NEW YORK Saying a strike now appears likely, the union representing Boeing Co's (BA.N) 23,000 engineers held picket-line training this week to prepare for a work stoppage that could disrupt billions of dollars worth of plane deliveries and help Airbus catch up to Boeing on jet designs.
The preparations come after federal mediators suspended talks between Boeing and the Society of Professional Engineering Employees in Aerospace on Wednesday, after two days.
"I think the likelihood of a strike is very high," Ray Goforth, executive director of SPEEA, said Friday.
The union has not called for a vote to authorize a strike and said it would not stage a walkout until January at the earliest because Boeing closes its factories for the last week of December.
Bargaining began in April to replace contracts for engineers and technical workers, mostly at Boeing's factories near Seattle.
There is scope for the sides to reach a deal, since talks with the mediator are due to resume in January.
But the friction is rising between Boeing and its white-collar engineers, who design the jets and work closely with machinists to build them.
Last week, Boeing said the sides remain far apart on terms and called in the Federal Mediation and Conciliation Service, a Washington, D.C., agency that facilitate labor talks.
That process ended abruptly Wednesday when the two mediators who attended the meetings in Seattle suspended the talks.
"My guess is that after spending two days with us, they realized that no deal was going to be possible and that we were about to plunge into crisis," Goforth said.
He said that if Boeing had made another offer and left the table, the union would have responded by calling for a strike vote.
"FMCS pushed the pause button to stop that from happening," he said.
Boeing spokesman Doug Alder said the company "remains committed to reaching an agreement as soon as possible."
Boeing upped its offer last month but was surprised when SPEEA did not move toward compromise, he said. Instead of cutting its proposal, SPEEA asked for higher raises.
Boeing has offered a four-year contract with raises of 4 percent to 4.5 percent each year for SPEEA engineers and 3 percent to 3.5 percent for technicians. The workers got 5 percent raises in the contract that expired last month, and they have since asked for 6 percent annual.
"We're trying to keep our employees at the top of the market, but not so far above it that we can't attract work," Boeing spokesman Alder said. "We need SPEEA's team engaged in the process starting from the first day we're back at the table."
The union says Boeing's current offer would cut retirement benefits 40 percent and salary growth 22 percent while raising medical costs 12 percent.
SPEEA has struck twice before: a one-day walkout in 1993, and a 40-day stoppage in 2000. Both actions occurred early in the year and after talks with a mediator had failed to produce a labor agreement.
If they walked out, SPEEA's engineers and technical workers could stop production of 52 jets a month, worth nearly $8 billion at list prices.
The standoff has the potential to affect Boeing's production even if the union doesn't call a strike, as engineers could work more slowly and refuse overtime. The union has asked them to do so, but Boeing said there is no sign of slowdown.
Earlier this month, SPEEA said some workers had sought to hold a wildcat strike on Wednesday, and the union urged them not to. Boeing said there was no sign of increased absence.
Analysts say any shutdown in Boeing jet deliveries would help rival Airbus catch up on competing jets. Airlines are clamoring for the new planes because the fuel savings they offer is crucial as oil prices rise.
An engineer walkout also could affect design work on next-generation jets. Boeing has design projects in the works for the 737 MAX, the 767 Tanker and 787-9, and is planning two more, for the 777-X and 787-10X.
Goforth said SPEEA held training on Wednesday and Thursday for about 150 "captains" who would coordinate several dozen picket lines blocking entrances to Boeing facilities in Washington, Oregon, Utah and California.
Picket captains schedule workers to staff the sites, and also arrange for food, port a-potties, safety and security, he said. He also said the union had drawn up a budget and has money to support a 60-day strike.
(Reporting by Alwyn Scott; Editing by Kenneth Barry)