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Sunday, August 29, 1999 Published at 10:28 GMT 11:28 UK

Business: The Company File

Boeing averts strike

Boeing is the dominant commercial plane maker

Boeing has averted a crippling strike by agreeing a generous wage package with its unions.

The world's largest commercial aircraft manufacturer was facing the prospect of industrial action from Wednesday when its contract expired with 44,000 members of the International Association of Machinists (IAM).

[ image: Boeing workers earn $44,000 a year - before overtime]
Boeing workers earn $44,000 a year - before overtime
The company has offered an 11% wage increase over three years, a 25% increase in the basic pension, and a 15% increase in shift differential pay.

It has dropped plans which would have allowed workers to be scheduled to work weekends without premium pay, and would have required them to pay part of their health insurance, now fully paid by the company.

"We've got a pretty good contract here .. The Boeing company is tough to deal with," said Art Busier of the Machinists union.

The proposals were agreed after 12 days of tense negotiations in a hotel in Seattle.

"As a world class company, with world class wages, benefits and working conditions, we want to build on that, and this agreement is another building block," said Jerry Calhoun, Boeing's lead negotiator.

The proposals will be voted on by union members on 1 September.

Four years ago, it took a 69 day strike to reach the current contract agreement.

Returning to profitability

The deal comes at a crucial time for Boeing, which is struggling to return to profitability despite bulging order books.

"No strike I've ever seen is good for anybody - not for the company, not for the employees," said Phil Condit, Boeing's Chairman.

Boeing is planning to cut its workforce sharply as production drops from the record 620 planes this year to a projected 480 next year.

It plans to reduce its staff from 238,000 in June 1998 to 185-195,000 by December 2000.

It is locked in a fierce struggle with rival Airbus Industrie, the European consortium that includes the UK's British Aerospace, France's Aerospatiale, and Germany's Deutsche Aerospace. Airbus has been gaining market share on Boeing, especially in the growing market for small planes, and it plans to launch a new super Jumbo, the A3xx, to challenge Boeing's supremacy.

Job security was therefore a crucial area of negotiations. The union gained agreement that the company would not lay off workers if work was contracted out, and a joint negotiating committee to review any contracting-out proposals.

"I wish we could have negotiated better language on job security," said Bill Johnson of the Machinists.

Boeing workers are among the best paid industrial workers in the United States, with basic pay averaging $44,000 (£27,800).

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