WASHINGTON Unionized workers on strike against Lockheed Martin Corp (LMT.N) over healthcare benefits and pensions are prepared for a long work stoppage, a top union official said on Tuesday as the company said it would be able to keep operations running.
Nearly 3,650 union workers walked off the job on Monday at the Fort Worth, Texas, plant where Lockheed builds the new F-35 fighter plane and at two military bases where it is tested.
Paul Black, president of the local chapter of the International Association of Machinists and Aerospace Workers (IAM), said three earlier strikes in 1984, 2000 and 2003 lasted from two to three weeks, and union leaders have warned workers the current dispute could take longer to settle.
"These are pretty big issues. It may take more than just a two- or three-week strike," Black said in a telephone interview. "We're prepared to endure for the duration."
Workers in the union voted overwhelmingly on Sunday to hit the picket line rather than accept the company's "best and final offer," which called for an end to the defined benefits pension that current workers receive and a switch to a retirement account similar to a 401(k).
Black said the pension issue was particularly important given union workers had already given up medical benefits for retired workers in the last contract negotiation.
"Whenever they talk about cuts, they want to talk about the guys at the lower end of the scale," he said, noting the top managers at Lockheed earned a combined total in the hundreds of millions of dollars. "It's not our membership that's driving up the cost of the plane."
The strike adds to pressures already facing the $397 billion F-35 Joint Strike Fighter program, which has been restructured three times in recent years to rein in costs and slow development to allow for more testing. The program has only completed about 20 percent of the total testing required.
"The ball is their court now," Black told Reuters, referring to Lockheed management. "The members spoke loud and clear."
He said he doubted that Lockheed's salaried workers would be able to maintain production of the complex, stealthy warplanes without union employees for long, despite the company's statement that its operations remained open.
The union represents about 3,300 of the total 14,000 employees at the Fort Worth facility, 200 workers at Naval Air Station Patuxent River in Maryland, and 150 workers at Edwards Air Force Base in California.
Lockheed says it offered the union a "fair and equitable contract," including wage increases of 3 percent annually in each of the three years, a $3,000 signing bonus, an annual cost of living supplement of $800 and increased retirement income for current employees.
"No meetings are scheduled at this time. The company's negotiating team would consider meeting with the union if they requested it," said Joe Stout, a Lockheed spokesman.
Stout said Lockheed's operations would remain open and it is implementing a contingency plan where salaried workers with the right certifications and training do the work of union workers, whose jobs include assembly, maintenance and sanitation.
He said Lockheed had identified about 2,200 salaried employees who were available for contingency duty.
"Some have been assigned, some are standing ready for assignments, and some are in training," he said.
Black said those contingency plans had caused problems in past strikes, when union workers had to redo some work after settling the contract dispute.
Lockheed said no mishaps or damage to the planes in assembly had occurred after the start of this strike.
Joe DellaVedova, spokesman for the Pentagon's F-35 program office, said officials were assessing the impact of the strike on development and production, but test flights would continue at Edwards Air Force Base and the Maryland naval air base.
Preliminary flights would also continue at Eglin Air Force Base in Florida, where the military plans to begin training pilots to fly the new planes, he said.
"Our focus remains on moving the program forward and remaining neutral as the parties resolve their contract issues in a mutually beneficial manner," DellaVedova said, adding Pentagon officials hoped the two sides would reach an agreement that "sustains the progress the F-35 production and flight test program has shown over the past year."
Loren Thompson, a defense analyst with the Lexington Institute who has close ties to Lockheed, said the company has been under pressure by the Pentagon to drive down its pension costs on the F-35 program.
(Reporting By Andrea Shalal-Esa; Editing by Steve Orlofsky and John Mair)