Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, September 14, 2008 Boeing strike: shades of 1995 By Michelle Dunlop Herald Writer EVERETT -- Outsourcing, medical benefits and a complaint to the labor board -- those are a few of the similarities that the Boeing Machinists' strike of 1995 shares with this year's walkout. As the union's strike enters week two, observers look at history to try to gauge how long this work stoppage might last. Although no two labor strikes are the same, the Machinists' strike of 1995 offers some perspective on the importance of job security and health insurance in negotiations between the Boeing Co. and its Machinists union. The strike of 1995 lasted 69 days, making it the union's second-longest strike against Boeing. Last week, Boeing's chief financial officer, James Bell, predicted this year's strike will last at least a month. "There are still significant issues between us that we're going to have to address," Bell said at the Morgan Stanley 2008 Global Industrials CEOs Unplugged conference in Dana Point, Calif. Machinists on the picket line in Everett say they're prepared to stay out as long as it takes. "We will continue this fight 'one day longer' than the company can afford until they meet your demands," wrote Tom Wroblewski, district president of the International Association of Machinists, in a note to members. Union leaders made similar pledges in 1995. Thirteen years ago, Boeing had just begun delivering its latest jet, the 777, in May 1995. With the help of the 777, Boeing had broken out of a five-year order slump that year, bringing in 441 new requests, compared to a paltry 125 in 1994. The 777 won 101 orders in the year of the strike. Boeing had planned to deliver 19 of its latest widebody jet that year and another 30 in 1996. But when the company and its Machinists union, which represented 32,500 members, tried to reach an agreement on a new contract, the company's 777 delivery goals flew out the window. Boeing already has said the strike will affect the delivery of its new 787 Dreamliner and could delay the first flight of the jet, expected late this year. In 1995, Boeing wanted Machinists to pay a portion of their health-care costs rather than offering a no-contribution plan. "We've reached the point where we just can't keep absorbing those increases," said Russ Young, then Boeing's spokesman, in 1995 Herald story. The Machinists then didn't see it Boeing's way. "How can Boeing justify the destruction of so many jobs or the slashing of health insurance coverage for workers' families?" said Bill Johnson, then district president, in 1995. Machinists saw the '95 strike as symbolic for labor unions, standing up to Boeing over outsourcing. Union leaders also filed complaints against Boeing with the National Labor Relations Board, as they have in 2008. The allegations then were that Boeing made last-minute demands for changes to worker health insurance without providing the union with enough time to respond. The relations board agreed with some of the union's claims and a federal mediator stepped in. Forty-five days into the strike, union leaders urged members to accept a new offer from Boeing. But the Machinists rejected the offer, which still called for members to pay a portion of their health care premiums. When the two sides reached an agreement in mid-December, the contract allowed Machinists to switch to a no-contribution plan or keep their traditional health care plan and pay a small premium near the end of the contract. Just as significant for the union, the deal included language meant to limit member layoffs from outsourcing and give the union some oversight on subcontracting. After 69 days, the strike cut the company's 777 deliveries short. Boeing delivered 13 777s, six shy of its goal, that year. The company made back some of its delivery shortfall the next year, surpassing its goal by two to deliver 32 777s. Analysts estimated that the average Machinists would need two years to recoup from lost wages from the strike. A couple of major differences are apparent between 1995 and 2008: the number of low-seniority workers and the amount of banked overtime. In 1995, after several years of downturn, the company had laid off most of the newer Machinists. That's not the case in 2008. Boeing can't seem to hire enough workers, frequently hiring 100 Machinists weekly. And workers in 1995 hadn't been working the furious pace that today's Machinists have. Boeing has raked in 1,000 orders a year the past few years, forcing the company to ramp up production and demand more overtime. Through the ups and downs, the issues of outsourcing and medical costs remain at the forefront. Last week, Boeing's Bell said the company needs to make sure "we have a process that allows us to put the work where it can best be done." International Machinists president Tom Buffenbarger highlighted the union's concerns about job security shortly after the strike began. "We've learned it's not enough to have a good-paying job if that job can disappear at any time," he said. The Associated Press contributed to this report.

1. Snohomish County man dies of swine flu 2. Lynnwood bank reprimanded by government 3. Police ID make of vehicle in fatal hit-and-run 4. Armed man shot by deputies in Arlington 5. IRS joins puppy mill investigation 6. Jetty Island ready for sand castles 7. Boeing's 6-month tally: 1 net order 8. Warriors & Patriots: Many American Indians served before getting full citizenship rights 9. Movin' out 10. Marshals seize swindler's home 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Warriors looking for balance • Three Scots vying for QB slot • Jackson looks for another title • Decorated veteran continues to serve as active volunteer • City Council reviewing sign regulations • Wildcats get a peek at newcomers • Lynnwood still in rebuilding mode • Shoreline feels a kindergarten growth spurt • Leave the patriotic pyrotechnics to professionals, cities urge • Trading dollars for kilowatts New PUD energy conservation programs save ... • By John Wolcott SCBJ Editor • Record crowd at Paine Field’s General Aviation Day as FHC Celebrate ... • Celebration of aviation's history and future presented in multiple venue ... • The time is ripe for small businesses to take no prisoners • EPA proposal to regulate global-warming gases would be costly for small ... • Innovation helps the town of Forks to offset tough economy • Powering the people