Both Boeing and Workers Could Win the Strike

On Saturday, Nov. 1, striking Boeing (BA) machinists will get a chance to vote on a proposed contract that could end a walkout that has halted plane manufacturing at the company since Sept. 6. Union leaders are crowing about the proposed four-year deal, calling it a victory for the workers. But management, while bruised, is walking away from the table with a few key wins, too.

For one, the company will be able to outsource as much work as it wants to on its new 787 commercial jet, the so-called Dreamliner that will be the most important plane in Boeing's lineup for the next decade or longer. The managers also exempted the planes and other products it makes in its defense operations from contract terms the International Association of Machinists & Aerospace Workers, or IAM, demanded.

"It was a pretty genuine compromise," says Paul H. Nisbet, an analyst with JSA Research in Malta, N.Y. "Boeing [managers] apparently held onto the right to run their business."

Just how much of a compromise will be something for workers to decide when they vote. IAM leaders, eager to sell the deal to their 27,000 striking workers, are pointing to the wage and benefit gains and job-security terms they've won.

Union Gains

"Our union has delivered what few Americans have—economic certainty and quality benefits over the next four years," said Tom Wroblewski, president of IAM's District 751 unit, which represents Puget Sound area workers. "In this round, we won the battle and made some significant gains."

The IAM was able to stave off changes management had wanted in health care and pension benefits, for instance. Boeing originally sought to shift some costs in medical care onto employees, but the new deal freezes the structure on the same terms as were adopted in a 2005 contract settlement. The union also forced the managers to back away from plans to deny a traditional "defined-benefit" pension plan to future workers and give them a 401(k) plan instead, and it in fact won increases in the traditional benefit. They also won wage increases of 5% in the first year, 3% in the second and third years, and 4% in the final year of the contract.

IAM leaders are pointing to a few other major gains:

•Some 2,200 facilities and maintenance employees have their job security guaranteed for the life of the contract.

•The IAM can compete for work that moves from one Boeing facility to another. If its members can do the work more cheaply than outsiders, they can get the work.

•Some 2,920 forklift drivers and other shipping personnel will not be laid off.

•Outside vendors must deliver products to IAM members in designated area, except for work on the 787.