June 24, 2010

Spirit offers Machinists 10-year contract

Spirit AeroSystems promises to keep major manufacturing operations in Wichita for the life of a 10-year contract proposal should union members ratify it on Friday.

Spirit AeroSystems promises to keep major manufacturing operations in Wichita for the life of a 10-year contract proposal should union members ratify it on Friday.

"It's got the strongest job security language in the industry," Machinists spokesman Bob Wood said Wednesday.

"This is an important thing for our city."

But whether it will be enough to avert a strike is unknown.

Tensions are high on the shop floor, said some workers, who got their first look at the proposed contract Wednesday. Union members will vote on the contract Friday.

"It's not going to fly," predicted Tom Ray, a Spirit composites mechanic. "It's not good."

The length of the contract, amount of wage increases and higher health care costs are sticking points, some said.

Terry Rodriguez said he'll vote in favor of it.

"Job security means a lot, especially in this line of business," Rodriguez said, especially at a time when other Wichita aircraft companies are outsourcing. Job security was the union's top issue during negotiations.

The wage he has now, he said, "is better than not having a job."

Roger Stambeck, a Spirit machinist, said he was reserving judgment until he reads the entire contract and talks with negotiators.

"I've got some questions for them to find out about the length of the contract and the reasons why they went so long," Stambeck said.

Members vote Friday at Century II on whether to accept the offer. Polls are open from 7 a.m. to 5 p.m. A meeting and explanation of the contract begins at 11 a.m.

Ratification of the contract requires a majority vote; if the contract is rejected, a strike would require a two-thirds majority. If enough union members vote to strike, a work stoppage would begin at 12:01 a.m. Saturday.

The union represents about 6,000 hourly workers at Spirit's plant in Wichita.

Union officials call the agreement monumental and say they hope it will serve as a model in future negotiations with other companies. It will provide 10 years of stability, known costs for the company and more opportunity, they said.

Spirit AeroSystems spokesman Ken Evans said the negotiations were about creating a partnership to keep the company healthy and its team intact.

"We're on the same team fighting for the same things," he said. "Those include job security, the opportunity to share rewards, stability and a long-term agreement."

One aerospace analyst said the long duration of the contract would bring security to Spirit because costs would be predictable. That would make Wichita more competitive when Spirit bids on new work, he said.

Eliminating the risk of labor unrest and a strike would also help because potential customers wouldn't have to worry that their parts shipments would be delayed by a work stoppage, experts say.

Some of the agreement's highlights include:

* Flexibility to implement temporary furloughs, alternative work schedules, additional training, insourcing and short work weeks as a way to prevent layoffs, should customer demand change

* 1 percent wage increases in four of the 10 years of the contract

* Improvements in cost-of-living adjustments

* Incentive awards based on the same criteria as Spirit management

* Cash payments based on reduction of scrap and rework

* Long-term incentives of 150 shares of Spirit stock in the contract's first year and lump-sum cash payments in five additional years

* Enhanced health care plan with the addition of a zero-cost plan; employees' share of the costs increase from 10 to 20 percent over the life of the contract

* An early retirement option

* Increases in pensions and life insurance

* Alternative work weeks for certain areas

* A lifetime of recall rights and seniority after a layoff

* A successor clause that keeps the contract in place should the company be sold.

According to the contract, programs produced in the Wichita plants by Machinists would continue to be performed by the union, unless work must shift to make room for a new or expanded programs.

Should the company consider outsourcing work, the union can present an alternative business case, the contract says.

Under the scenario, Spirit must consider the maintenance of a "strong, highly-skilled work force in Wichita," consistent with the intent of the contract when it makes its decision.

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