Boeing Braces for Strike After Talks Fail

Machinists' Walkout Likely to Paralyze Crucial Operations

More than 27,000 Boeing assembly workers were poised to walk off the job this morning, after last-ditch talks between the giant aircraft manufacturer and union negotiators broke down over disagreements about wages, pensions and job security.

Members of the International Association of Machinists and Aerospace Workers were prepared to strike just after 3 a.m. EST, a move that could paralyze Boeing's manufacturing plants as the company is experiencing record profits and working on what the union says is a seven-year backlog of orders.

Angry union negotiators called the strike last night after talks aided by a federal mediator failed to produce an agreement. Union members had voted overwhelmingly to strike Wednesday night but grudgingly agreed to a 48-hour contract extension to try to reach a deal.

Most of the workers affected are based at plants in the Seattle area; others work in Gresham, Ore., and in Wichita, Kan.

"This company disrespected the process, bargained illegally and most of all, disrespected the finest aerospace workers anywhere on the planet by failing to meet your expectations," Tom Wroblewski, the union's district president, said in a message to members.

A Boeing spokesman confirmed the end of negotiations, saying, "Efforts with the mediator are over."

The strike marks a critical test for organized labor, which has struggled to make gains as competition for labor has expanded across the world, diminishing workers' leverage. But the Boeing electricians, riveters, painters and others are in an unusually strong position because they are skilled laborers working for a company that has been highly profitable in recent years.

"This is a case where a union does have significant leverage," said Robert A. Bruno, an associate professor of labor and employment relations at the University of Illinois at Chicago. "The employer is very profitable and has the capacity to pay. And they are in a critical industry that you cannot afford to not have functioning."

Boeing officials said their three-year contract offer, which included an 11 percent wage increase and a 3 percent cost of living increase, plus potential bonuses, was generous for workers who earn an average of $56,000 a year before overtime.

The union, however, had pressed for more, including a commitment to limit the use of outside contractors. The union also said the company's proposal was riddled with givebacks -- on pensions and the cost of health insurance, for instance -- which infuriated workers who expected more from a company that reported more than $900 million in profit in the last quarter.

"There is a lot of resentment," union spokeswoman Connie Kelliher said. "Workers do not understand why there should be any takeaways when the company is enjoying good times."

Analysts said a prolonged strike would erode the profitability of Boeing's commercial aviation division, which has been booming with a record $275 billion backlog of orders. Scott Hamilton, who operates Leeham Co., an aviation consulting firm based in Issaquah, Wash., estimated that a strike could cost Boeing $2.85 billion in deferred revenue and $259 million in earnings per month.