Boeing Engineers Approve Deal as Strike by Others Planned

Boeing Co. engineers and technical workers split their votes over a new contract, potentially averting a dispute that threatened to disrupt efforts to fix the battery faults that grounded the global 787 Dreamliner fleet.

Engineers approved a four-year contract while technical workers, who act as their liaison with machinists, rejected the deal and authorized a strike any time, according to the Society of Professional Engineering Employees in Aerospace. The union said it will first resume negotiations with the planemaker.

The divided results show labor peace remains elusive even as Chicago-based Boeing counts on its workforce to help get the Dreamliner flying again. Boeing is working to find the source of two battery malfunctions and make repairs to put the fleet of 49 787s back in the air and resume deliveries of new planes.

“In an engineering company, what’s vital is good relations with the engineers,” Harley Shaiken, a labor professor at the University of California at Berkeley, said in an interview before the voting. “You want people inspired by what they’re doing, not at odds with the company management.”

Boeing’s contract offer was ratified by engineers with 54 percent of the vote, the union said, while the accord was turned down by 53 percent of the technical workers. Those employees authorized a strike with 64 percent of the vote.

Photographer: Andrew Harrer/Bloomberg

A JetBlue Airways Corp. airplane takes off past a Boeing Co. 787 Dreamliner on display during its global Dream Tour at Reagan National Airport in Washington, D.C. Close

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Photographer: Andrew Harrer/Bloomberg

A JetBlue Airways Corp. airplane takes off past a Boeing Co. 787 Dreamliner on display during its global Dream Tour at Reagan National Airport in Washington, D.C.

‘Deeply Disappointed’

The shares rose 0.2 percent to $74.78 at the close in New York. Boeing officials will meet with the U.S. Federal Aviation Administration on Feb. 22 to propose fixes to ensure that the 787’s battery won’t damage the plane or emit smoke, people with knowledge of the talks said.

The 15,550 engineers and 7,400 technical workers, mainly at Boeing’s Seattle-area manufacturing and development hub, had been working without a contract since November. They’re pivotal to Boeing’s efforts to fix the 787 and boost jet production to a record this year.

Boeing is “deeply disappointed” that technical employees rejected the company’s offer and authorized a strike, the company said in an e-mailed statement.

“The realities of the market require us to make changes so we can invest in new products and keep winning in this competitive environment,” said Ray Conner, chief executive officer of Boeing’s commercial planes division.

The union had said Boeing’s offer would cut retirement benefits for new hires by about 40 percent, divide the workforce and lead to the elimination of the pension entirely in favor of a 401(k)-style plan that’s riskier for employees.

Labor Strife

Voting by the engineers signaled the depth of the divide between their union and management: 56 percent of the members supported a strike authorization, a tally that was moot since they also approved the new contract.

Boeing engineers and government agencies in the U.S. and Japan are still investigating two battery faults last month that led to a fire in one 787 and an emergency landing by another. The FAA ordered the planes grounded on Jan. 16 and was followed by regulators worldwide.

“The techs are constructing the containment vessel around the battery that they’re trying to get the FAA to buy off on,” Speea Executive Director Ray Goforth said in an interview after the voting. “If the techs go out on strike, it would stop all production of commercial aircraft.”

Boeing had delivered 49 Dreamliners since the model’s entry into service in late 2011 and is still building five a month. It’s working toward doubling output by year’s end to fill a backlog of more than 800 orders. Deliveries halted after the 787s were ordered parked.

“Once a fix is approved, then that’s our work, to incorporate the changes into the existing airplanes as well as the engineering and planning to incorporate the change in the production airplanes,” Speea President Tom McCarty said in an interview. “That actually takes a lot more than the 300 people who may now be investigating the problem and how to correct it. We are the workforce that will do that.”

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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