Boeing Machinists to Vote on Ending Production-Crippling Strike

By Susanna Ray

Nov. 1 (Bloomberg) -- Boeing Co. machinists will cast ballots today on whether to end the third-longest walkout in the planemaker's history as they pick up their $150 weekly union strike stipends in Washington, Oregon and Kansas.

The 27,000 workers are voting on a sweetened contract that offers a 15 percent raise over four years along with bonuses totaling at least $8,000 and higher pension payments. Concerns the International Association of Machinists and Aerospace Workers had about job security were also addressed in the new proposal, which union leaders unanimously endorsed this week.

The 57-day strike has idled Boeing's Seattle-area manufacturing hub, cutting profit by $10.3 million and revenue by $100 million each day and further delaying the new 787 Dreamliner. Even if employees accept the new contract and start going back to work tomorrow night as planned, the company may need until December to get assembly lines back up to speed, said Joseph Campbell, an analyst at Barclays Capital in New York.

``Boeing doesn't want to budge in anything that would affect its competitive position in a downturn, so this is probably the best deal the machinists are going to get given the economy and the way the market is headed,'' said Richard Aboulafia, an analyst with aviation consulting firm Teal Group in Fairfax, Virginia, who has been a Boeing watcher for more than 20 years. ``Still, there is a lot of anger toward management'' that could prompt some workers to reject the new offer, he said.

To pass, the contract needs support from 50 percent of the voters, plus one. The voting takes place today from 8 a.m. to 6 p.m. local time and the results will be announced when all the ballots have been counted, the union said. The voting in the Puget Sound area is taking place at the union hall, fairground and community college were workers have been picking up weekly strike-pay checks in person on Saturdays since Sept. 27.

Record Profits

The machinists, who build planes and parts and maintain the factories, walked out Sept. 6 after an 80 percent ``no'' vote against Chicago-based Boeing's first offer. The union maintains that Boeing's record profits since the last contract and unprecedented orders have made it an ``island of success'' in the slumping economy and that its members deserve a greater share of the work and the earnings.

Boeing had a record order backlog for 3,725 planes worth $276 billion at the end of September, boosted by airlines eager to save on fuel by using newer models.

The company has said it needs to make sure any contract improvements still would be affordable if there's a slowdown and that it needs to continue its outsourcing policy to remain competitive as new aviation companies are founded and its only larger rival, Toulouse, France-based Airbus SAS, builds plants in China.

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net.