SPEEA e-mail: Spirit strike likely
08/09/2011 12:00 AM
08/08/2014 10:04 AM
The price drop of Spirit AeroSystems stock on Friday may have been caused in part by an e-mail from the company's professional and technical union to Wall Street investors saying the company was on the "verge of a strike that would shut down operations there."
Spirit stock opened at $18.24 Friday, but by the closing bell had declined to $16.90.
Monday, Spirit stock fell 9.9 percent as the Dow fell more than 600 points. Spirit closed at a 52-week low of $15.23. In the past 52 weeks, Spirit has traded as high as $26.49.
Members of the Society of Professional Engineering Employees in Aerospace rejected the company's 9 1/2-year contract offer last month in a near unanimous vote. SPEEA represents 2,300 professional and technical workers in Wichita.
The Wall Street e-mail was signed by SPEEA executive director Ray Goforth, who is based in Seattle.
In the e-mail, Goforth said that Spirit failed to mention it's on the verge of a strike "that would largely shut down operations there and hamper operations at the North Carolina and Scotland facilities. This struck me as a material omission that you would want to be aware of."
Cowen and Co. analyst Cai von Rumohr responded Monday to SPEEA's e-mail and Spirit's stock price decline in an analyst note entitled "Friday Selloff Looks Overblown."
A strike isn't imminent because SPEEA did not include a strike authorization vote on the ballot giving union officials the authority to call one.
"While Mr. Goforth appears militant, the union hasn't authorized a strike and has never gone out on strike (in Wichita)," von Rumohr said in the analyst report.
On Monday, Goforth said the union will "ratchet up the pressure" if the company fails to return to the bargaining table. He said the union already has been contacting suppliers and customers.
It also can refuse to work overtime, do informational picketing and implement "work to rule," in which employees work to the strictest interpretation of their job rules, which slows down work, Goforth said.
"Then eventually people would be asked to go on a strike," Goforth said. "If the company refuses to negotiate with the union, then a strike certainly before the third-quarter earnings call seems likely."
Spirit spokeswoman Debbie Gann said the company is "always prepared... to consider any proposals the union wants to make."
"We remain committed to an outcome that keeps our company healthy and the team for the future intact," she said. "Throughout the negotiating process, the Spirit team has worked incredibly hard to forge a mutually beneficial model that shares risks and rewards with employees.
"Our goal is to find agreement on a fair and competitive contract. Messages that focus on threats and scare tactics distract from what should be the shared objective of securing a long-term agreement we can all support."
Wichita State University economics professor Martin Perline called SPEEA's tactics — and the company's lack of movement to return to the bargaining table —"part of the game that's played."
For workers, it's not a good time to strike, he said.
"At some time, the company's going to have to go back to the table," Perline said.
SPEEA members said they rejected Spirit's contract offer because it capped salary pools, offered no wage guarantees and no cost-of-living increases and included a lower bonus plan than that for other salaried officials.
It also increased health insurance costs from 10 percent of the cost to 20 percent by the end of the contract. Many also opposed the contract's length.
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