Boeing, striking union hold first meeting since latest contract rejection

By David Shepardson

(Reuters) -A union representing about 33,000 striking U.S. West Coast factory workers said late on Tuesday it had met with Boeing (NYSE:) for the first time since members voted down an improved contract offer from the planemaker last week.

The International Association of Machinists and Aerospace Workers Local 751 said with the assistance of Acting U.S. Labor Secretary Julie Su, the union’s bargaining committee “had a productive face-to-face meeting with the company to address key bargaining issues.”

The union, whose members have been on strike for nearly seven weeks, added it “will continue to engage with the company to secure the best possible outcome for our members.”

A Boeing spokesperson confirmed the company met with the union on Tuesday for negotiations, assisted by Su.

Earlier this month, Su had helped the parties restart discussions, ultimately leading to last week’s vote on an offer of a 35% pay rise over four years that was rejected by 64% of union members.

The union has been seeking a 40% pay rise over four years and the return of a defined-benefit pension. Last month, about 95% of workers rejected a 25% pay hike.

Boeing on Monday launched a stock offering that could raise up to $24.3 billion to strengthen finances squeezed by the halt to production of its best-selling 737 MAX and its 767 and 777 widebody programs due to the strike.

SUPPLY CHAIN IMPACT

Earlier on Tuesday, the Republican governors of Utah, Missouri and Montana urged Boeing and the union to end the strike, citing the “far-reaching” impact to their states and the planemaker’s suppliers.

“Boeing has stopped buying from most suppliers, most of whom are now making the very difficult decision to furlough or lay off their own employees,” Governors Spencer Cox, Mike Parson and Greg Gianforte said in the letter to Boeing and the union.

Boeing and IAM declined to comment on the letter.

Ihssane Mounir, senior vice president of global supply chain for Boeing’s commercial airplanes unit, separately told hundreds of suppliers in an email on Tuesday seen by Reuters that the planemaker will need to continue a pause on shipping components for the 737 MAX, 767 and 777 programs.

“We understand this may drive you to take additional and difficult actions for your production schedules as well as for your teams,” Mounir wrote. 

He added: “Our team will be in touch soon and we remain dedicated to continuing to work with you – part by part – to maintain as much stability in our shared production system as we can.”

Boeing’s vast global network of suppliers that produce parts from sprawling modern factories to tiny garage workshops was already stressed by the company’s quality and safety crisis, which began in January after a mid-air panel blow-out on a new Alaska Airlines 737 MAX 9.

Boeing this month announced plans to cut 17,000 jobs globally – or 10% of its workforce – a one-year delay to a key new jet and other cuts.