NEW YORK – Almost 27,000 Boeing Co workers are set to vote on the plane maker's latest three-year contract offer Wednesday, urged by their union to reject it and walk off their jobs at midnight, raising the possibility of the fourth Boeing strike in 20 years.
If members of the International Association of Machinists and Aerospace Workers (IAM) – mostly based in Boeing's commercial plane plants in the Seattle area – do shut down operations, it would cost the company $3 billion in revenue per month as customers' planes sit on the production lines.
It would also put a dent in the U.S. economy, swelling jobless claims and increasing inventories at major Boeing suppliers like Spirit Aerosystems Holdings Inc, Rockwell Collins Inc and Goodrich Corp. If airlines are put off buying new planes, it would also cut durable goods orders.
Voting at union halls in the Seattle area opened at 5 a.m. local time, and will continue until 6 p.m. A result is expected from 8 p.m., after local votes and those from Boeing's smaller plants in Wichita, Kansas and Portland, Oregon are tallied.
BEST AND FINAL
Boeing's best and final three-year contract offer includes a 5 percent wage increase for the first year, plus 3 percent hikes for each of the the remaining two years. The company said those increases, along with new incentive plans, will add about $34,000 over the life of the contract to the average machinist, who makes about $55,000 a year before overtime or about $65,000 after overtime.
The company, which has offered to bus workers to union halls to vote, is also proposing a one-time 6 percent lump sum payment and an additional $2,500 bonus if the contract is approved on Wednesday.
The IAM has slammed the contract terms, saying it reduces benefits, shifts more health care costs onto workers, and doesn't address job security or outsourcing issues. Union leaders are encouraging members to reject the terms of the contract and vote in favor of a strike, which would start just after midnight.
“The higher the percentage yes vote (to a strike), the stronger the message,” the IAM said in a recent posting on its website. “The Boeing Company needs to see you are serious.”
STRIKE PREPARATIONS
The IAM has been preparing for the possibility of a strike for several weeks, taking their “burn barrels” out of storage and working out four-hour picket-line shifts for its members. The union is offering to pay strikers a nominal $150 per week if a strike goes into a third week.
The union struck for 48 days in 1989, 69 days in 1995 and 28 days in 2005. In 2002, a contract was adopted by default, as it was rejected by workers but fewer than two-thirds approved a strike.
Boeing risks alienating its workers and customers in the event of a strike, but is well-positioned to survive one. The Pentagon's No. 2 supplier and the world's biggest-selling plane maker – topping EADS unit Airbus last year – made a record profit of $4.1 billion in 2007 and has a record $346 billion worth of work in its order book.
However, a strike would inevitably push back progress on the new 787 Dreamliner – key to Boeing's financial future – which is already about 15 months behind schedule.
According to reports from industry bloggers, who have consistently been correct in predicting delays on the new plane, Boeing is already struggling to make its first test flight in the fourth quarter of this year, the latest target. A strike would also hurt progress on the company's new 747-8 jumbo and its new 777 Freighter.
(Editing by Brian Moss)
