The proposed buyer of Boeing's commercial-aircraft division in Wichita, Kan., said yesterday it is not backing out of the deal after losing...
KANSAS CITY, Mo. — The proposed buyer of Boeing’s commercial-aircraft division in Wichita, Kan., said yesterday it is not backing out of the deal after losing a key contract vote with the plant’s largest union.
Toronto-based Onex will ask employees individually to accept job offers after 57 percent of workers represented by the International Association of Machinists voted against a contract Tuesday, Managing Director Nigel Wright said yesterday.
Wright said Onex will send job-offer letters to the union members, offering the same salary and benefits as in the contract. However, he said the members would not be offered an equity stake in the business, as proposed in the original contract, and won’t be eligible for a Machinist union-backed pension plan.
The contract terms called for a 10 percent pay cut and higher health-insurance costs.
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“What we’re going to do is offer appointment letters to people and then hope that they accept them,” he said, adding that the company will not send letters to the almost 800 workers who were not being rehired under the original contract.
Machinist union officials didn’t immediately return phone calls for comment.
Wright said he expects Onex will complete its acquisition of Boeing’s operations in Wichita and Tulsa and McAlester, Okla., by mid-June.
“Onex is firmly committed to this business,” Wright said. “The new company represents the only real option for new investment, new work, new jobs for those who choose to come with us, and greater job security for these communities and the families in them.”
Wright said Onex will continue negotiating with the other unions that represent workers at the plants and would extend job offers to those employees during the next three weeks.
Onex agreed earlier this year to buy the three plants for $900 million in cash and the assumption of $300 million in debt. The sale is part of Boeing’s strategy to focus its commercial-aircraft business on design and final assembly.
Gary Chaison, professor of labor relations at Clark University in Massachusetts, told The Wichita Eagle that Onex was more likely to stick with the sale because the contract was not overwhelmingly turned down.
Chaison said that because of the close vote, he thinks Onex will be able to sweeten the deal a bit to show union members it’s listening to them.
Boeing spokesman Chuck Cadena said the company was “very pleased” with Onex’s decision and would continue the process of closing the sale.
Information from Bloomberg News is included in this report.