Union members reject Onex deal at Boeing's Wichita plant

Airline Industry Information, May 26, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Members of the International Association of Machinists and Aerospace Workers at Boeing Co's commercial aircraft division in Wichita, Kansas have rejected a proposed labour agreement.

The proposal was made by the potential buyer of the plant, Onex Corp. Onex has reportedly said that the agreement is vital to the acquisition of the plant. The proposal was rejected by 57% of the members, according to The Associated Press. No information has been disclosed on how many of the union's members at the plant actually voted. The managing director of Onex, Nigel Wright, said that he was disappointed with the result. The plant reportedly employs about 7,200 people while the union represents about 5,300. An estimated 70% of these 5,300 are union members.

The union members have reportedly been critical towards the proposal, which called for an initial wage cut of 10% as well as higher health insurance costs. It also provides for general pay increases during three-year contract period, with performance bonuses that are tied to financial targets, giving each employee 1,000 shares of company stock that would be paid out during certain circumstances, The Associated Press said.

The deal for Onex to acquire Boeing's commercial aircraft plant in Wichita, as well as other sites in Tulsa and McAlester, Oklahoma, for USD900m in cash and the assumption of USD300m in debt was agreed on earlier this year.

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