Print

Email story

Comment

Email editor

Boeing accord seen as a win-win

SEATTLE - A likely end to the strike at Boeing Co.'s commercial airplanes division could be one of those rare labor-management deals where both sides feel like winners.

"Not to say, "Hurray, we all win,' but both sides can claim victory," said analyst Richard Aboulafia with the Teal Group.

About 18,400 machinists are scheduled to vote Thursday on a three-year contract offer that, if approved, would allow Boeing to swiftly reopen its commercial airplane assembly facilities in the Puget Sound area, Gresham, Ore., and Wichita, Kan.

The new proposal gives workers a nearly 17 percent boost in pension payouts and guarantees retiree medical benefits for new hires. It also assures that health care premiums remain the same as the current contract, among other changes.

But it also calls for no general wage increase, instead opting for lump-sum bonuses totaling about $11,000 over three years. And it takes away a previously offered provision that would have given workers pay incentives based on corporate financial performance.

Leaders of Machinists District Lodge 751 in Seattle say the deal is "a victory for working families across the country" that addresses the issues most important to its members, who average 49 years old and currently make about $59,000 a year.

The company says the total cost is similar to its previous offer, and analysts say the resolution allows the company to quickly regain the momentum it needs to continue its heated battle with rival Airbus SAS.

"Call it a draw," said analyst J.B. Groh with D.A. Davidson.

Investors appeared to welcome the tentative agreement, sending Boeing shares up $1.47, or 2.3 percent, to close at $64.67 Monday on the New York Stock Exchange. In the past 52 weeks, shares have traded between $48.10 and $68.38.

The new proposal comes just more than three weeks after the machinists walked off the job after union leadership deemed the company's previous offer "insulting." Both sides had insisted since then that they were miles apart and unsure when a happy medium could be reached.

But Aboulafia said the surprise announcement late Sunday that a proposal had been brokered could mean that the two weren't nearly as far apart as public posturing would suggest. The revised offer also shows how important it appears to have been for both sides to get back to making airplanes.

The fact that the union was able to get the contract it did - including no health care premium increases - shows just how powerful the skilled machinists are, even as other unions are losing clout.

Boeing is beginning to gain momentum in its commercial airplane business, which fell off drastically after the Sept. 11, 2001, terrorist attacks. But customers including All Nippon Airways Co. and Ryanair Holdings PLC had said the strike was delaying deliveries and affecting their route plans. Groh said it was unlikely that customers would cancel orders over the strike, but such delays could erode goodwill.

[Last modified September 27, 2005, 02:45:31]