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FORT WORTH -- Seven weeks have passed since Glen James, along with most of his 3,600 fellow Machinists union members, went on strike in west Fort Worth after voting to reject Lockheed Martin's final contract offer.Walking the picket line at Lockheed's main entrance Friday, James said he's prepared to keep walking for weeks to come if that's what it takes to force the giant defense contractor to improve its offer, especially on pension and health benefits."If need be, yes sir," James said. Why, he was asked. "Because it's the right thing to do."Union leaders say their members remain resolute in opposing Lockheed's plan to eliminate traditional pension plans for new employees and force workers to shoulder more of their healthcare benefit costs. They overwhelmingly rejected the company's last three-year contract offer, which included annual 3 percent wage increases, a $3,000 signing bonus and an annual $800 cost-of-living payment.On both the pension and healthcare, the union members are bucking national trends as major corporations scale back benefits. Still, at three meetings last week, about 1,000 members reaffirmed their commitment to the strike, said Paul Black, president of District Lodge 776 of the International Association of Machinists and Aerospace Workers.So is Lockheed likely to budge on its proposal to give newly hired workers a company-funded savings plan rather than a pension?In a statement Friday, Greg Karol, Lockheed's corporate vice president of labor relations, did not seem open to changing the proposal."We have made our position very clear to union leadership on the transition of future hires to a defined-contribution pension plan, the same transition we have made with the majority of our workforce," Karol said. "That position has not changed."The number of companies offering traditional defined-benefit pension plans, which promise retirees a fixed monthly payment based on a formula tied to wages and years of service, has dropped precipitously in three decades.In 1979, 38 percent of all full-time private-sector workers in the U.S. were covered by a traditional pension, according to the Employee Benefit Research Institute. By 2008, 15 percent of workers were still covered by an active pension plan, and the number is declining.The decline in pension plans "is overwhelmingly because of costs. These are very expensive plans for employers to offer," said Steve Blakeley, communications director of the institute.The cost of such plans has increased in recent years. Employers must fund their pension plans according to formulas that assume a set interest rate, say 7 percent. Since the financial markets debacle in 2008, stock market returns have plunged and the interest rates that banks, government and corporations are paying to borrow money are close to zero.Lockheed has said it injected nearly $2.3 billion into its pension funds in each of the last two years to meet long-term obligations to retirees. Its contract offer includes a 13 percent increase in pension payments when current employees retire.Some companies have frozen or eliminated their pensions because of the rising costs. Others, like Lockheed, are willing to fund pensions for existing employees, Blakeley said, but won't extend that benefit to new hires.An uphill battleUnion leaders and members acknowledge they may be swimming upstream."We just want to start a new trend," Black said. "Lockheed needs to be a leader, not a follower."Similarly, the union is bucking a tide of employees and individuals shouldering more of their healthcare costs.The company has proposed dropping three of its five health insurance plans. That would leave workers with a choice of enrolling in one remaining HMO or joining the company's LM Health Works.The latter requires annual deductibles of $650 for a single employee and a maximum of $2,000 for a family, with additional co-payments to doctors and hospitals. Employees also pay 13 percent of the insurance plan premium. The plan does limit an employee's out-of-pocket expenses, but at substantially higher levels than previous plans.Union members, many of whom are 50 or older and have worked long years at physically demanding jobs, say LM Health Works unfairly exposes them to much higher medical costs.Even at the proposed cost-sharing levels, Lockheed employees would still have a favorable plan by today's standards, according to the benefits institute. In recent years, the number of people covered by private health plans with deductibles higher than $1,000 a person has risen from 10 percent to 23 percent.In his statement, Lockheed's Karol said the company is "disappointed at the misinformation the union leadership has provided to their membership on the company's healthcare proposal."But Karol also said Lockheed "stands ready and willing to meet with the union leadership to discuss their concerns with the medical plans, to end this work stoppage."Debt rating loweredThe Machinists say their walkout is significantly hurting Lockheed. There was some joy Friday when Fitch Ratings, a Wall Street debt-rating service, lowered its view of Lockheed's prospects to negative from stable, citing in part the strike's effect on fighter jet production.But one financial analyst said the real concern of Wall Street is the prospect of shrinking defense spending and the threat of huge budget cuts in 2013 if Congress doesn't reach new debt limit and budget agreements."That's getting more attention than the strike," said Peter Arment, defense industry analyst for Sterne Agee.The Machinists are also cheered that Lockheed's stock price, which reached a 12-month high in the week after the strike vote, has tumbled more than 10 percent. But the entire stock market has dropped by about the same degree the last six weeks.After seven weeks off work, the union members have lost thousands of dollars -- most $10,000 or more -- in wages. Some have gone back to work, about 200 in Fort Worth.But James, who has worked at the plant for 28 years, says the cost in lost wages is a sacrifice he's willing to make for future workers."This is not about me. It's about the union and the group," he said.Asked what it will take to end the strike, Black, the Machinists president, said:"Lockheed comes back to the table and we keep our defined-benefit pension plan and we keep our choice of insurance plans we have now, or most of them."Bob Cox, 817-390-7723Twitter: @bobcoxictHave more to add? News tip? Tell us
