(Changes dateline. Adds Boeing response to union offer, FAA
grounding of 787s and Boeing response in paragraphs 6-8.)
SEATTLE, Jan 16 (Reuters) - An escalating series of mishaps
on Boeing's new 787 Dreamliner has dealt engineers pushing for a
new contract a strong card to play at the negotiating table.
The engineers are considered by aviation experts to be
crucial to a safety review of the 787 that the Federal Aviation
Administration launched last week after a fire, fuel leaks and
other failures sparked widespread fears about the new jet.
The safety concerns threatened to turn into a full-blown
crisis for Boeing on Wednesday when Japan's two leading airlines
grounded their 24 Dreamliner passenger jets when one of the
aircraft made an emergency landing after instruments indicated a
battery error and smoke. The Japanese aircraft
account for nearly half the 50 Dreamliners now flying.
On Wednesday, the union made a "best and final" offer to
Boeing, proposing to incorporate areas where the two sides had
already agreed into the expired contract and extend it for four
more years.
This would end "protracted and increasingly contentious
negotiations that appear headed for a strike," the union said,
and allow Boeing and its workers "to focus on reaffirming
confidence and proving the 787 is the reliable and safe product
employees know it to be."
Boeing said it was reviewing the offer and talks would
continue Thursday.
The news came as the FAA required airlines to stop flying
787s, and Boeing CEO Jim McNerney said the
company would use all of its resources to find answers to the
problem qu ickly. [ IDA:L1E9CH0EY]
The FAA action, and its review , come after an extraordinary
string of mishaps, including a battery fire, two fuel leaks,
three electrical faults, a cracked cockpit windscreen, an engine
oil leak and brake problems that have raised safety concerns
with the new carbon-plastic composite aircraft.
Experts said a walkout by engineers would impede both the
safety review and Boeing's ambitious effort to double production
of the 787 this year because key people with knowledge of the
aircraft and the clearance to certify that production lines are
meeting FAA requirements would be taken away.
"The engineers have to be involved," said R. John Hansman, a
professor of aeronautics and astronautics at Massachusetts
Institute of Technology. "Nobody at the FAA knows this airplane
as well as the engineers who were involved in the design and
testing."
STRIKE WOULD SLOW REVIEW
Boeing has said it has engineers in California and elsewhere
who can work on planes if the union-represented engineers walk
out. Some Boeing managers also have the necessary high-level
clearance to certify aircraft, according to officials at the
union and industry experts.
However, before it could use replacement engineers either
for production or the review, Boeing would need to convince the
Federal Aviation Administration that those workers have the same
skills as the union members, Boeing and the FAA said.
Obtaining FAA approval would slow the safety review, which
is already expected to take months.
"Under the rules, Boeing would need to submit a plan to the
FAA to show that any replacement workers brought in to work on
certification issues would be as capable as those they replaced,
and the FAA would need to approve it, for the 787 review to go
on," an FAA spokesperson said.
"Anytime any company has labor issues or is in bankruptcy,
we would normally heighten surveillance of the compliance" with
FAA certification rules.
Boeing declined to comment further on how it would handle
the review or production during a strike, although industry
experts said it might have more people in reserve who have the
high-level FAA authorization to conduct the review or work on
planes.
"We don't generally talk publicly about contingency for a
strike because we are focused on getting an agreement," Boeing
spokesman Doug Alder said.
For its part, the union says the safety review needs to
include engineers who oversaw the original plane certification,
or the review will not be credible.
"I don't see how you could do that review without having the
key people present to participate," said Ray Goforth, executive
director of the Society of Professional Engineering Employees in
Aerospace, or SPEEA.
PLANE PRODUCTION MIGHT CONTINUE
Boeing may still produce aircraft if the engineers walk out.
During a 40-day SPEEA strike in 2000, Boeing produced 19 planes,
according to union records.
Boeing made clear last Friday that it could call on
contingent workers from its wider operations, which include not
just airplanes, but defense, space and security businesses.
"We are the Boeing company and I have access to significant
resources across the entire corporation," Mike Delaney, a vice
president of engineering and a member of Boeing's labor
negotiating team, said during a news conference call.
There also is potential for the two sides to strike a deal.
Boeing made a contract offer on Friday that improved raises
for the engineers to between 4 percent and 5 percent a year from
3 percent to 4.5 percent.
But SPEEA said it views the latest offer as making
across-the-board pay and benefit cuts at "a time when Boeing is
posting record profits and lavishing pay raises and bonuses upon
its executives."
The FAA told Reuters it has started to work with Boeing to
assemble teams for the safety review. The teams ordinarily would
include the relatively few union-represented engineers with
high-level FAA authorization to certify the plane is in
compliance with FAA safety rules, the FAA said.
If those people are on strike, then the review could not
call on those most familiar with the design and manufacturing of
the plane. The team likely would draw on some replacement
workers, who would need to be approved by the FAA, the FAA said.
Hansman, the MIT professor, who also serves on an FAA
advisory committee, said replacement workers who have not dealt
with the 787 before could turn to technical records and
drawings.
"But that will take them a lot more time," he added.
SERIES OF FAULTS
The FAA, Boeing and SPEEA say the 787 is safe to fly and
that minor problems are common when new types of jets first
start operating. Airlines and analysts also back that view.
The National Transportation Safety Board has launched a
separate investigation into the battery fire that occurred on a
Japan Airlines jet in Boston.
The NTSB said on Wednesday it is sending a person to Japan
to investigate the smoke and battery issues that grounded the
fleets there.
The other incidents are considered normal by aviation
experts, but their quick succession on relatively few planes has
drawn attention to the problems.
Boeing stock closed down 3.4 percent at $74.34 on Wednesday.
(Reporting by Alwyn Scott; Editing by Patricia Kranz, Edward
Tobin, Andre Grenon and Ken Wills)