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Originally published Wednesday, July 30, 2008 at 12:00 AM

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Machinists say contract talks with Boeing "in deep trouble"

Contract talks with Boeing are "in deep trouble," the lead negotiator at the Machinists union said Tuesday, implying that a strike in September is likely if the company's offer doesn't improve.

Seattle Times aerospace reporter

The lead negotiator for the Machinists union said Tuesday that contract talks with Boeing are "in deep trouble" and implied a strike in September is likely if the company's offer doesn't improve.

The tough talk from Mark Blondin, lead negotiator for the International Association of Machinists (IAM), came during a joint teleconference with representatives of the white-collar engineering union at Boeing.

The two unions also delivered a scathing critique of the state of the 787 Dreamliner program and of the company's strategy of global outsourcing.

The outsourcing issue is linked to the contract talks, said representatives of both the IAM and the Society of Professional Engineering Employees in Aerospace (SPEEA), because the outcome of the negotiations will show what value Boeing places on its Puget Sound-area work force.

But with less than five weeks before the contract with the Machinists expires, talks between Boeing and the IAM "aren't bearing any fruit," said Blondin.

"So far, all they are talking about is take-aways," Blondin said. "If that continues over the next couple of weeks, they are in deep trouble."

The outsourcing of 787 work and the prospect of Boeing sending out more work on future jets add tension to this year's labor negotiations, which climax next month ahead of the new plane's expected first flight in October.

The IAM contract covers more than 26,000 Boeing employees, mostly in the Puget Sound region but also in Portland and Wichita, Kan.

Talks began in May to replace the contract that expires Sept. 1, Labor Day this year. They will move into full-time negotiations Aug. 21 at the SeaTac Doubletree Inn.

Blondin said Boeing is "acting right now like it is in bankruptcy court, rather than where they are with a record backlog of orders and record profits."

"There's enough orders right now to sustain two or three bargaining cycles, and we know it," he said. "We're going to get our share of those profits."

Blondin said he wants substantial increases in wages and pensions, and the existing health-care plan left intact.

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Boeing's top labor negotiator, Doug Kight, told employees this month that the company will release full details of its final offer by Labor Day weekend, as few as eight days after intensified negotiations begin. The membership will vote on that offer Sept. 3.

Message to managers

In a message to managers Tuesday, Kight gave details of two retirement proposals, which would affect anyone hired after next Jan. 1 — shifting their retirement benefits from the current pension plans toward 401(k)-type investment plans; and eliminating early-retiree medical benefits. He said Boeing will separately offer increased pensions for existing employees.

Kight's message gave no hint of an impasse in the talks.

"We're about three weeks away from moving to the hotel for the final phase of negotiations," Kight wrote. "I am pleased with our progress."

But Blondin cited those two proposals as particular sticking points.

He said the early-retiree medical-benefit proposal was raised in the last negotiations, in 2005, that led to a monthlong strike. And he said another of the strike issues then, Boeing's push to carve out Wichita employees into a separate bargaining unit with a separate contract, has also been resurrected.

"I'm very surprised Boeing has come out with the same tactics in 2008," said Blondin, who headed the District 751 Machinists when they went on strike three years ago. "Our members didn't stand for those divisive tactics last time. I don't see it happening this time."

A strike in September would be a serious blow to the Dreamliner program. The first delivery to customers is already delayed at least 14 months, with many follow-on deliveries two years and more late.

SPEEA's negotiation schedule is not as pressing. The engineers' contract doesn't expire until Dec. 1.

Stan Sorscher, director of research for SPEEA, said the union has argued for a long time that outsourcing airplane design cannot work as it may for simpler products, say sneakers.

Building something as complex as a plane requires a tight community of experienced engineers and mechanics working together to overcome the inevitable challenges, he said.

"We thought the 787 would be a test case for this," Sorscher said. "The results are in."

Sorscher said there is internal debate within Boeing's leadership over the lessons learned from the 787's difficulties, and how future planes will be built.

In particular, he said, Boeing is looking ahead strategically to its long industrial relationship with China. The Chinese have announced plans to build a large airliner, and some 20 years out are expected to be a significant player in commercial aerospace.

"Boeing is considering whether to compete with China or to move more business to China," Sorscher said in an interview, arguing that now's the time to influence that decision.

Boeing spokesman Jim Proulx said China is a valued customer and partner, and "it is our intent to continue to grow that relationship far into the future."

As for how the contract negotiations will reflect Boeing's view of the local work force, Proulx insisted the company fully realizes "the importance of the IAM and SPEEA membership to our success."

The outcome of the September vote may depend on whether the membership believes that. It may also come down to a more basic shop-floor calculation.

One rank-and-file member who requested anonymity said only a strike will demonstrate to workers that they got the very best deal.

"Negotiators need proof they drove the best bargain they could, so a strike is almost a given," he said. "The real debate is on its duration."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Copyright © 2008 The Seattle Times Company

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