Union Authorizes Strike Against McDonnell
McDonnell Douglas Corp. machinists authorized a strike that could start next week after their union failed to reach agreement on a new contract with the aerospace and defense company.
Members of the International Assn. of Machinists and Aerospace Workers union, which represents 6,700 at the company’s aerospace division based in St. Louis, authorized the strike after the company failed to submit a new contract proposal. The strike would not affect IAM workers in Long Beach or other cities where the company has offices, nor would it affect non-IAM workers in St. Louis.
“Our members feel used and insulted” by McDonnell Douglas, said Jerry Oulson, the local union president. Roughly 94% of the workers voting favored the strike.
McDonnell Douglas, the nation’s second-largest aerospace and defense company, has about 7,000 union workers at its St. Louis facility. A strike could disrupt work on the company’s military airplanes, including the F-15 and F-18 fighters, and the AV-8B Harrier attack plane. It is working on those planes for the U.S. military and for several foreign militaries.
McDonnell Douglas spokesman Tom Williams said negotiators met until midnight Friday, and again for several hours Saturday. Talks were scheduled to resume this morning.
The last contract between the company and the union just expired. However, it mandates a weeklong cooling-off period before a strike can begin. The period begins when the union formally notifies the company of its intent to strike. That has yet to happen, Williams said Sunday.
“Once the union gives the company notice of its intention to strike, we have seven days” before a strike occurs, he said. He added the company is ready to negotiate whenever the union wants.
“I think I can safely say nobody wants a strike,” he said. Until a strike begins, production activities continue.
Michael Day, a spokesman for the union, said talks will resume today. He said he did not know when formal strike notification would be given to the company.
Earlier this year, McDonnell Douglas reached agreement with workers in Huntington Beach who work on the company’s space and defense products. Last year, it signed a new contract with workers in Long Beach, who work on the C-17 military transport plane and commercial passenger airliners.
“They want job security, and they want something to restrict outsourcing,” or shifting work now done in-house to outside contractors, Williams said. “We want to be extremely competitive in today’s market. To do that we need to be flexible.”
Williams said the company and union have been negotiating terms for a formal contract proposal since mid-March. “There’s no contract proposal on the table,” he said.
Oulson said that “the executives are taking $40-million bonuses but refusing to offer the basic job security protections 40,000 aerospace workers at Boeing already enjoy.”
Day said outsourcing is the biggest issue in negotiations. The union believes that up to a third of its jobs in St. Louis may be outsourced in the next three years if job-security protections are not in a new contract.
A strike that halts production in St. Louis could affect McDonnell Douglas’ earnings. Higher profits from F-18 production helped the company’s military aircraft operations post first-quarter earnings of $250 million, 19% higher than for the year-earlier period.
For 1995, revenue generated by the company’s military aircraft operations--including the C-17 and the Apache helicopter made in Arizona as well as the St. Louis programs--generated 57% of McDonnell Douglas’ $14.3 billion in revenue.
A strike could also hurt McDonnell Douglas’ stock, which ended Friday’s trading at 100 on the New York Stock Exchange. That represents an 8.7% increase so far this year.
By comparison, Lockheed Martin stock has risen 6.2% and Boeing’s 5.9%. The Standard & Poor’s aerospace index is up 7%.
McDonnell Douglas is the latest U.S. aerospace company to face the Machinists Union’s wrath, which has been fueled by companies’ plans to fire some workers, then hire outside companies to perform their work.
Boeing workers struck over the issue for 68 days last year, forcing the Seattle-based aircraft maker to cut production and incur an 11% decline in fourth-quarter revenue.
Boeing eventually agreed to, among other things, give the union more say in the company’s plans to send jobs to subcontractors.
Earlier this year, Bethesda, Md.-based Lockheed Martin Corp. avoided a strike by 4,800 Machinists at facilities in Georgia, Mississippi, South Carolina and West Virginia by dropping plans to outsource 67 janitorial and maintenance jobs.
