Posted on 05/24/2005 8:18:33 PM PDT by Righty_McRight
NEW YORK (Reuters) - Canadian buyout firm Onex Corp on Tuesday said a key labor union rejected its contract offer in a setback to its C$1.5 billion purchase of several Boeing Co commercial airplane manufacturing facilities.
"We are obviously disappointed at the outcome of today's vote," Onex managing director Nigel Wright said in a statement. "We are reviewing our options and want to give them careful consideration before making a determination about our next steps."
Members of the International Association of Machinists and Aerospace Workers at Boeing's plant in Wichita, Kansas rejected the proposal. Officials at Boeing and the union were not immediately available.
The deal includes Boeing facilities in Wichita, Kansas and Tulsa and McAlester Oklahoma. The new business would enter into long-term supply agreements with Boeing.
Boeing's defense systems businesses in Wichita and in Oklahoma are not part of the transaction.
Toronto-based Onex hired former U.S. congressman and Democratic presidential candidate Richard Gephardt in April to assist with the labor talks. The company has previously said it would not make a counter-offer if the contract was rejected, according to published reports.
Onex officials could not be reached for further comment.
Onex, headed by financier Gerald Schwartz, has taken stakes in a wide variety of industries, typically with a view to improving their results and selling them off again.
Looks like old Dick failed again.
After no vote, Onex officials "reviewing our options"
Now that hourly workers at Boeing Wichita have rejected Onex's Corp.' s five-year contract offer, it's up to the Canadian-based investment firm to make the next move.
Onex managing director Nigel Wright had previously said that the company would walk away from the deal to buy Boeing's commercial operations in Wichita, Tulsa and McAlester, Okla. if Machinists rejected the labor agreement. But less than a hour after the union said 57 percent of the members rejected the contract this afternoon, Wright said in a prepared statement "we're reviewing our options and want to give them careful consideration before making a determination about the next steps."
With 5,300 members, the Machinists union is the largest bargaining unit at Boeing Wichita. If the union had approved the deal, Onex was expected to make a final offer Wednesday to the Society of Professional Engineering Employees in Aerospace, the company's second-largest union.
But that offer is being postponed.
A spokesman for Boeing said the airplane maker will proceed with its plans to sell the business, until Onex notifies it otherwise.
"It's our hope that Onex and the Machinists union can reach some sort of resolution in the near future that ultimately allows the Wichita/Tulsa operations to transition to new ownership under Onex," Chuck Cadena said in a statement. "We believe the sale of these operations is the best available option for employees of the division and for the plant communities because of the growth opportunities that will be available under new ownership."
The parking lot of the Kansas Coliseum, where the vote was held, filled early this morning with Boeing Wichita workers whose jobs hinged on the outcome of today's vote. Some workers carried "No" signs urging people eligible to vote to turn down the five-year deal. Others walked quietly to the lines that extended into the parking lot.
Only those who received job offers from Onex were eligible to vote. Workers had to show their driver's license or Boeing employee badge to enter the Coliseum and register to vote. Their names were then compared to a list of eligible voters, union officials said.
The contract imposes an immediate 10 percent wage cut, calls for increases in insurance premiums and co-pays and makes significant changes in job classifications. It also includes wage increases in years two, three and four of the contract, provides performance bonuses, a pension plan, 401K, and gives workers 1,000 shares of stock in the new company that pays out under certain financial conditions.
The vast majority of those who agreed to be interviewed by The Eagle today said they were voting no.
"Who likes to take a pay cut?" said Thomas Keys, a sheet metal worker with 21 years at Boeing. "Hopefully, they'll leave," if the contract is voted down.
Onex lost the vote but is not leaving.
They are still talking to the machinist's union (IAM), but don't intend to negotiate with the engineer's union (SPEEA). I guess it's up to Onex to decide what they will pay, and SPEEA members can take it or leave it.
Over 1200 IAM and more than 200 SPEEA members are already laid off, no matter what is finally agreed on.
Until recently, management has remained uncut, but a few were sent home last week. When the dust settles I expect another round of terminations, this time concentrating on management (just MHO).
Meantime, orders for aircraft are up sharply, while morale in Wichita is circling the drain.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.