Most of Boeing's St. Louis Machinists Eye Voluntary Buyouts: About 1,317 Members Signed Up Before July 31 Deadline

The Wall Street Journal
 By Doug Cameron
Sept. 12, 2014 4:39 p.m. ET


More than half of the Boeing Co.  machinists at its St. Louis fighter-jet plant have signed up to take voluntary buyouts, union leaders said on Friday.

The International Association of Machinists and Aerospace Workers said 1,317 of its 2,300 members at the factory had registered with the company by a July 31 deadline to take the voluntary buyout offer, which was part of a contract extension deal reached in February.

Boeing has been winning record orders for its commercial jetliners, but its F-15, F/A-18 and E/A-18 military jets, all assembled in Missouri, have experienced dwindling demand as military spending shrinks in the U.S. and around the world.

A Boeing spokesman said that not all those signed up would necessarily leave the company, but he declined to say if it has a target number. The union said in a statement that the first 162 retirees would leave the company at the end of the month, with others leaving in stages over the next year. Union officials weren't immediately available for comment.

Boeing has lobbied hard to secure fresh orders from the U.S. Navy for the F/A-18 fighter and E/A-18 electronic attack aircraft. But in the absence of fresh deals from the Pentagon or overseas buyers it has only enough work to last until 2017. The company has said that it may decide by next April whether to close the fighter-jet line.

The St. Louis plant also makes parts for the C-17 military cargo jet. Boeing plans to close its C-17 assembly plant in Long Beach in mid-2015.

Boeing said in February that the new machinists' contract, which runs until July 2022, would enable the company to present more-competitive offers to its government customers for its products and stave off layoffs. Workers at the home to its defense unit in Missouri will shift on January 1, 2016 from a defined-benefit pension to a 401(k)-style retirement plan.

The company took a $80 million noncash charge in its first quarter earnings for the changes to the pension scheme for St. Louis-based workers.

The union's local leadership in Missouri supported the extended contract deal, a significant contrast to last fall's dispute between the Boeing union's largest lodge representing its Puget Sound machinists, and its international leadership, which didn't explicitly oppose the deal.

Boeing secured deep concessions from around 32,000 machinists in the Pacific Northwest in January after bitter negotiations deeply divided the workforce. That ratification provided the company a shift in health care costs and transitions away from a defined benefit pension to a defined contribution 401(k)-style system that takes effect in 2016. In exchange, Boeing promised to build its 350-to-400-seat 777X jetliner and its carbon fiber wings in Washington state.

- Source:  http://online.wsj.com