Business

<< Previous   of   Next >> (click to enlarge) Jim McNerney (click to enlarge) Ray Goforth (click to enlarge) Mark Blondin   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Wednesday, July 30, 2008 Machinists and engineers question Boeing's 787 business strategy Union officials also say they're dissatisfied with the progress of current contract talks. By Michelle Dunlop Herald Writer EVERETT -- After being called on to rescue the 787, the Boeing Co.'s unionized workers expect a handsome contract and assurances of job security in return. Boeing's failure to comply could put about 24,000 Machinists in the Puget Sound region on strike this September just as the company struggles to get its 787 Dreamliner jet in the air. And Boeing's 20,000 engineers could walk over similar issues in December, union leaders told investors Tuesday. "Boeing cannot afford a disruption by its skilled work force," David White, assistant director of strategic resources for the International Association of Machinists, said in the conference call. Boeing has a commercial jet backlog worth $275 billion in 3,600 unfilled orders. But the company has struggled to get its latest jet on track. Boeing forged partnerships in Asia and Europe for the 787, handing over both design and production responsibilities to major suppliers. Workers in Everett piece together major assemblies shipped in from all over the world. Supply-chain issues and production problems have delayed Boeing's 787 by at least 15 months -- a result that Boeing's unions say constitutes a "failure." The fuel-efficient 787 has won nearly 900 orders and has not yet seen a cancellation despite delays. But the unions argue that cancellations may come if the end product doesn't live up to what Boeing promised. The aerospace giant is adopting the "exact wrong" strategy by relying more on foreign suppliers and focusing less on retaining its skilled work force in this country, said Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace. The bulk of Boeing's Machinists and engineers union membership is rapidly approaching retirement age, despite a recent hiring frenzy that brought new, younger workers into Boeing's factories. The unions fear there won't be sufficiently experienced aerospace workers left to bail out the company should its next new jet program run into problems like those of the 787. However, Boeing Chief Executive Jim McNerney hasn't budged much on the company's global business model. "We've learned a lot and have the scars to prove it," McNerney said of the 787 in April. "I think it will be more of an adjustment in strategy rather than a change in strategy," he added. That position doesn't sit well with Boeing's Machinists, who saw work they used to performing shipped to Japan, Italy and South Carolina for the 787. The Machinists' contract with Boeing expires Sept. 3. The union went on strike for 28 days in 2005 after negotiations with Boeing failed. "We're a force to be reckoned with and to be respected," said Mark Blondin, aerospace coordinator for the Machinists. Boeing and the Machinists began preliminary contract negotiations months earlier than they have in previous years. The aerospace company has submitted a draft of its health care proposal already -- a step it usually doesn't take until a week or two before the Machinists vote on the contract. Still, Blondin isn't happy with the progress made with Boeing. "The talks aren't bearing any fruit," he said. So far, Boeing has proposed only "takeaways," Blondin said. The aerospace company has proposed to eliminate its pension plan for new Machinists and offer a 401(k)-type plan instead. Boeing maintains the more portable retirement savings plan appeals to younger workers. The Machinists also are looking for "substantial increases in wages," Blondin said. "We sacrificed during the lean times," he said. "Now it's time for Boeing to pay up." Boeing's contract with SPEEA comes due Dec. 1. The engineers union last went on strike against Boeing in 2000 for 40 days. SPEEA's Goforth was no more optimistic about contract talks than was the Machinists' Blondin. Both unions say the company is trying to negotiate too much with employees and too little with labor leaders -- an act that could violate unfair labor practices. "We're heading into these negotiations in a negative context," Goforth said. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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