Rockwell’s Newport Workers Go on Strike
Nearly 1,300 workers at two Rockwell International Corp. plants, including 630 people in Newport Beach, walked off the job Thursday after rejecting the company’s latest contract offer.
Members of the International Brotherhood of Electrical Workers Local 2295 in El Monte called for the strike at Rockwell’s semiconductor plant in Newport Beach late Wednesday night, after they narrowly voted down a five-year contract, union sources said. Hours earlier, 655 workers left their posts at a Rockwell plant in Iowa.
Disputes over the offered contract, which local union members also rejected in March, revolve around wages, medical benefits and scheduling.
Rockwell said work will continue despite the strike.
“We’re evaluating the situation and are confident that we can meet our customers’ needs,” said William Mellon, a spokesman for the Costa Mesa-based electronics giant.
Rockwell’s semiconductor unit, which generated 20% of the company’s 1997 sales and is one of its largest divisions, has a staff of nearly 2,800.
Analysts said the strike shouldn’t hurt Rockwell’s modem business, which has slumped over the past year, in the near term.
“Rockwell probably has a few months’ worth of devices stockpiled in its inventory,” said Lisa Pelgrim, a senior analyst with the research group Dataquest.
The modem semiconductor business has been beset by slowing sales as Rockwell and its rivals battled over industry platforms. Though a standard was set in February, deep price cuts continued to hurt profits.
Indeed, Rockwell’s semiconductor unit lost $27 million in the second quarter ended March 31, compared with a profit of $71 million a year earlier. Sales fell 15% to $315 million from $369 million.
When the semiconductor industry went through a boom cycle in 1995, chip manufacturers such as Rockwell and rival 3Com Corp. turned to offshore plants to bolster their production levels.
Those relationships still exist, particularly with manufacturers in Asia, said Ernie Raper, an analyst with the high-tech research group VisionQuest 2000 Inc.
Even if the strike were to last several months, Rockwell’s supply of semiconductors would not be stymied, Raper said.
“Because of the trouble with the Asian market, there are a lot of plants able to handle any demand,” Raper said. “This is not a good time to go on strike.”
Some of Rockwell’s modem customers were surprised by news of the strike.
“We haven’t even talked to [Rockwell], so it’s too early for us to comment,” said Doug Little, a spokesman for Diamond Multimedia Systems Inc., a components manufacturer based in San Jose.
The Newport Beach unit may feel a supply pinch if workers began to walk out at other U.S. chip makers, analysts warn. They point to an unrelated situation that occurred at Lucent Technologies Inc. on Thursday, where union workers voted to authorize a strike if contract talks with the telecommunications equipment giant fail.
The workers--members both of IBEW and the Communications Workers of America--represent 44,000 employees at the New Jersey--based company.
Such industrywide strikes, however, are not expected. Even if they happened, Pelgrim warns that companies such as Rockwell and Lucent could easily use offshore plants for their manufacturing needs.
The Newport Beach employees work in the plant’s clean rooms, where thin disks of silicon semiconductors are made and tested. The disks are transported to Rockwell’s manufacturing facilities in Mexicali, Mexico, where they are cut apart and assembled into chips used in telephone modems.
Striking workers rejected a contract that would have given them a 5% raise in the first year, 3% in the second, 4% in the third and fourth years and another 5% in the fifth and final year.
Union members are also “upset about lifestyle issues,” said Al Musingo, union business manager. The company wanted employees to “work 12-hour days, every other weekend and nonstandard work weeks. . . . It’s just a mess with family life.”
The strike started about 5:30 p.m., coinciding with the start of the night shift. About 100 people gathered to hear union leaders speak at a nearby building. Soon after, the crowd pulled placards out of a pickup truck and began walking along Jamboree Road.
Union employees say they have spent the past several months preparing for the walkout. Gloria Fuentes, 49 and a single parent, has been working overtime and trying to save money since December. Inez Millan, 39, refinanced her house and paid off all of her bills earlier this year.
“I had a feeling this was going to happen, so financially I’m OK,” said Millan, a Placentia resident who has been with Rockwell for 20 years.
Also Thursday, IBEW workers went on strike at a Rockwell plant in Coralville, Iowa, which makes airplane guidance and radar systems. The striking workers represent 82% of the plant’s work force.
Union members in Coralville are seeking to close a gap with employees of a plant in nearby Cedar Rapids. Average pay for union workers at the Coralville plant is about $9.34 an hour, compared with $13.52 an hour at Rockwell Collins’ Cedar Rapids facility. The workers also want to retain their medical co-payment plan.
Rockwell International workers in Cedar Rapids and in Dallas had already ratified new contracts.
Times correspondent Leslie Earnest and the Associated Press contributed to this report.
