Boeing and its St. Louis union talk cost-cutting

Deal could offer buyouts to older workers on shrinking assembly lines.
2014-02-14T03:00:00Z 2014-02-23T11:50:05Z Boeing and its St. Louis union talk cost-cuttingBy Tim Logan • > 314-340-8291

Boeing Co. and the St. Louis Machinists union went back to the bargaining table this week, with an eye toward lowering costs on military planes and avoiding layoffs.

Negotiations started Monday between Boeing and District 837 of the International Association of Machinists and Aerospace Workers on a contract extension that could pave the way for buyouts, instead of layoffs, on endangered fighter jet assembly lines. The union represents nearly 2,400 workers at Boeing, most of whom build F/A-18 Super Hornets, F-15s and parts of the C-17 in north St. Louis County.

Those assembly lines are growing short.

The C-17 is due to end production in late 2015 and the F/A-18 line will close a year later unless Boeing can persuade Congress and the Pentagon to buy more. Boeing has already slowed F/A-18 production from four per month to three, in order to extend the line through 2016. It is also touting the Super Hornet as a lower-cost alternative to the F-35 Joint Strike Fighter and wants to wring out more expenses.

In a statement, Boeing said it hopes to make its St. Louis-built programs “more competitive.”

“We are pursuing opportunities that would go a long way toward determining the future of this facility,” the company said. “We recognize that reducing our rates now and demonstrating to customers our commitment to doing so, would improve our chances of getting that work. That’s what we’re trying to accomplish in these negotiations.”

Union officials did not return calls seeking comment Thursday. But in a series of letters to his members over the last few weeks, District 837 president Gordon King said Boeing had made it clear that — due to the downturn in work — “layoffs will be inevitable by the end of the year” and that the union hoped to create an “enhanced retirement option incentive,” allowing workers to take voluntary buyouts.

“This incentive would benefit the membership as a whole by reducing the impact of any future layoffs,” King wrote last week.

The union’s current contract has no buyout provision and mandates layoffs by reverse seniority, according to a copy on the union’s website. A person familiar with the talks said the average age of Boeing’s unionized workforce here is in the mid-50s and that some may willingly retire for the right package, sparing younger workers from layoffs.

A deal would likely also extend the current contract, which expires in January 2015 and tops out this year at $37.30 an hour — more than $77,000 a year — for experienced tooling workers.

A Boeing spokesman gave no timeline for the talks. King told members that, because they will only deal with economic matters, the negotiations will be faster than usual. Just last month, Boeing won a high-stakes showdown with a separate Machinists union in Seattle over production of its 777X commercial jet there.

Opening a contract that’s due to expire in less than a year highlights the urgency facing Boeing’s defense production lines in St. Louis. The company could find out this month if the Pentagon includes money for new Super Hornets in its 2015 budget request; if not, the matter will quickly move to Congress.

Tim Logan is a business writer at the Post-Dispatch. Follow him on Twitter @tlwriter.

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