- The Washington Times - Friday, September 30, 2005

ASSOCIATED PRESS

Boeing Co. welcomed back airplane assembly workers yesterday after a four-week strike but now faces another potential contract showdown with engineers and technical workers, whose walkout five years ago hurt production.

Analysts said the aerospace manufacturer emerged much better than initially feared from the strike by 18,400 members of the International Association of Machinists and Aerospace Workers, who started returning to production lines in the Pacific Northwest and Wichita, Kan., after overwhelmingly approving a new three-year contract on Thursday.

Many observers had predicted workers could stay off the job two months or more, hearkening back to a 1995 strike by the same union that lasted 69 days. Instead, a relatively quick settlement lets Boeing get back to focusing on its competition against rival Airbus while working to avert another labor standoff in December, when contracts for another 18,000-plus workers expire.

Boeing is working with its airline customers to reschedule the 25 to 30 airplane deliveries that originally were scheduled for September but were delayed because of the strike. Analysts said the company should be able to make them all up in the coming months with overtime work.

“Our customers are counting on us, so we’ll be focused on returning to production and a steady stream of deliveries to our customers,” said company spokesman Chaz Bickers in Seattle, where Boeing’s commercial airplane production is based. “We’re glad to have our team back,” he added.

The Chicago-based company said the total cost of the Machinists’ new contract is similar to the proposal they initially rejected.

Investors appeared to embrace the settlement, sending Boeing’s stock up to its highest closing price in more than four years. Shares rose 67 cents to close at $67.95 on the New York Stock Exchange, the highest since May 2001.

Aerospace analyst Paul Nisbet of JSA Research said the company “came out very well” in the final strike settlement but by no means has settled its labor issues. “The biggest challenge now is SPEEA,” he said.

The Society of Professional Engineering Employees in Aerospace (SPEEA) represents 11,850 engineers and 5,700 technical workers in the Seattle area and approximately 800 engineers in Wichita. The same issues that prompted the Machinists’ strike are on the table in the company’s negotiations with SPEEA, whose three-year pacts expire Dec. 1 for the Puget Sound employees and Dec. 5 for those in Wichita.

“It’s exactly the same situation” as with the Machinists, said Richard Aboulafia, an analyst for the Teal Group. “The unions have a lot of power.”

Bill Dugovich, a spokesman for SPEEA in Seattle, said the union seeks pension and wage increases, as the Machinists did. He would not rule out a strike.

“Our hope is that the Boeing Co. has learned a valuable lesson from the Machinists, and that is put a good offer out there, meet the needs of the employees and move forward,” he said. “This is a world-leading company and they should be paying world-leading wages and benefits.”

The engineers and technical workers staged their first major strike in February 2000 after contract negotiations stalled, surprising many by walking out and then by staying out 40 days. Boeing ended up capitulating on several key issues in order to settle and missed at least 15 airplane deliveries and work on some government contracts.

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