TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/101689/10168900.018

Text File | 1990-09-19 | 4KB | 67 lines

BUSINESS, Page 57

Grounding a High-Flying Giant

Boeing's machinists demand a bigger piece of its prosperity


    Bundled against the late-night chill, placard-carrying pickets
took up their posts last week at plant gates all around Seattle.
Suddenly, the world's busiest producer of commercial aircraft was
crippled. The strike at Boeing by more than 57,000 members of the
International Association of Machinists and Aerospace Workers
brought new-plane production to a virtual halt at the company's
main manufacturing plants in the Seattle area, where 43,000 of the
machinists work, and at other factories in Portland, Ore., and
Wichita.

    The first strike against Boeing in twelve years, the walkout
came after a federal mediator failed to bring labor and management
together on a new contract. Union Vice President Justin Ostro drew
cheers from machinists in Seattle's Kingdome when he declared,
"There is no good time to strike, only a right time to strike."

    The proposed three-year contract that the machinists rejected
offered pay raises of 4% in the first year and 3% in each of the
next two, bonus payments of 8% the first year and 3% the second,
improved health benefits and a 20% cutback in mandatory overtime.
Boeing considered the offer "generous," said spokesman Russell
Young. But union official Jack Daniels of District 751 in Seattle
dismissed it as "peanuts," pointing to Boeing's profit of $614
million in 1988 and $356 million in the first half of this year.

    The strike catches Boeing with an unprecedented order backlog
of 1,063 commercial jets valued at $80 billion. Delivery dates are
in danger of slipping as the company tries to meet surging demand
from airlines eager to modernize their aging jet fleets. Earlier
this year Boeing was forced to stretch out delivery schedules for
its newest jumbo, the 747-400, and to hire hundreds of workers from
rival Lockheed to get the program back on a credible schedule. Last
week Boeing executives were reassuring customers that the strike,
if it is short, would not mean further delivery delays.

    Ironically, aerospace experts said, both sides in the dispute
could use a breathing spell. The company needs to perform plant
maintenance and restock parts for the assembly lines, and the
machinists want to relax after a long stint of forced overtime --
as much as 200 hours a quarter in many cases.

    Yet a strike as long as the last one, which went on for 45 days
in 1977, could be devastating to all sides. Boeing is far and away
the largest employer in both the Seattle area (where it has 106,000
workers) and the state (144,725) and spends as much as $1 billion
a year on supplies in the region. A prolonged stoppage would cost
thousands of jobs in other areas, ranging from parts manufacturers
to restaurants. Increased unemployment would have a heavy impact
on the state government, which has no income tax and is heavily
dependent on sales-tax revenue. Around the world, delayed plane
deliveries would keep aging aircraft flying thousands of additional
miles instead of being replaced by new Boeing wide-bodies.

    No new talks have been scheduled on ending the walkout. The
machinists can fall back on their $90 million strike fund, but
Boeing is under pressure to deliver 94 more jet airliners before
year-end. In the interim, Boeing intends to use supervisors and
nonunion personnel to put the final touches on dozens of jets that
stand virtually completed at its assembly plants in Renton and
Everett, Wash. The company pledges to observe strict safety
standards. But the Federal Aviation Administration, taking no
chances, announced last week that it would "significantly expand"
its inspections of the company's assembly lines to ensure
compliance with FAA rules.