Boeing machinists may find peace starts with Kansas company

Boeing Co., the target of four machinist strikes in two decades, may find the road to labor peace starts in Kansas, where a supplier and the union are working on a contract they say may set an industry blueprint.

Spirit AeroSystems Holdings Inc. Chief Executive Officer Jeff Turner and Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, started meeting in January to lay the framework for longer accords that protect workers while giving companies flexibility in changing markets.

One goal as formal negotiations begin today in Wichita is to reduce rancor farther up the chain at former parent Boeing, Spirit's biggest customer and the IAM's largest employer. Spirit profit was hurt by the last Boeing strike in 2008 and the union is smarting from the planemaker's decision last year to build a 787 Dreamliner plant at a non-union site in South Carolina.

"Boeing's always telling them, 'What we need are reliable suppliers,'" Buffenbarger said in an interview. "This could turn the question around where the suppliers say to Boeing, 'What we need is a reliable customer.'"

Buffenbarger, 59, says he wants to see a model agreement reached with Spirit and then followed by other suppliers and aerospace companies whose contracts are coming up for renewal, such as Textron Inc.'s Cessna. That may then steer Boeing into productive talks rather than waging "war on their workers" when the current contract expires in 2012, he said.

Tim Healy, a spokesman for Chicago-based Boeing on labor issues, declined to comment. The company trails only Toulouse, France-based Airbus SAS in commercial-plane making.

Talks Start Today"It's premature to speculate on whether this approach could work because there are so many gray areas attached with production and where planes will even be built," said Michel Merluzeau, an aerospace analyst with G2 Solutions in Seattle.Neither union leaders nor Spirit officials would specify what their side will seek in talks that start today with a press conference scheduled to include Buffenbarger, Turner and Spirit board member Richard Gephardt, the Missouri Democrat who is a former U.S. House of Representatives majority leader. The IAM's contract covering about 5,900 Spirit workers ends June 25."In a market that's so volatile, a classical set of negotiations is going to set us up to butt heads," Spirit CEO Turner said in an interview.If the company has a pessimistic view of the business and tries to win concessions that turn out to have been unnecessary, it breeds distrust, Turner said. On the other hand, an unforeseen slump when wages and job levels are locked in could ruin the company, he said.Starting With Spirit"We're going to embark on a whole new model of labor negotiations" instead of "still negotiating like it's the 1930s," said Ron Eldridge, who leads the IAM's effort.The IAM says it's trying to build the new contract model with Spirit because they already have a close relationship. CEO Turner and the union's Buffenbarger showed up together to discuss goals at a January training session for IAM negotiators in Maryland, and the pair met yesterday with shop stewards and managers in Wichita to explain each side's needs ahead of talks.Spirit, which was formed in 2005 when Boeing sold its commercial operations in Wichita, makes parts of the fuselage and other sections for every Boeing airliner. The supplier received 85 percent of its revenue from the former parent in 2009 and 11 percent from Airbus, regulatory filings show.Since the beginning of 2009, Spirit shares more than doubled to close yesterday at $22.63 in New York Stock Exchange composite trading, while Boeing rose 69 percent to $71.91.Negotiating GoalsBoth sides are entering talks with the same ultimate goal, Turner said: "To keep our company healthy and keep our team intact for the future." Spirit needs an experienced, consistent workforce to succeed with complex aircraft-development programs and can't tolerate cycles of layoffs or strikes, he said.The IAM's offer last year to extend Boeing's four-year contract covering 27,000 workers by an additional eight years gives some sense of the timeframe the union might consider, negotiator Eldridge said. The offer was part of the IAM's unsuccessful effort to have the company build the new 787 line at its Seattle-area factory hub instead of in South Carolina.Boeing at the time said the union's offer, which included raises of 3 percent a year through 2020 and work guarantees, was too expensive amid burgeoning competition from countries such as China and Canada.The union's 57-day strike at the end of 2008 cost Boeing more than $10 million a day and incurred the ire of customers whose planes were delayed and suppliers who had to scale back their own production until Boeing's assembly lines restarted. It also coincided with the start of a global recession that prompted the deferral and cancellation of hundreds of orders from Boeing as well as business-jet makers such as Cessna, which had to cut its Wichita workforce in half."A three-year contract where everything is nailed down and can't change -- that's got to go," CEO Turner said. "But it can't be replaced with nothing. So we want to create a longer contract that's flexible."