Boeing Earnings Creates Urgency To End Strike

Negotiations to end a Machinists union strike at Boeing gained new urgency Wednesday following a big earnings decline caused by the walkout.

SEATTLE (AP) -- Negotiations to end a Machinists union strike that has shut down commercial aircraft factories at Boeing Co. gained new urgency Wednesday following a big earnings decline caused by the walkout.

In a conference call following the company's third-quarter earnings announcement, Boeing Chief Executive W. James McNerney Jr. said he had spoken with union leaders and was optimistic about the outcome of talks that are set to resume Thursday with the help of federal mediators.

"I'm involved in the strike on a day-to-day basis," McNerney said. "There have been some informal discussions that I think have indicated a constructive head-set on both sides."

He would not identify the union leaders he spoke with.

It was the first word of direct communication between McNerney and the International Association of Machinists and Aerospace Workers since union members went on strike Sept. 6 after voting 80 percent to reject a contract offer and 87 percent to walk.

IAM President Tom Buffenbarger told The Associated Press by telephone he had not spoken with McNerney and had been told the CEO would not be at negotiations, which will take place at the Federal Mediation and Conciliation Service in Washington, D.C.

"That's why I'm not optimistic" about a quick settlement,” Buffenbarger said. "I'm not going to make a deal until McNerney signs off on that."

McNerney would not say he would come to the table.

The Chicago-based aerospace company reported net income of $695 million, or 96 cents a share, for the third quarter, down from $1.11 billion, $1.44 a share, a year earlier. James A. Bell, chief financial officer, said the strike cut earnings about 35 cents a share and an unrelated problem with galleys by another 25 cents.

"I think there's pressure on both sides," said Mark Blondin, chief negotiator for the Machinists union, as he prepared to board a flight from Seattle to Washington. "If this strike continues, Boeing's earnings are going to be down more the next quarter."

At some unspecified point, Bell said, the dispute could "start shutting down suppliers" and Boeing might lay off workers who are not on strike, although he added, "right now there are no plans to do that."

Protracted talks or another breakdown could mean Boeing will be entering the final phase of negotiations with a second union, the Society of Professional Engineering Employees in Aerospace, while the strike remains unresolved.

It's the fifth strike to hamstring Boeing's passenger and cargo jet production in less than 20 years. The Machinists were out for 18 days in 2005, 69 days in 1995 and 48 days in 1989, and SPEEA struck for 40 days in 2000.

SPEEA talks covering nearly 21,000 scientists, engineers and technical workers move into a Seattle-area hotel on Tuesday. SPEEA's two contracts, one covering professionals and the other hourly technical workers, expire Dec. 1.

Doug Kight, chief of human resources for Boeing Commercial Airplanes and chief negotiator in both negotiations, said in an AP interview that if mediation extends through Tuesday, he will stick with the effort to end the strike.

"We have a deep bench and a very solid team on the SPEEA negotiations effort," Kight said. "We have people who are very experienced and capable of carrying forth should this overlap occur."

The thorniest issue in the strike has been job security and outsourcing, with pay, retirement benefits and medical care the other key issues.

IAM chief negotiator Blondin said the union would continue to insist on hammering out job security and outsourcing language before discussing money matters.

Two days of talks, the first since the strike began, ended Oct. 13 after Boeing insisted on language to allow further outsourcing of parts and supply deliveries to the shop floor, casting doubt on the job future of 2,000 union workers after the next contract expires.

Blondin was noncommittal about the prospects for success this time.

"It's hard to say. We hope we're not going back to the table under false pretenses again," he said.

IAM represents 25,000 painters, electricians, mechanics and other hourly workers in and around Seattle, 1,500 in Gresham, Ore., and about 750 in Wichita, Kan.

Union representatives from all three sites will be present as federal mediators initially talk separately to Boeing's team in one room and the Machinists in another before deciding "when it's best to put the parties face to face," Buffenbarger said.

Tom Wroblewski, president of Machinists District Lodge 751 in Seattle, has said he's determined not to bring back a contract offer that would be rejected by angry members, as happened nearly seven weeks into the strike in 1995 -- second in length at Boeing only to a 148-day walkout in 1948.

On a rainy morning earlier in the week, a number of pickets said they would never return to work without a better deal but added that the strike had gone longer than they expected.

"We're trying to figure out how to survive and keep a living wage," said Dale Houchins, a machinist with 23 years at Boeing, outside an entrance to the 737 jet manufacturing complex in Renton.

"I was planning on retiring soon, and now I can't," said Mike Anderson, a Boeing worker since 1979.

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