Boeing, Machinists Union Reach Tentative Deal
MICHELE NORRIS, host:
A vote is scheduled for Saturday for the 27,000 members of the machinists union at Boeing. Yesterday the aerospace company and the union reached a tentative agreement that would end a long strike. As NPR's Wendy Kaufman reports from Seattle, the union is expected to approve the deal.
WENDY KAUFMAN: The strike has lasted more than seven weeks, and it's been costly for both workers and the company. Without its machinists, Boeing factories have been shut down. Union members have an average base wage of about $55,000 a year. And while Boeing called its final offer before the strike an outstanding one, union members wanted higher pay, higher pensions, and job security. Did they get it?
The union claims victory, pointing to economic gains including a 15 percent wage increase over four years, an $8,000 bonus, and no health care cost increases. On the extremely contentious issues of job security and outsourcing, both the union and management say they got what they needed. The union preserved more than 2,000 jobs delivering parts to the factory floor and got additional retraining language, but Boeing retained flexibility in where most work is done and by whom. Here's company spokesman Tim Healy.
Mr. TIM HEALY (Spokesman, Boeing Company): This is an agreement that gives the IAM the job security provisions that it wanted, but allows us the flexibility we need to run the business. It rewards employees for their contribution to our success, but it allows us to remain competitive and sustain that success. And importantly, it's a four-year deal. And that's something we wanted. And we think that customers will be happy to hear that.
KAUFMAN: A four-year contract rather than the usual three gives Boeing more stability and certainty. Assessing who won in any strike is difficult. But analyst Scott Hamilton of the Leeham Group in Seattle says on balance the union did quite well, though Hamilton says the union didn't get everything it wanted on the thorny issue of outsourcing.
Mr. SCOTT HAMILTON (Aerospace Analyst, Leeham Co.): I'm not sure that from a practical standpoint that giving job protection for 2,000 jobs is all that meaningful. It's very symbolic. But on the larger macro issue of outsourcing, Boeing didn't concede anything.
KAUFMAN: Assuming the tentative agreement is approved on Saturday, Boeing's labor relations team will turn its attention to its engineers and technical workers. That contract is also up for renewal, and bargaining will begin tomorrow. The negotiations are likely to be contentious. And Boeing has yet another perhaps even bigger worry. Given the financial meltdown and weakness in the global economy, what will happen to its orders? Will they be postponed or cancelled? No one knows the answer to that question. Wendy Kaufman, NPR News, Seattle.