Lockheed F-35 workers ready for long strike, union says
By Andrea Shalal-Esa, Reuters, Tuesday, April 24, 2012
WASHINGTON (Reuters) – Unionized workers on strike against Lockheed Martin Corp 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.
Contingency plan
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.
Could a Union Strike Ground the Pentagon’s New Jet?
By Adam Weinstein, Mother Jones, April 23, 2012
The union builders of one of the Pentagon’s priciest pieces of equipment are going on strike, threatening the beleaguered trillion-dollar program and the Beltway contractors who are counting on it.
Last Sunday, workers at Lockheed Martin’s Fort Worth, Texas, construction plant voted by more than a 9-to-1 margins to strike for better conditions. The plant’s 3,600 union machinists handle most of the parts and assembly for the F-35 Joint Strike Fighter, an over-budget, under-performing, behind-schedule fighter jet that’s on record as one of the biggest wastes of money in Pentagon history.
At 12:01 a.m. this morning, members of the International Association of Machinists and Aerospace Workers Local 776 walked off the job. At issue was Lockheed’s proposal to slash pensions and health-care programs for new hires and rehired machinists. “But there are other things that are still open on the table that are unacceptable,” union president Paul Black told MSNBC. Workers are ready for a lengthy work stoppage, according to the Ft. Worth Star-Telegram:
Nick Hight, an 8-year Lockheed employee, said he was willing to strike for weeks if necessary over the pension issue. “No pension for new hires, that’s not good. What if my granddaughter wanted to work here.”
“They keep taking things away from us,” said Kim Nguyen, an aircraft assembler who has worked 15 years at the Lockheed plant. “They’ve gotten too greedy. We’ve got to fight for something.”
It’s not like the laborers are trying to get blood from a stone: Thanks largely to the F-35 program, Lockheed is the single biggest defense contractor in the United States, with $17.34 billion in federal projects per year—more than “Beltway bandits” KBR, Boeing, and General Dynamics combined. So far, Lockheed’s made $400 billion off the F-35, despite cost overruns and concerns over the craft’s airworthiness that have delayed its delivery for service, first slated for 2010.
A spokesman for Lockheed only told the Star-Telegram that the company considered its final offer to the workers “equitable,” since its equally profitable competitors “no longer offer defined benefit pension plans to new hires.” In contrast, Lockheed CEO Robert Stevens made $25.4 million last year, including a $4.7 million bonus—a 16 percent increase over his 2010 compensation, even though company earnings fell 8 percent in the same period, according to SEC filings. Of course, as my colleague Josh Harkinson has reported, some of America’s most successful CEOs have always gotten rich by squeezing workers. But defense contractors rarely get the same scrutiny as bank, insurance, and retail executives.
Could a lengthy strike further delay the F-35? Maybe; Lockheed reports no effects on its assembly line so far, though it has notified the military services that there could be problems delivering the jets on time. But with conservatives on a renewed hunt for communists and the House Armed Services Committee meeting this week to discuss the annual defense budget, expect Republicans to defend their No. 1 private contractor while tossing a couple of barbs at those “unpatriotic” union workers down in Texas.
Lockheed machinists vote overwhelmingly to strike
By Bob Cox, Fort Worth Star-Telegram (Texas), April 22, 2012
Aircraft manufacturing workers at Lockheed Martin overwhelmingly rejected the company’s final contract offer Sunday and voted to go on strike. Machinists’ union members voted by greater than 9-to-1 margins in separate ballots to both reject Lockheed’s final contract proposal and to strike.
Workers interviewed after the strike repeatedly cited their opposition to company proposals that would eliminate a defined benefit pension plan for new hires and reduce the number of health care plan options to just one HMO and a plan that features higher employee deductibles and co-payments.
Nick Hight, an 8-year Lockheed employee, said he was willing to strike for weeks if necessary over the pension issue. “No pension for new hires, that’s not good. What if my granddaughter wanted to work here.”
“They keep taking things away from us,” said Kim Nguyen, an aircraft assembler who has worked 15 years at the Lockheed plant. “They’ve gotten too greedy. We’ve got to fight for something.”
The strike by members of Machinists Local 776 is set to begin at 12:01 a.m. Monday. Union members said they are prepared for a long walkout if necessary.
The union represents about 3,600 workers at the west Fort Worth Lockheed plant that do most of the aircraft assembly and manufacturing work on the F-35 and F-16 fighter jets or service the machines and facilities.
Paul Black, president of Machinists Lodge 776 in Fort Worth, said the vote against the contract proposal was stronger than he had dared to hope for. “I’m very proud of my membership. They stood against the company and its attempt to take away good quality health care. And they stood against taking away the pension.”
Lockheed spokesman Joe Stout defended the company’s proposal. “We believe our offer included terms that constituted a fair and equitable contract for the IAM members, 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, increased retirement income for current employees, and various other improvements,” Stout said.
“We’re disappointed that the IAM members rejected the company’s last, best and final offer and voted to strike. Our operations will remain open and we will implement our contingency plan while focusing on meeting our commitments to our customers.”
It’s not clear what effect a strike would have on Lockheed’s production, especially on the troubled F-35 program. The next generation combat aircraft has been under increased Pentagon and congressional scrutiny because of years of delays in development, testing and production and huge cost increases.
Lockheed sent letters to key government program managers and contracting officers on Thursday informing them of the possibility of a work stoppage, Stout said.
Key details of the proposed contract
* Three annual 3 percent wage increases. The first-year wage scale under the proposal would run from $10.06 per hour for the least experienced, least skilled positions to $34.59 per hour at the top end.
* A contract ratification bonus of $3,000.
* An $800 annual cost-of-living lump sum payment.
* The pension multiplier would increase from $79 to $90 per year of service for current employees.
* New hires and rehired employees would be put in a defined contribution savings plan with guaranteed quarterly payments of $350 by the company.
* The Aetna HMO would be retained, with employees paying 13 percent of premiums. There would be no cap on annual premium contribution increases, unlike in the current plan.
* The company would replace existing preferred provider health plans with LM Health Works, which emphasizes wellness and prevention benefits.
Footnote: In Seattle, a major aerospace and IAM town, the daily newspaper has not reported on the strike at Lockheed Martin. However, today’s Seattle Times does report on another aircraft “strike.” A Jet Blue aircraft had to make an emergency landing in New York after a “bird strike.”
