Boeing’s talks with Machinists fail; strike to start

Boeing Co.’s extended contract talks with its largest union ended in failure today, setting up a walkout slated to start at midnight that will halt aircraft production.

“Despite meeting late into the night and throughout the day, continued contract talks with the Boeing company did not address our issues,” the International Association of Machinists and Aerospace Workers said on its Web site. The union represents about 27,000 employees in Washington state, Oregon and Kansas who make parts and assemble planes for Chicago-based Boeing, the world’s second-largest commercial aircraft maker.

The machinists rejected Boeing’s proposal on Sept. 3 and voted for a strike that was to have begun at 12:01 a.m. the next day. Instead, Boeing and union negotiators agreed to a federal mediator’s last-minute request that they extend the contract by two days and seek a compromise.

“We worked hard with the union and mediator,” said Boeing spokesman Tim Healy. “We pursued different options, but in the end we were too far apart to reach an agreement. We’re open for further discussion but no talks are scheduled.”

Boeing broke off talks Aug. 28 by issuing a final proposal it called the best in the industry that included an 11 percent pay raise and higher pension payments. The company refused to make changes the union had sought to limit the use of outside contractors for work the machinists have traditionally done. Boeing also demanded that workers pay higher medical co-pays and deductibles.

Emboldened by the planemaker’s record profits in recent years, union leaders had wanted at least a 13 percent wage increase, even higher pension payments, no changes to health care and the ability to take back some of the work that’s being farmed out.

The walkout comes amid unprecedented demand from airlines for newer, more fuel-efficient planes and may keep the 787, Boeing’s most successful new plane, from flying this year. A month-long strike would shave 31 cents a share off Boeing’s earnings and cost $2.8 billion in lost revenue, estimates New York-based Merrill Lynch & Co. analyst Ronald Epstein.