Members of the largest union at Boeing's commercial aircraft division in Wichita, Kan., yesterday rejected a labor agreement that the plant's...
KANSAS CITY, Mo. — Members of the largest union at Boeing’s commercial aircraft division in Wichita, Kan., yesterday rejected a labor agreement that the plant’s proposed buyer, Onex, had called vital to the acquisition.
Members of the International Association of Machinists and Aerospace Workers rejected the proposal by 57 percent, said Lodge 70 President Steve Rooney. The union represents 5,300 workers, about 70 percent of whom are members.
In a statement, Onex managing director Nigel Wright said he was “obviously disappointed” by the vote. “We are reviewing our options and want to give them careful consideration before making a determination about our next steps,” Wright said.
The Toronto-based investment firm had said previously it would walk away from the deal if the union were to reject the agreement.
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If that happens, Boeing has said it would have to downsize the plant, either by selling the business in pieces or outsourcing the jobs there. The plant employs about 7,200 people.
Onex agreed earlier this year to buy Boeing’s huge commercial aircraft plant in Wichita, plus other sites in Tulsa and McAlester, Okla., 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.
Union members had been critical of the proposal, which called for an initial 10 percent wage cut and an increase in health-insurance costs. The plan also provides for general pay increases during three years of the contract, includes performance bonuses tied to certain financial targets and provides each employee 1,000 shares of company stock, to be paid out in certain circumstances. The agreement also would have allowed the union to renegotiate pay and benefits after three years, but precludes strikes.