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Engineers strike Boeing
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February 9, 2000: 4:28 p.m. ET
Engineers, tech workers walk off the job as union, company fail to reach accord
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NEW YORK (CNNfn) - Thousands of Boeing Co. engineering and technical employees walked off the job Wednesday despite attempts by the nation's top federal mediator to prevent a strike at the nation's largest aircraft maker and exporter.
Federal mediation efforts Monday and Tuesday failed to resolve differences over pay and bonuses between the company and the Society of Professional Engineering Employees in Aerospace. Most of the workers are in the Puget Sound area near Seattle, although some are in Wichita, Kan.
"Obviously we are disappointed that we were unable to reach an acceptable solution through the course of mediation in the past two days," Boeing spokesman Peter Conte said. "Boeing is a company that strives to work with unions to negotiate in good faith, and to be fair and reasonable in the offers it makes." No further talks have been scheduled.
Maintaining operations
The union represents about 22,500 employees in Washington state, Kansas, California, Florida, Oregon, Texas and Utah, though only about 13,000 are dues-paying members. Still, the union leadership vowed that the strike would be widely supported by nonmembers as well as members. Boeing has about 197,000 employees overall.
"They spit in the face of every technical employee at the Boeing Co. and we are going to stand up to that challenge," said Charles Bofferding, the union's executive director, in announcing the strike. "We will stun the company with our strike and we will stop the company with our strike."
Conte said Boeing (BA: Research, Estimates) will attempt to maintain operations "to the highest degree possible," though he conceded that the effect of the strike on operations "will be dependent on the level of disruption in the workplace and the number of people who walk off the job."
The strike will disrupt more than just design of new aircraft. The union members' duties include final approval of all aircraft before delivery, a process required by Federal Aviation Administration regulations. Union officials say the FAA assures them that only those with up-to-date certification will be allowed to make inspections, forestalling any attempt by Boeing to turn to retirees.
Lack of response
The employees also make up rapid response teams, consisting of both engineers and technical workers, who are on call to assist airline customers when an airplane is grounded because of mechanical problems. The longer the plane is stuck, the more flights must be canceled and the unhappier the customer becomes.
The only previous strike by the union was in 1993, and it lasted only one day. A short strike of a week or less probably won't hurt Boeing, said Chris Mecray, an analyst with Deutsche Banc Alex. Brown, but a long strike could hit the company's bottom line more than the cost of a settlement. For that reason, Mecray thinks Boeing will settle with the union rather than risk a long strike.
"My guess is it gets settled without too much time, rather than have them (the company) risk the progress they've made with Wall Street recently," Mecray said.
Mecray doesn't think the stock will take a big hit on news of the strike. "It's so hard to gauge an impact of the strike, I think people would be reluctant to panic-sell," he said.
The stock, a Dow component, fell 2-5/16, or almost 6 percent, to 38-5/8. It had already lost 14 percent in the three weeks between Jan. 19, the day it reported better-than-expected fourth-quarter results, and Tuesday's close.
Rank and file
Rank and file members of SPEEA rejected two earlier company proposals, including one endorsed by the union leadership. Union negotiators sought more guaranteed pay raises and bonuses similar to those received by about 44,000 production workers represented by the Machinists union.
But the strike is spurred by more than just wages. SPEEA negotiator Stan Sorscher said Boeing's drive to boost profitability by cutting costs, and by slashing spending on research and development, had embittered many employees.
"Talented young employees are leaving. Career planning for talented experienced employees centers on early retirement. Productivity ... in the workplace has reached lows unimaginable two years ago," Sorscher wrote in an e-mail.
Boeing had a record year for deliveries in 1999, as airlines rushed to replace planes grounded by tougher noise regulations that took effect this year. But production and deliveries are projected to drop this year. Competitor Airbus Industrie is making gains in new jet orders and market share. 
-- from staff and wire reports
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The Boeing Co.
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