With less than two weeks to go, Lockheed Martin Aeronautics and its Machinists union are reporting progress in contract talks but remain far apart on key issues as they try to avoid a crippling strike along the mile-long assembly line for the F-35 Lightning II joint strike fighter.
Negotiators for Lockheed and the International Association of Machinists and Aerospace Workers District Lodge 776 continue to swap proposals and have reached agreements on several items, with the union stating that the company has dropped, for now, a push for forced overtime.
Both sides continue to haggle over key issues such as wages, healthcare and pension benefits, with the union now seeking a 21 percent wage increase instead of a 38 percent boost and Lockheed offering 7 percent, up from its initial 5 percent offer, along with two lump sum payments.
The contract talks are moving quickly and proposals are changing on a daily basis while both sides keep a close eye on July 9, the day the union is scheduled to vote on Lockheed’s last and best offer. The current contract expires on July 10.
The goal of our negotiations is to obtain a fair and equitable contract that keeps our members moving forward economically.
Paul Black, president, International Association of Machinists and Aerospace Workers District Lodge 776
“Negotiations are going well. Both sides are working diligently to reach an agreement in time for the July 9th vote,” said Kenneth Ross, a Lockheed spokesman.
In an update on its website, the union leadership states there has been “positive progress” in the past week and following the union’s overwhelming vote earlier this month to authorize a strike.
“The goal of our negotiations is to obtain a fair and equitable contract that keeps our members moving forward economically and to protect other benefits which have been obtained through those years of bargaining,” Paul Black, president of Machinists Lodge 776, wrote in an email to the Star-Telegram earlier this week.
The Machinists union represents 2,600 workers at Lockheed’s Fort Worth plant and another 300 employees at Edwards Air Force Base in California and at Patuxent River, Md. It is the largest labor group at the Fort Worth complex, where about 14,000 people work.
Pentagon officials are keeping close tabs on the negotiations and have spoken with Lockheed officials about keeping the production line for the F-35 rolling. The plant is supposed to deliver more than 50 stealth fighters this year and gear up to build 17 a month by the end of the decade.
In town last week for the rollout of the first F-35 built for Israel, Lt. General Chris Bogdan said military officials and Lockheed have talked “openly and frankly” about the importance of the production schedule. At $379 billion, the F-35 program already has suffered its share of turbulence during its development.
“This is a program that is going to be around for 50 years and we’re going to be producing airplanes for the next two or three decades here, so they all understand how important this is,” Bogdan said.
Lockheed already is undertaking a $1.2 billion upgrade of the Fort Worth plant and plans to start hiring 1,000 additional assembly-line workers sometime next year, Ross said.
Lockheed and union officials began meeting in March, haunted by memories of a 2012 strike that lasted about 10 weeks. But since then the company’s management team has changed and Lockheed officials say they have reached out to the company’s labor force in an attempt to be more collaborative.
Another sign that things have changed is that the union and Lockheed are seeking longer contracts. The current agreement is for four years. The union wants a contract that runs four years and nine months, from July 2016 to April 2021. Lockheed wants a deal that lasts until April 2022.
“If the parties can agree on a longer-term deal ... the membership, the company, don’t have to go through ... the emotions of contract negotiations,” Black said after the strike authorization vote. “It is tough on members, it is tough on the company and it is tough on the union negotiators.”
Both sides also agreed to a week’s extension at the beginning of the contract talks to avoid having the current contract end during the July 4th holiday.
In the last contract, the union fought hard with the company over wages and benefits. It won pay increases totaling 11 percent and a lump sum bonus of $2,000.
In its latest proposal posted on its website, the union is seeking a 21 percent wage hike over the life of the contract, down from its earlier demand of 38 percent. It also dropped its signing bonus request to $3,500 from $5,000.
Things change, so our agreement has to change. It has to become more flexible, more modern, more agile.
Dale Kelly, lead negotiator for Lockheed Martin
While there are many employee classifications and pay scales within the Machinists union, the largest category is aircraft assembler, with 730 workers, according to Lockheed officials. The minimum pay earned by an assembler is about $41,000 a year, with someone at the top of the scale earning about $73,000. The average pay for an assembler working now at the plant is $55,000.
The union says it takes almost 20 years for a machinist to reach the top of the pay scale.
“I am not going to try to act like our members don’t make a decent wage,” Black said in the email. “What I will say is the company doesn’t pay those wages out of the goodness of their heart. The wage and benefit package is one that has been built over 70 years of collective bargaining.”
Lockheed has made a counteroffer with a much lower bump in pay.
Lockheed at first offered a lump-sum payment of 1.5 percent in 2016 and 1 percent raise in each of the next five years. It later increased that offer to a 1.5 percent lump sum in 2016 and another a half percent in 2017, along with a 1.5 percent pay hike each year from 2018 to 2022.
It also doubled its signing bonus offer to $1,000.
Lockheed also has backed away from an earlier proposal not to allow new hires to get cost of living supplement payments. The union is currently seeking $5,000 over the life of the contract.
Black has said in the past that what happens in the contract talks would be “profound” and “set the tone for the future of negotiations in aerospace.”
Lockheed officials couldn’t agree more. They say they are looking at the historical contract language in place for 70 years and how it might not match the technological advances in the workplace and the high expectations the company has for the F-35 production.
“Things change, so our agreement has to change. It has to become more flexible, more modern, more agile,” said Dale Kelly, the lead negotiator for Lockheed.
We’re at the final stretch and it’s going to be very fluid as both teams present proposals that work toward a final agreement.
Kenneth Ross, Lockheed spokesman
Looking toward the F-35 ramp-up, Lockheed continues to push for changes to work shifts to accommodate its production plans. Most of the machinists work eight hours Monday through Friday. The company has talked about a schedule where they take every other Friday off.
Lockheed, like other large corporations, is working to change its healthcare and benefit packages. In the last contract talks, the company shifted new hires to a 401(k) plan instead of a traditional pension plan.
It also is changing healthcare coverage. Employees at Lockheed like having choices between three different healthcare plans, while the union says the company would prefer that employees enroll in LM HealthWorks, which Black says has higher co-pays, deductibles and out-of-pocket costs.
All of it is still on the bargaining table as the clock continues ticking toward the contract deadline.
“We’re at the final stretch and it’s going to be very fluid as both teams present proposals that work toward a final agreement that will be ready for a vote.” Ross said.