Boeing Co machinists start returning to work today after accepting a contract with 15 per cent raises, ending a strike that idled the planemaker’s factories for eight weeks and cut profit by about $10.3 million a day.
The four-year contract was approved last night by 74 per cent of the voters, the International Association of Machinists and Aerospace Workers said in Seattle, home to Chicago-based Boeing’s manufacturing hub. The first workers are scheduled to return late today with the start of the third shift.
“We’re looking forward to having our team back together to resume the work of building airplanes for our customers,” said Scott Carson, Boeing’s top commercial-planes executive.
The world’s No. 2 commercial-jet builder may need until December to get assembly lines back up to speed, said Joseph Campbell, an analyst at Barclays Capital in New York.
The strike by the union’s 27,000 Boeing members in Washington state, Oregon and Kansas started September 6, costing Boeing about $100 million in lost revenue each day and further delaying the 787 Drea-mliner.
“Most of it eventually will be made good, though it’ll take a year or more,” said Richard Aboulafia, an analyst with aviation consulting firm Teal Group in Fairfax, Virginia. No airlines cancelled their orders because of the strike, so “those customers will get their jets and they will pay for them.”
Boeing has said it will give a new profit forecast and an update on the 787 programme after workers return and it can assess the full impact of the stoppage.
The company had been building about 40 planes a month to fill a record $276 billion order backlog, boosted by airlines eager to save on fuel by using newer models. That’s one reason the union insisted on a bigger share of the profits for its members.
Boeing Shares: The company’s shares have fallen 21 per cent to $52.42 in New York Stock Exchange trading since the September 3 vote to strike. During that time the global credit crisis ballooned, US gross domestic product contracted and the two-decade expansion in consumer spending came to an end. The walkout was blamed in part for a September decline in US industrial production that was the biggest since 1974.
“There’s over seven years of airplanes to be built, and the situation with the financial market didn’t change that,” IAM District 751 President Tom Wroblewski said last night. “In fact, while we were on strike they even sold more airplanes.”
The 57-day walkout was the third-longest of seven in the union’s 73-year history. Workers who averaged $54,000 a year in salary had to get by on union strike pay of $150 a week. 57-Day Walkout
“I think the union’s out of touch with reality” and shouldn’t have gone on strike, said Don Icenogle, 45, an inspector at the plane-development center in Seattle who voted “yes” both times. “This isn’t that different a contract from the first one, and yet 57 days later it was approved.”
The machinists won raises of 15 per cent over four years, bonuses totaling at least $8,000 in the next three years and increased pension payments. In addition, they won’t have to pay more for their health-care costs as Boeing had wanted.
