Workers walk off the job at Lockheed plant in Ga.

Union leaders object to `outsourcing'

no talks scheduled

March 12, 2002|By Robert Little | Robert Little,SUN STAFF

Workers at Lockheed Martin Corp.'s airplane manufacturing plant in Marietta, Ga., walked off the job yesterday, threatening to shut down production at two of the nation's major assembly lines for military aircraft.

Lockheed Martin officials say that managers and nonunion workers will continue manufacturing and assembling F-22 fighters and C-130J transport planes, while members of the International Association of Machinists and Aerospace Workers picket outside demanding greater job security. Wall Street seemed confident that the strike won't last long enough to delay aircraft deliveries and erode company profits.

But union leaders gave no indication yesterday that a resolution will come quickly. Negotiations between labor and management are not scheduled, and both sides say their final offers have already been made.

"We'll stick it out for one day more than the company is willing to stick it out, however long that is," said union spokesman Bob Wood. "We're making a stand. The loss of jobs is going to stop."

At issue is a proposed three-year contract for members of the Machinists union, which represents about 2,700 of the Marietta plant's 7,000 employees.

Union workers at the plant make about $24 an hour, and the proposed contract offered raises of at least 3 percent in each of the next three years. But it also would allow Lockheed Martin to "outsource" roughly 340 maintenance workers and plant firefighters the union represents by replacing them with contractors.

The union rejected the contract Sunday and began the strike just after midnight yesterday morning. Scores of union members at Lockheed Martin plants in Meridian, Miss., and Clarksburg, W.Va., also chose to strike yesterday, in support of the workers in Georgia.

The Marietta plant employed nearly 20,000 in the late 1980s, and Wood said Lockheed Martin continues to lay off about 10 employees a month.

"Signing this contract would be like signing layoff notices for our workers," Wood said.

Lockheed Martin officials called the proposed contract "fair and equitable."

"The bottom line is that no one's job is secure right now - not mine, not anyone's," said Lockheed Martin spokesman Sam Grizzle. "We believe the security of our jobs is best assured by our competitiveness in the marketplace."

Lockheed Martin is the nation's largest defense contractor, employing roughly 125,000 worldwide. And the plant in Georgia is not the company's largest or most profitable aircraft manufacturing facility - those distinctions belong to its plant in Fort Worth, Texas, where F-16 fighter planes are made and the new F-35 Joint Strike Fighter is being developed.

But aircraft manufacturing is a thin-margin business, and the main product in Marietta - the C-130J Hercules transport - has yet to record a profit after four years in production. A spokesman said that 33 of the planes have been ordered but not yet built.

The F-22 Raptor is in its early stages of production in Marietta, with the first combat-ready version not expected until late 2005.

Analysts seemed little concerned about the strike's effect on profits. Construction of one C-130J transport plane takes about 15 months, and an F-22 takes longer. The assembly line would have to be closed for weeks or months to have a lasting impact on the company's finances, they said.

"At this point it hasn't really disturbed investors because I think there's an expectation of it resolving pretty quickly," said Christopher Mecray, an aerospace analyst for Deutsche Bank in New York. "If it drags on, then people might start to worry."

Shares of Lockheed Martin rose $1.01 yesterday to close at $57.75 on the New York Stock Exchange.

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