strike.
(Soundbite of car horns)
KAUFMAN: Indeed, back on the picket line, strikers are already stacking wood for their burn barrels. A decade ago, the machinists' strike lasted 69 days and union member Scott Schaefer says he and his fellow machinists are willing to stay out even longer this time.
Mr. SCOTT SCHAEFER (Boeing Machinist): If it take three, four, five, six months, that's what it takes. I hope it doesn't take that long, because again, I don't think it'll be good for the company. We'll be losers, too. We're losing money, and if that's what it takes to get a good contract, then we're willing to do it.
KAUFMAN: The strike is costing Boeing tens of millions of dollars a day in lost productivity, and if the strike continues for months. Boeing might have to pay large penalties to airline customers for delayed deliveries. Even more troubling for Boeing is the prospect that some of its customers would defect to Airbus. Wendy Kaufman, NPR News, Seattle.
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