Boeing in tentative deal to end 52-day strike

By Bill Rigby and Ilaina Jonas

NEW YORK, Oct 28 (Reuters) - Boeing Co and its biggest union have agreed a tentative deal to end the longest strike at the planemaker's plants for 13 years and halt revenue losses estimated at $100 million a day.

At the fourth attempt, and with the help of a federal mediator, the union representing 27,000 assembly workers said late on Monday it had struck a four-year deal with Boeing that provided job security for its members and limited outsourcing.

News of the breakthrough came as a relief to aerospace companies worldwide, part of an increasingly globalised network of suppliers that has been the source of disputes over job continuity between Boeing and workers in the Seattle area.

Boeing, whose plants have been closed for 52 days, confirmed the tentative agreement, saying it had retained the flexibility it needed to run its business.

If the deal is ratified by the members of the International Association of Machinists and Aerospace Workers (IAM), it will end the longest Boeing strike in recent memory. The union walked out for 28 days in 2005 and 69 days in 1995.

Boeing will then almost immediately face contract talks with the Society of Professional Engineering Employees in Aerospace (SPEEA), which represents over 20,000 engineering workers. SPEEA said on its website negotiations would start on Wednesday.

Chicago-based Boeing last week reported a 38 percent drop in quarterly profit due mainly to the machinists strike and withheld a financial outlook until the dispute was over.

Once the strike ends, Boeing is also expected to give an update on its 787 Dreamliner that could include fresh delays to the programme, already 16 months behind schedule.

AEROSPACE STOCKS OUTPERFORM

Following news of the provisional settlement, European aerospace stocks mainly outperformed a market rally that began in Asia following weeks of pressure from the financial crisis. Shares in one of Boeing's French suppliers, cabin doors maker Latecoere , soared 12 percent.

The industry has been squeezed by the strike just as the economic downturn worsens the plight of many airlines already weakened by high oil prices, casting doubt on aircraft demand.

Both Boeing and European rival Airbus have record backlogs, but Airbus last week suspended plans to increase production and froze its output to prepare for a downturn.

Boeing and Airbus say they expect to provide more financing to struggling airlines in the coming year.

Both Boeing and the machinists union had shown recent signs of wanting an end to the strike.

Wall Street analysts estimated Boeing was losing $100 million in revenue for every day its plants were closed, implying cumulative revenue losses of $5.2 billion so far.

Striking workers lost their usual healthcare benefits after one month on strike and were receiving a meager $150 per week strike pay from the union.

"I'm excited that hopefully it's a good contract," said Laura Gross, a 22-year old sealer working on Boeing's 777 widebody production line at Everett, near Seattle. "It's exciting to think we'll be getting something good out of this."

The deal, which has the unanimous support of the IAM's negotiating committee, will be voted on in three to five days.

The IAM said details of the accord would be withheld until they can be distributed to its members in all Boeing locations.

If approved it would end a saga of failed negotiations and public bickering. IAM members rejected Boeing's initial contract offer on Sept. 3, and went on strike on Sept. 6 after 48 extra hours of emergency negotiations came to nothing. The two sides came back to the bargaining table briefly in mid-October without success. The most recent negotiations started on Thursday.

Boeing shares fell 6.4 percent to $42.46 in a weak market on Monday. They have fallen 52 percent this year, underperforming the S&P Aerospace Index , down 44 percent. (Additional reporting by Laura Myers, Tim Hepher. Editing by John Stonestreet)