Boeing's Earnings A Tool In Machinists Strike

Talks aimed at settling the Machinists Union strike at Boeing resume Thursday at the request of a federal mediator. Both the union and management have strong incentives to settle. Boeing reported a big earnings decline Wednesday.

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And machinists at Boeing are still on strike. It's been seven weeks since they walked off the job. But today their union will resume contract talks with the company, and with the help of a federal mediator. NPR's Wendy Kaufman has more.

WENDY KAUFMAN: The strike by 27,000 union machinists has shut down production at Boeing plants. Airline deliveries have been delayed, and the company's third quarter profits announced yesterday were off 38 percent. Most of that, Boeing says, was because of the strike. On a busy street corner just outside the sprawling Boeing plant in Everett, Washington, about two dozen picketers are holding forth. Their mood is mostly quiet, even if it's somber. After more than six weeks of no work and only $150 a week in strike pay, many on the picket line just want the strike to be over, but on their terms. Union machinist Dee Dominicus(ph).

Mr. DEE DOMINICUS (Union Machinist): We need to see them make a conscious effort to keep our jobs, so we know down the road if we do our job right, we're going to have a job.

KAUFMAN: They want a commitment that union work will stay in the hands of union members. There are economic issues too, such as pay and pensions. But it's job security that seems most important. For example, Dominicus says Boeing would like to use non-union workers to deliver parts to the factory floor, a move that could eliminate 2,000 jobs.

Mr. DOMINICUS: We have to make our stance now because, you know, if they chip away here, the next time they could take a bigger chip or a bigger chunk away, and we could all be out of jobs.

KAUFMAN: There's another reason the union wants to hold the line now. Over the past few years Boeing has posted huge profits and currently has a backlog of orders for commercial jets totaling $276 billion. From the union's perspective, the company has an obligation and the ability to reward its workers with job security. But Boeing insists the company needs flexibility in deciding who does what work. As company CEO James McNerney put it in a conference call yesterday, the linchpin of the dispute is management rights.

Mr. JAMES MCNERNEY (CEO, Boeing): We are focused on improving our competitiveness longer term. We will not sacrifice our ability to compete for a short-term agreement with our unions, but I'm hopeful we can find a way forward here sooner rather than later.

KAUFLMAN: Labor relations expert Thomas Kochan, who teaches at MIT Sloan School of Management, suggests this is a prototypical strike of the sort that we may see many more of in the future. While the union is looking at the company's past profits...

Professor THOMAS KOCHAN (Management, MIT): The company is looking forward and saying the market has changed dramatically. We have very, very dire times coming ahead. And so the company's looking forward, the workforce is looking backward, and the expectation gap is large enough to create these kinds of conflicts.

KAUFMAN: So how does the conflict between the machinists and Boeing get resolved? Industry analyst Richard Aboulafia suggests one scenario.

Mr. RICHARD ABOULAFIA (Aircraft Analyst, Teal Group): It's possible that the best solution is a face-saving compromise where Boeing agrees to give the union more power to bid on potentially outsourced work, but no one really knows whether that's an enforceable change.

KAUFMAN: But veteran Boeing machinist Rich Ronnie(ph) believes the federal mediator brokering the talks will be exerting substantial pressure.

Mr. RICH RONNIE (Boeing Machinist): It's hurting the economy locally, nationally. It's hurting everybody. It's not good for anybody at this point.

KAUFMAN: The talks are being held in Washington, D.C. Wendy Kaufman, NPR News.

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