Boeing workers put strike on hold for 48 hours


For the second time in three years, members of Boeing Co.'s largest union have voted to support a strike that would halt work on its airplane production lines.

However, the union agreed to extend its contract for 48 hours and continue negotiating at the request of Washington Gov. Chris Gregoire and a federal mediator. Jim Proulx, a Boeing spokesman, said company and union negotiators would meet together with a federal mediator at an undisclosed time and location Thursday.

Members of the International Association of Machinists and Aerospace Workers were originally set to walk out at 12:01 a.m. today to man picket lines at several Boeing facilities, including the giant plant in Everett, Wash., where Boeing workers assemble planes ranging from the 737 to the delay-plagued 787 Dreamliner.

The union's chief negotiator Mark Blondin said it was worth one more try to reach agreement at the bargaining table without a strike.

"We have told you all along that our job as negotiators is to negotiate a contract that is acceptable to you, not to negotiate a strike," Blondin told 100 shop stewards and others who had been chanting "strike, strike, strike" after the extension was announced.

"If we can't do it in 48 hours, brother, it's on," Blondin said.

If Boeing's 27,000 machinist union workers do strike, the greater financial blow to Chicago-based Boeing increases the longer they are off the job. Boeing was already struggling to keep pace with orders lodged during the recent record-breaking boom in aircraft sales, analysts said.

In 2005, a dispute over retirement benefits prompted Boeing's machinists to stop work for nearly a month. A strike of similar length this year would heighten the risk of additional costly delays to three aircraft in development at Boeing: the 787 Dreamliner, which is already 18 months late; a revamp of the decades-old 747 jumbo jet; and a new 777 freighter, which began test flights earlier this summer.

"In our opinion, a short strike would not be a serious problem because the lost revenues and profits could be recouped next year," wrote Michael Derchin, aerospace analyst with FTN Midwest Securities Corp., in a Sept. 3 research report. "A longer one could have serious consequences for Boeing and the industry."

Boeing officials had sought to avoid a strike, even launching an advertising and public relations blitz in an effort to dissuade workers from voting for the walk out.

While Boeing met many of the union's demands, it refused to compromise on the issue of outsourcing. The union had sought to revoke language from the 2002 contract that enabled Boeing to shift much of the design and construction work traditionally done in-house to supply partners.

The move enabled Boeing to cut its construction costs sharply on the 787, but resulted in costly delays when suppliers struggled to keep pace with an aggressive production schedule or meet Boeing's quality standards for the ground-breaking new plane.

Boeing's unions are concerned they will lose thousands of jobs over the next decade as Boeing creates successors to two aircraft largely built by its employees now: the 737, its popular narrow-body jet, and the larger 777.

"This has been a long-standing concern," said aviation consultant Scott Hamilton. "Clearly, they're looking at the prospects for the next airplane . . . and are concerned even more jobs will be outsourced."

jjohnsson@tribune.com

The Associated Press contributed to this report.

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Dow Industrials Fall 340 Points

Published: September 4, 2008, NY Times

Stocks on Wall Street plunged on Thursday, but few investors seemed to settle on one reason.

A broad sell-off sent the Dow Jones industrial average down 344.65 points at the close — the index’s worst performance since June — hours after the government reported that the number of Americans filing for unemployment benefits unexpectedly rose last week.

But the sharpest declines came nearly two hours after that report was released, a lag that rarely occurs in today’s overheated financial world. The other financial news of the day, including a $1.70 drop in the price of oil, would usually cheer investors. So what gives?

“I’m trying to answer the same question,” Steve Sachs, who directs trading at Rydex Investments, said. With no clear catalyst, Mr. Sachs pointed out that trading was relatively light on Thursday, which means big trades by a handful of investors can cause major swings.

“Volumes overall are very, very light,” he said. “If this was happening last week, before Labor Day, everyone would be saying, ‘Don’t read too much into it.’ Nobody’s around. There aren’t a lot of players.”

Speculation focused on fears about the direction of the economy, though it remained unclear why anxieties that have been around for months would suddenly take hold. Some investors said they were worried about the unemployment report for August, which will be released Friday. Economists expect the economy to have shed another 70,000 jobs last month; a worse-than-expected showing would be an ominous sign for the economy’s health in the rest of the year.

At the close, the Standard & Poor’s 500-stock index was off 2.9 percent, or 38.15 points, to 1,236.83. The Dow was also down 2.9 percent, to 11,188.23, and the Nasdaq had declined 3.2 percent, or 74.69 points to 2,259.04.

The worst performers were in the energy sector, where the decline in oil prices has soured investors’ mood on refineries and commodity companies. Exxon Mobil shares traded down 1.5 percent, and shares of Chevron were off nearly 3 percent.

Usually, lower oil prices mean a good day for stocks. While shares of energy companies may decline, investors tend to buy into businesses more dependent on consumer spending, which has been curtailed by high gasoline prices.

But on Thursday, reports from the nation’s biggest retailers revealed a consumer that has been opting to shop at discount stores. Big-box retailers like Target saw their sales decline in August, while sales rose at Wal-Mart, Costco and other wholesale stores. The reports suggested that profits at many American retailers would continue to fall even as gas prices come down.

“When oil was $145, everyone screamed inflation. At $105, everyone is screaming, ‘Where is the demand?’,” said Ryan Larson, a trader at Voyageur Asset Management. “It’s like the markets can’t really be happy one way or the other.”

Other analysts suggested that computerized trading models may be the culprit for Thursday’s sell-off. Richard Sparks, an analyst at Schaeffer’s Investment Research, noted that the S.&P. 500 index fell below 1,260 just minutes before the day’s biggest decline. He suggested that some investors may be using computers that are programmed to sell stocks after that level was reached.

Or the sell-off may be a result of simple momentum.

“The acceleration is feeding on itself,” Mr. Sparks said.

While Thursday’s declines are the worst since June, the market could move in an entirely different direction depending on the data released on Friday by the Labor Department, which will report the unemployment rate for August and estimate how many Americans were laid off during the month.

A report on Thursday suggested that the figure could be dire. The number of Americans who registered for unemployment benefits last week rose to 444,000, near a five-year high, according to data compiled by the Labor Department.

“This morning’s employment numbers continue to indicate that the labor sector remains soft at best and looks to continue to shed jobs throughout the remainder of the year,” Joseph Brusuelas, chief economist at Merk Investments, wrote in a note.

Other economic data released on Thursday was more positive. Productivity was revised up to 4.3 percent last quarter, far higher than economists had estimated.

A separate private report showed that activity in the services sector grew in August after contracting for months. The non-manufacturing index of the Institute for Supply Management rose to 50.6 from 49.5 in July, on a scale where readings above 50 indicate growth.

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McCain speech to emphasize life of service to country

By Alan Gomez and Randy Lilleston, USA TODAY

ST. PAUL — In his speech to the Republican National Convention later Thursday, John McCain will present himself as a leader who has acted to change the way government works, according to excerpts released by his campaign.

"I will reach out my hand to anyone to help me get this country moving again. I have that record and the scars to prove it. Senator Obama does not," McCain will say, according to the excerpts.

The excerpt is consistent with a major claim of this week's convention — that McCain's Democratic opponent, Barack Obama, has talked at length about changing government without backing his words with action.

McCain, the 72-year-old Arizona senator, will emphasize his life in public service and draw out the policy differences between him and Obama.


"I fell in love with my country when I was a prisoner in someone else's," McCain will say, according to the excerpts. "I loved it because it was not just a place, but an idea, a cause worth fighting for.

"I was never the same again. I wasn't my own man anymore. I was my country's."

He also will praise his pick for vice president, Alaska Gov. Sarah Palin.

"I'm very proud to have introduced our next vice president to the country, but I can't wait until I introduce her to Washington. And let me offer an advance warning to the old big-spending, do-nothing, me-first, country-second Washington crowd: change is coming."

McCain will repeatedly emphasize the "country first" theme that has been a major part of the convention, Minnesota Gov. Tim Pawlenty, national co-chair of the McCain campaign, told USA TODAY.

Obama's message of change "does not ring true," Pawlenty said, calling the Illinois senator a strong partisan with little record of stepping away from the party orthodoxy. McCain, on the other hand, has a clear record of independence, Pawlenty said, and the speech will give him a chance to outline those credentials.

In contrast to Obama's nomination speech last week, given to more than 80,000 people in a Denver football stadium, McCain will give his address in a far more intimate setting.

The convention's stage and podium have been reconfigured to create the "town hall" atmosphere McCain used so successfully in the primary season. The stage brings the crowd closer to McCain in what campaign manager Rick Davis called a "symbolic and practical" measure.

"His strength is in more of an intimate setting, a more conversational setting in tone," Pawlenty said.

McCain checked out the setup in midafternoon, chatting on stage with his wife, Cindy, and Sens. Lindsey Graham of South Carolina and Joe Lieberman of Connecticut.

Cindy McCain will not introduce her husband, as first lady Laura Bush did for President Bush's video address on Monday. Instead, Davis said McCain's wife would talk about her humanitarian work around the world. A video will introduce the nominee before he speaks at about 10 p.m. ET.

She admitted that she was nervous about addressing delegates.

"I'd like people to know what makes me work and what makes me tick and who I am, what I'm all about and where I come from," she told ABC's Good Morning America. "I have an interesting story to tell as well in that it combines the two of us and makes us a couple and what we will represent."

She also told ABC "I don't agree" with McCain running mate Sarah Palin's opposition to abortion in cases of rape and incest, "but I do respect her for her views."

John McCain opposes most abortion rights, but has supported allowing abortions in cases of rape and incest. Palin's view that all abortions should be illegal has helped mollify social conservatives in the party who have had doubts about McCain because of his work with Democrats.

Other speakers tonight include Pawlenty and former Pennsylvania Gov. Tom Ridge — both considered finalists for the vice presidential slot eventually given to Palin.

The address comes one night after a well-received acceptance speech from Palin. Davis said the Alaska governor delivered a speech that immediately made her "a household name."

Thursday, Palin said she was looking forward to McCain's acceptance speech. "We are all very excited about tonight," she told reporters after meeting with a group of Republican governors in next-door Minneapolis. "The people of this country will once again see tonight the conviction and the character that make him a great man, an honorable man and will make him a great president."

In her Wednesday speech, Palin offered a sharp critique of Obama and Democratic running mate Joe Biden while explaining how her time as mayor in tiny Wasilla, Alaska (population 9,780) and governor have prepared her for the vice presidency.

"I guess a small-town mayor is sort of like a 'community organizer,' except that you have actual responsibilities," she said. Before entering politics, Obama worked as a community organizer on the South Side of Chicago.

Biden told USA TODAY this morning that he thought Palin was "very poised" and said he won't be able to match her "zingers." He said he believes she got a "raw deal" from critics and commentators who have zeroed in on her family and questioned her ability to raise her five children while serving as vice president.

"C'mon. This is 2008," Biden said in an interview in Norfolk, Va.

Obama, campaigning in York, Pa., dismissed the Republican criticisms of him.

"You're hearing an awfully lot about me — most of which is not true — but you're not hearing a lot about you," Obama said at a campaign event. "You haven't heard a word about how we're going to deal with any aspect of the economy that is affecting you and your pocketbook day-to-day."

McCain and Palin will leave St. Paul immediately after the speech and travel to the Milwaukee area for a Friday campaign rally. Obama and McCain meet in the first presidential debate on Sept. 26 at the University of Mississippi, while Palin and Biden will face off Oct. 2 at Washington University in St. Louis.

Contributing: David Jackson and Jill Lawrence in St. Paul; Charisse Jones in New York; Associated Press

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