Union workers using their power
By Tim Klass
Associated Press
SEATTLE — On picket lines in Seattle and production lines in Pittsburgh, union workers are showing no fear in demanding a hefty chunk of the profits from Boeing Co. and United States Steel Corp., whose businesses have soared above the more widespread economic downdrafts in other sectors.
On Tuesday the United Steelworkers union ratified a four-year contract their chief negotiator, Tom Conway, touted as the best in the nation's steel industry in 30 years. The deal provides a $6,000 cash payment, a retroactive $1 an hour pay increase to Sept. 1, and 4 percent wage increases in each of the next three years, among other things.
And on Sept. 6 the Machinists union shut down Boeing's lucrative aircraft assembly plants after rejecting a 3-year contract offer containing bonuses averaging $6,400, pay raises averaging 11 percent, pension increases and a 3 percent cost-of-living adjustment — $34,000 in average pay and benefit gains, by company estimates.
Moreover, the strike vote was a whopping 87 percent, compared with a 78 percent strike vote that preceded a 69-day walkout at Boeing in 1995, when the Machinists represented even more workers at the company.
Financial analysts and some within labor's ranks question whether demands for more money across the board and stronger job security are reasonable or realistic, but Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, and chief negotiator Mark Blondin say Boeing can well afford it.
Boeing reported $4.1 billion in profit last year, an 84 percent increase over 2006, and has about a seven-year order backlog, helped by strong exports.
A good deal for the Machinists — financially and in outsource-limiting provisions — will promote a rising tide to float other labor boats, Blondin and Buffenbarger said.
"It raises the bar in the community," Blondin said. It's going to help everybody in this community, if not the country."
He said he hears plenty from other labor leaders about the rich deal the Machinists already have at Boeing, making an average of $27 an hour or about $56,000 a year before overtime and incentives, but added that in the strike "I've had nothing but encouragement from other unions."
Gains at Boeing may even "bleed over into airlines," where the Machinists have been hard hit by mergers and the fiscal pinch of soaring fuel costs, Buffenbarger said.
Unlike the vast majority of U.S. unions, the Machinists hold a heavy hammer at Boeing. Because of the wide range of highly skilled and specialized positions they fill, the company cannot make airplanes without them or find enough available and qualified replacements.
"This is America's last successful major heavy industry," said Richard Aboulafia, vice president and analyst for the Teal Group in Fairfax, Va. "As a result, the workers have a lot more power ... and they're taking advantage of that power."
Last year, 12.1 percent of U.S. workers belonged to a union and 13.3 percent were covered by union contracts, according to the U.S. Bureau of Labor Statistics. In the private sector the figures for 2007 were 7.5 percent members and 8.2 percent represented.
Peter Morici, an international business professor at the Robert H. Smith School of Business at the University of Maryland, said there was little likelihood the actions of the Machinists would carry over to affect inflation or other economics trends.
Meanwhile, the United Steelworkers have also bargained hard and won a contract with United States Steel that impressed experts.
Charles Bradford, an analyst with Bradford Research/Soleil Securities, said: "On a very basic level, the company's making a lot of money. The employees have gotten very good profit sharing and bonuses."