Boeing machinists approve contract, return to work

SEATTLE (Reuters) - Boeing Co's 27,000 assembly workers voted to approve the company's four-year contract offer on Saturday, ending a strike that has stopped production at the plane maker's Seattle area plants for 57 days.

The International Association of Machinists and Aerospace Workers walked off the job on September 6 after rejecting Boeing's initial offer, demanding better pay and limits on outsourcing. It was the fourth strike in 20 years by Boeing's biggest union.

Nearly three-quarters of the union members voted to approve the new contract and the strike will officially come to an end at midnight PDT.

"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 IAM Aerospace Coordinator Mark Blondin.

Management and the IAM finally reached a compromise on Monday after two months of sporadic talks. Union members will return to work as early as the night shift on Sunday.

Boeing said the first 25 days of the strike cut profit by about $250 million, as it was unable to deliver planes to customers. The whole strike could end up chopping $600 million or more from profit, based on information in Boeing's quarterly earnings last week.

The Chicago-based company has said it will update its financial outlook and set a new timetable for its already-delayed 787 Dreamliner once the strike is over.

PROFIT HIT

Wall Street analysts have abandoned their previous estimates and are now expecting sharply lower profit.

The stoppage, which will have lasted 58 days when full shifts resume on Monday, is the longest strike at the plane maker's plants in 13 years. The union walked out for 28 days in 2005, 69 days in 1995 and 48 days in 1989. That means 203 days of production lost over the past two decades.

The agreement, struck late on Monday after five days of talks with a federal mediator, gives IAM members a 15 percent pay raise over the four-year life of the contract and allows the union more scope for challenging Boeing's use of outside contractors.

The IAM had initially wanted a 13 percent pay raise over three years and to rewrite certain language in the contract relating to outsourcing.

The breakthrough during the negotiations was Boeing's willingness to give ground on the issue of job security, union officials said.

"People are tired of being out of work," said Don Icenogle, 45, an inspector at Boeing's Seattle developmental center, who voted for the contract.

Boeing is now in contract talks with the Society of Professional Engineering Employees in Aerospace, which represents more than 20,000 white-collar engineering workers. Their contract expires December 1.

The company's shares jumped earlier this week after management and the union agreed to the new contract, but are still down 40 percent this year, hurt by the broad decline in the market and worries about the strike, declining orders and delays on the 787.

The stock hit a 4-1/2 year low of $39.99 on October 16.

(Additional reporting by Bill Rigby in New York; Editing by Eric Beech)