Boeing, Union Reach Deal

Tentative Pact Could End Machinist Strike

Striking machinists at Boeing said last night that they reached a tentative contract agreement with the aerospace giant, ending a seven-week walkout that shut down plane production, cut into company profits and dragged down U.S. industrial output.

About 27,000 workers with the International Association of Machinists and Aerospace Workers had been on strike since Sept. 6, closing the planemaker's factories in the Pacific Northwest and elsewhere.

In a statement, the union said the four-year agreement provided limits on the amount of work outside vendors could perform in Boeing factories, which the union has described as its central demand. The union had also been concerned about Boeing's increasing reliance on international suppliers -- a shift that the union said could eventually threaten U.S. aerospace jobs.

"Your solidarity brought Boeing back to the table and made this company address your issues," Tom Wroblewski, president of the union's District 751, said in a statement. "Each of you stood up and did your part to win this battle, which was a fight against more than just Boeing, but against corporate America."

The union did not release details of the agreement. During the contract talks, Boeing had offered to boost machinist salaries, but the company and the union had been unable to agree on the outsourcing issue.

A Boeing spokesman confirmed that there was a tentative deal but declined to release any further information.

The deal was reached after five days of negotiations held in Washington. Two previous attempts involving government mediators had ended without an agreement. The two sides were called to Washington by Arthur Rosenfeld, director of the U.S. Federal Mediation and Conciliation Service.

A spokesman for the agency, which reports directly to the White House, said last week that the agency was becoming worried that the strike was taking a toll on the overall U.S. economy. The Federal Reserve said two weeks ago that the walkout had factored into a 2.8 percent drop in industrial output in September, the steepest decline in 34 years.

Boeing said last week that its third-quarter profit slid 38 percent, mostly due to the impact of the strike. Company officials said they were becoming concerned about rising recessionary pressures and softening demand for air travel that could lead to customers pulling back plane orders.

During a conference call to discuss the company's results, Boeing chief executive Jim McNerney signaled optimism that the two sides could bring the strike to a close, saying that Boeing was looking for "a way forward."

The union said it plans to hold a vote on the contract in three to five days. A simple majority is required to ratify the agreement.

Contract talks between Boeing and another key labor group are set to begin tomorrow. The company will try to reach a new agreement with 21,000 white-collar workers represented by the Society of Professional Engineering Employees.

Those negotiations had been delayed a day to give the company time to reach a deal with the machinists union. The white-collar workers' contract expires in December.