Boeing workers strike

Boeing's 18,300 machinists went on strike for the first time in 10 years after rejecting the company's wage and benefit offer, shutting down production at the world's biggest aircraft maker.

The strike was approved by 86 per cent of its membership, International Association of Machinists and Aerospace Workers spokeswoman Connie Kelliher said from Seattle.

Union leaders urged the machinists to reject the offer, insisting that Chicago-based Boeing can afford to spend more on employee benefits because aircraft orders are rising.

Boeing said this week that the walkout may cause delivery delays that would give rival Airbus an advantage in its marketing campaigns for new jet sales.

"While a strike of a couple of weeks might be do-able, some kind of accommodation would have to be reached," said Richard Aboulafia, an aerospace analyst at Fairfax, Virginia-based Teal Group.

"If Boeing does cave and give them something like what they want, it will be a bit of a hollow victory because in the long run it will probably result in increased outsourcing."

The strike includes workers in Seattle, Portland, Oregon, and Wichita, Kansas, with most located in the Seattle area, Boeing's original home. The company moved to Chicago in 2001.

The strike is the first against Boeing since engineers walked off the job in 2000. Boeing machinists last went on strike in 1995, when they were out for 69 days.

Boeing's shares dropped as much as 32 per cent in 2000, when the 19,000 engineers staged one of the largest white-collar walkouts in US history.

Shares of Boeing fell US$1.03 to US$65.99 yesterday in New York Stock Exchange composite trading. They have risen 27 per cent this year.

"We don't intend to assemble airplanes during this strike, yet we will continue focusing on support for our customers and their in-service fleets," Boeing spokesman Charles Bickers said in an e-mailed statement.

Boeing had offered workers four health-care plans, with premiums costing between US$20 and US$210 a month for families and between nothing and US$70 a month for individuals, depending on plan choice. Workers enrolled in a preventive-health programme will get a US$20 monthly discount.

Boeing machinists, who build and assemble plane parts, had 94.5 per cent of their monthly health-care premiums paid for by the company under the old contract that expired at midnight Thursday, according to Boeing.

The company paid US$1.7 billion in total health-care costs last year.

- BLOOMBERG