Boeing Makes Deal With Union on 737s
By LAURENCE ZUCKERMAN -- August 14, 1998
Boeing Co. and its biggest union announced an
agreement Thursday that paves the way for Boeing
to produce the
737 commercial jet at the former McDonnell Douglas
complex in Long Beach, Calif.
But while the deal was designed to allay union fears of
job losses, Boeing also said Thursday that it planned
to cut even more employees than it had indicated last
month.
As part of the deal, Boeing agreed that assembly of
most of the single-aisle jets would remain outside
Seattle and that the major parts, such as the fuselage
and wings, would continue to be produced at their
current locations. The company also pledged that it
would not lay off any union workers as a result of the
move.
It is the first time the International Association of
Machinists, which represents 39,000 Boeing workers, and
the company have a deal apart from the union's regular
four-year contract.
"This is a step into the future," said Bill Johnson,
president of the machinists' local for Boeing. "There
are a lot of issues that when we sit down and work
together everybody can win."
But the deal does not prevent Boeing from following
through on its goal of eliminating between 18,000 and
28,000 of the company's 238,000 jobs by the end of
1999. The company said Thursday that even more cuts
will come after 2000.
Boeing has provided few details about where the initial
job reductions will be made. A Boeing spokesman
declined to elaborate on the additional cuts, saying
that details would not be disclosed until next year.
The new production line will require between 600 and
1,000 workers, saving only a fraction of the 6,200 Long
Beach jobs set to be lost when production of three
McDonnell Douglas models is scheduled to stop in 2000.
Boeing bought McDonnell Douglas last year.
The company also said Thursday that it would further
consolidate the operations of its fighter, satellite,
space transportation, information and communications
and military transport businesses. By the end of the
decade, the moves will reduce the company's overall
office, warehouse and manufacturing space by 21 million
square feet -- three million square feet more than
Boeing first announced in March.
Boeing will begin assembling a few 737s in Long Beach
later this year, bringing the rate up to three a month
by the second quarter of 1999. The agreement with the
machinists caps production at the plant at five planes
a month.
And in a move that is rich with symbolism for the
former McDonnell Douglas employees, Boeing said that it
would drop the remnant of the acquired company's name
and call the complex the Long Beach division. It is now
called the Douglas products division.
Moving production to California will help relieve the
strain at Boeing, which has been struggling to fill
hundreds of orders for the best-selling 737. The
company will use Long Beach to make the most varied
versions of the 737 -- a business version of the jet
and a combination passenger and cargo version
commissioned by the Pentagon -- so that its main
assembly lines outside Seattle can focus on stamping
out similar types for the world's airlines.
Shares of Boeing closed down $1.6875, at $37.1875, on
the New York Stock Exchange Thursday.
Copyright 1998 The New York Times Company |
