Boeing machinists strike; several satellite launches could be delayed

LOS ANGELES -- Boeing Co. officials have not yet decided whether to scrub upcoming satellite launches or hire replacement workers after machinists went on strike in California, Alabama and Florida, a company spokesman said Wednesday.

About 1,500 workers joined the walkout that began at 12:01 a.m. after last-minute talks broke down between their union and Boeing's Integrated Defense Systems unit that operates the Delta rocket program.

A federal mediator was unable to broker an agreement. No new talks were scheduled. The unit services mainly NASA and the Air Force.

Chicago-based Boeing was reviewing contingency plans and talking to customers, company spokesman Dan Beck said.

"It's too early for us to make a decision as to whether launches are going to be delayed," he said.

A union representative said three Delta rockets were on launch pads, two in California and one at Cape Canaveral, with the earliest launch scheduled for Nov. 15.

"They're not going to launch any more Delta rockets," said Gary Quick, chairman of the union's negotiating committee.

The machinists said Boeing had proposed ending retirement health-care coverage for new employees and eliminating caps on out-of-pocket expenses for medical premiums and copays.

The workers argue that they should not be making concessions when the company posted $1 billion in net income for the last quarter.

Beck said the company's offer would have given workers substantial pay increases and boosted pensions and savings plans.

Similar issues led to a four-week shutdown of Boeing's commercial aircraft assembly operations in the Pacific Northwest and Wichita, Kan., in September.

However, it's unlikely that Boeing's military clients will exert the same pressure as its commercial clients did to quickly settle the previous strike, said Paul Nisbet, an analyst with JSA Research.

"The government is unlikely to penalize Boeing in any way for any slippage of schedules," he said. "The government is quite tolerant of labor strikes. It's very different than the airlines."

And unlike the commercial aircraft business, the satellite launching business is a tiny part of Boeing's overall operations, Nisbet said.

"It's part of their business that doesn't make much money," he said. "It will have very little impact."

Shares of the company fell 35 cents to close at $64.70 in trading on the New York Stock Exchange.

About 280 workers picketed at three locations around the Cape Canaveral Air Station and Kennedy Space Center in Florida, carrying signs that read "On Strike" in red letters.

Picketers were also out in force in Huntington Beach, Calif., where Boeing's Delta rocket program is based.

Strikers said they would stay out as long as it takes.

"We don't want to be out here," said Johnny Walker, a business representative for district lodge 166 in Florida. "We don't want to hurt the program ... but the ball is in their court. They have the power to settle."

Two weeks ago, locals with the International Association of Machinists and Aerospace Workers in California, Alabama and Florida, rejected Boeing's latest offer for a three-year contract.

The current agreement expired Oct. 23. It covers about 900 workers in Huntington Beach, Torrance, Vandenberg and Edwards Air Force Base in California; about 300 workers at Cape Canaveral in Florida; and about 300 workers at Boeing facilities in Huntsville and Decatur, Ala.