Wednesday, August 31, 2005

Boeing union calls for strike, Airbus cheers.

Business: As usual, unions come along to screw up what was a resurgence for Boeing at the wrong time.

SEATTLE - Boeing Co. on Tuesday presented what it called its final contract offer to more than 18,000 Machinists, whose leaders promptly urged the workers to reject the proposal and strike. A top Boeing executive warned that a strike would be devastating. In a statement posted late Tuesday on its Web site, the union said the aerospace giant was insisting on concessions and takeaways in a "corporate strategy to break the workers who have built this company." Union members will vote on the three-year offer Thursday, with the current contract set to expire Friday. "I just cannot emphasize enough what a strike would mean to us because we would absolutely be walking away from our commitments to our customers," Alan Mulally, head of Boeing's commercial airplanes division, told a news conference earlier Tuesday after the company released its last offer. "There's just no way we would recover." If the union members vote to strike, Mulally said the company would have no choice but to slowly shut down operations. And he added that customers have been clear that such a disruption could cause them to choose a rival airplane maker — notably European archrival Airbus SAS.
Analyst Richard Aboulafia with the Teal Group said union workers could expect to get other concessions but should expect a tough fight over pensions. That's because pensions represent a huge fixed cost that the company can't scale back in a downturn. "I think they've found the one area that management cannot afford to give in to, just for the long-term health of the company," he said. Still, Aboulafia said the union is in a strong position since Boeing cannot afford a long-term strike that would disrupt airplane production just as business is picking up.
or Boeing could just fire people to cut costs being a business that is slowed down by a strike. No one is in a position to start fighting at this point.

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