At a top-level meeting Wednesday, Boeing and the Machinists union agreed to resume contract negotiations in an effort to end a strike that's already cost Boeing more than $1 billion in profits.
At a top-level meeting Wednesday, Boeing and the Machinists union agreed to resume contract negotiations in an effort to end a strike that’s already cost Boeing more than $1 billion in profits and left 27,000 workers without paychecks in a rapidly deteriorating economy.
Meanwhile the strike that has idled Boeing’s jet factories for 34 days will continue, and neither side was ready to predict that new talks would quickly end a dispute that has halted aircraft-production work in three states. The talks themselves may not restart until the weekend or later.
The agreement to go back to the table was reached Wednesday afternoon in Everett when International Association of Machinists (IAM) leaders Mark Blondin and Tom Wroblewski met with Boeing Commercial Airplanes Chief Executive Scott Carson, labor Vice President Doug Kight and chief company negotiator Tom Easley.
In an interview, Blondin said he didn’t want to raise expectations too high.
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“We want to keep it in perspective,” he said. “Our members will be happy that we are back to the table. But if we bring something back [for a vote], it’s got to be something that meets their expectations.”
An official IAM statement Wednesday evening said that Machinist “solidarity brought Boeing back to the bargaining table,” yet echoed Blondin’s cautious tone.
“We hope this meeting marks a major step forward,” the statement said. “The union will continue to do everything possible to bargain a contract that addresses the concerns our members have identified.”
Boeing spokesman Tim Healy was also circumspect.
“We’ve agreed to pursue additional talks,” Healy said. “We want to see if there is a path forward to a resolution that rewards employees but allows us to remain competitive.
“It’s a good thing that we are talking,” he added.
The return to the bargaining table comes as the strike’s economic toll is rising. Boeing’s lost profit, based on an extrapolation from an internal company estimate of the 2005 strike’s cost, is estimated at more than $1.3 billion so far.
The ripple effects of the production stoppage have hit suppliers all across the country. Triumph Composite Systems in Spokane announced more than 200 layoffs; Hexcel Engineered Products in Kent laid off 100 more; and production workers at Spirit AeroSystems in Wichita, Kan., were reduced to a three-day workweek.
The renewed bargaining also follows tough talk earlier this week from Boeing executives.
On Monday, Chief Executive Jim McNerney sent an e-mail to employees expressing his resolve to stand firm. On Tuesday, Fred Kiga, vice president for government relations, warned that if Washington becomes known as a “strike zone,” future assembly of airplanes here could be at risk.
Some informal and preliminary contacts recently took place in secret, though both sides had said they weren’t in touch.
At a union meeting in Seattle Wednesday night, IAM district 751 president Wroblewski broke the news of the agreement to his members and said that in the course of the strike he and Blondin had “several conversations with Boeing.”
People familiar with the details said two unannounced meetings last week between the union leaders and Kight set the stage for Wednesday’s breakthrough.
Blondin said that in the Everett meeting Wednesday, Carson focused on understanding the IAM’s demands on job security, which has emerged as the major issue blocking a return to work.
After McNerney’s message on Monday, Blondin responded in an interview by limiting the scope of the union’s demands on job security to stopping the outsourcing of local jobs to nonunion companies.
On Wednesday, he said he had couched his comments that way in a deliberate attempt to focus the discussion.
“With the McNerney e-mail, it seemed to me and Tom Wroblewski that maybe they don’t get it,” Blondin said. “What we are asking for isn’t going to restrict their ability to compete globally.”
He said the union recognizes that some work must be outsourced overseas as part of aircraft-sales agreements and that Boeing will continue to pursue its global strategy.
But he said the union will draw a line at delivery of airplane parts by suppliers and nonunion vendors inside the local assembly plants, as well as the outsourcing of facilities maintenance work. Beyond that, it wants only the chance to bid on any work considered for future outsourcing.
“We’re not overreaching on this job security,” Blondin insisted.
That approach is at least part of what has provided the basis for further talks.
“It’s got to be solved around job security,” Blondin said. “And all the issues will play in.”
In addition to the outsourcing issue, the union strongly objects to extra employee costs added to the medical-benefit plans, and it seeks increases in the wage and pension offer.
Boeing’s final offer to the Machinists included an 11 percent wage increase over three years; a monthly pension of $80 per year of service, up from $70 in the current contract; and a 2008 lump-sum bonus worth on average $3,900.
The average Machinist earns about $54,000 a year in base pay or about $65,000 with overtime.
However, newer hires earn much less. Company wage data filed with the state Department of Revenue show that, as of the end of last year, nearly 5,000 Machinists at Boeing earned less than $20 an hour.
Blondin said federal mediators will set up the new negotiations, probably “within the next two days.” He said some people who are out of town must be recalled to join the negotiations.
A company source familiar with the discussions said that it may take longer, perhaps beyond the weekend, before the talks resume.
The Federal Mediation and Conciliation Service (FMCS), a government agency charged with helping to resolve labor disputes, has been in touch with both sides since before the strike, and will facilitate the talks.
“We’ll let the mediators be there. They may work between the parties or maybe face to face,” Blondin said. “The mediation is good for assistance but the bottom line is the two parties have to come to agreement.”
Dominic Gates: 206-464-2963 or firstname.lastname@example.org