x Abu Dhabi, UAEWednesday 26 July 2017

Boeing strike ends bringing relief to Gulf airlines

Boeing's 27,000 machinists on Saturday voted to endorse a new four-year labour contract.

Boeing machinists Heather Barstow and Paul Knebel hug each other after the union voted to accept the plane maker's four-year offer.
Boeing machinists Heather Barstow and Paul Knebel hug each other after the union voted to accept the plane maker's four-year offer.

Boeing's 27,000 union machinists voted to endorse a new four-year labour contract on Saturday, bringing an end to a two-month long strike that had stalled deliveries to the fast-expanding Gulf airlines. The new contract for the International Association of Machinists and Aerospace Workers (IAM) provides stronger job security, pensions and health care. Workers walked out on Sept 6, leaving at least five aircraft in various stages of assembly destined for Emirates Airline and Qatar Airways stranded, forcing them to push back expansion plans. "This new contract addresses the union's job security issues while enabling Boeing to retain the flexibility needed to run the business," said Scott Carson, the president and chief executive of Boeing's commercial aeroplane division. "We're looking forward to having our team back together to resume the work of building aeroplanes for our customers." Gulf airlines are major customers of the US plane maker and feature as a disproportionately large part of the company's global revenues. Boeing's latest-generation long-range aircraft, the 777 and 787 Dreamliner, have been ordered by Dubai-based Emirates, Etihad Airways of Abu Dhabi, Bahrain-based Gulf Air and Qatar Airways. FlyDubai, the new budget carrier being launched next year by the Dubai Government, recently placed a US$4 billion (Dh14.68bn) order for 50 single-aisle, 737-800 aircraft from Boeing. "As one of Boeing's largest customers for the 777, with another 42 of these aircraft on order, we are naturally glad to hear that the strike has ended," an Emirates Airline spokeswoman said. The stalled deliveries had forced Emirates to delay the launch and scale back the frequencies of its two new routes to Los Angeles and San Francisco. Emirates is expected to make an announcement soon on when it will increase the number of flights to the Californian cities to seven a week. The labour dispute centred on Boeing workers' fight to preserve job security at a time when the manufacturer expands its reliance on foreign suppliers. With Boeing engaged in a bitter battle with European rival Airbus, it has sought to tap into the global supply chain to become more efficient and cut costs. Its newest aircraft, the 787 Dreamliner, is assembled only at Boeing factories in Washington state, with firms from Italy, Japan and around the world completing the preliminary states of construction. The agreement, struck after five days of talks with a US government mediator, gives union members a 15 per cent pay raise over the four-year life of the contract and allows the union more scope for challenging Boeing's use of outside contractors. "We locked in pension. We locked in health care and there is not a lot of people in this country right now that can say that," said Mark Blondin, a union spokesman, after 74 per cent of union members voted in favour of the new contract. Workers were scheduled to return to the floor last night, ending a 58-day walkout - the longest Boeing union strike in 13 years. The union walked out for 28 days in 2005, 69 days in 1995 and 48 days in 1989 - or 203 production days over the past two decades. The latest strike, coming at a time of deep concerns over the state of the global financial system, helped drag down Boeing shares to a four-year low, to $41.80. Its shares jumped earlier this week after management and the union tentatively agreed to the new contract, but are still down 40 per cent for the year, hurt by the broad decline in the market and worries about the strike, declining orders and delays on the 787. * with Reuters igale@thenational.ae