Boeing talks with Machinists to resume

Published 10:45 pm Monday, October 20, 2008

EVERETT — Forty-five days into a labor strike, a federal mediator has called negotiators for the Boeing Co. and its Machinists union to Washington, D.C., to resume contract talks Thursday.

On Monday, Arthur R. Rosenfeld, director of the U.S. Federal Mediation and Conciliation Service, called the Machinists’ strike “a priority matter for this agency.” The strike, which began Sept. 6, has brought to a standstill jet production at Boeing’s factories. The revived negotiations begin the day after Boeing will give its quarterly financial report to investors.

About 27,000 members of the International Association of ­Machinists and Aerospace Workers will remain on strike until a new three-year labor agreement can be reached.

The Machinists overwhelmingly rejected Boeing’s three-year contract offer in early September, saying the deal fell short in terms of health care, wages, pension and job security. The union and Boeing have talked frequently with a mediator during the work stoppage.

Boeing spokesman Tim Healy confirmed the mediator’s request for new talks. Analysts estimate the strike costs Boeing as much as $100 million daily in deferred revenues.

“We want to resolve this strike quickly, but we need to make sure we have an agreement that preserves our flexibility to manage our business and compete in an uncertain and challenging economy,” he said.

The union and Boeing returned to the table the weekend of Oct. 11 for the first time since the strike began. But talks, which revolved around job security issues, broke down just a few days later.

“We hope this meeting marks a major step forward to resolve this strike. The union will continue to do everything possible to bargain a contract that addresses the concerns our members have identified,” union leaders wrote on the Machinists’ Web site Monday.

Boeing reports its third-quarter earnings Wednesday. The company also is expected to provide investors with an assessment of the strike’s impact on production as well as a forecast for the remainder of the year. Boeing delivered 84 commercial jets in the third quarter. That’s down from 126 jets delivered in the second quarter and 115 in the first quarter.

The work stoppage also is delaying Boeing’s new 787 Dreamliner jet. The fuel-­efficient 787 already was 15 months behind schedule when the strike began. Boeing’s outsourcing strategy on the Dreamliner is one of the major sticking points in negotiations with the Machinists.

The aerospace giant not only sent design and production work for the 787 to global partners but also allowed outside vendors to handle materials for the Dreamliner — work performed typically by the union. The Machinists are pushing for guarantees that Boeing won’t outsource about 2,000 materials handling positions on its other jet lines. The union also wants the ability to bid on work the company decides to outsource.

Boeing is scheduled to begin serious negotiations with its engineers and technical workers’ union next week.

Turmoil on Wall Street, coupled with the Machinists’ strike, has put Boeing’s stock in a downward spiral. Boeing shares closed Sept. 5, the day before the strike started, at $62.89. After another market rally Monday, Boeing’s shares gained $2.16 to close at $46.71. That’s a drop of more than 25 percent since the strike began.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.