Boeing Close to Battery Fix; Union Contract Talks to Resume

The damaged battery case from a fire aboard a Japan Airlines (JAL) Boeing 787 Dreamliner airplane at Logan International Airport in Boston is displayed inside an investigation lab at National Transportation Safety Board (NTSB) Headquarters in Washington, DC.
Saul Loeb | AFP | Getty Images

The largest group of engineers working at Boeing approved the planemaker's latest contract offer in a vote on Tuesday, likely paving the way for a full agreement as Boeing attempts to focus its resources on fixing battery problems on its 787 Dreamliner.

However, members of the union representing about 23,000 engineers also authorized it to call a strike, giving the union some leverage as parties head back toward negotiations.

According to the Seattle-based Society of Professional Engineering Employees in Aerospace (SPEEA), its "professional" members — who perform the main engineering duties on Boeing planes — voted narrowly in favor of accepting the contract, while a smaller group of "technical" members — who support the engineers — voted to reject it. Both groups voted in favor of authorizing the union to call a strike.

The groups negotiate together, but their contracts are separate.

The partial resolution of the drawn-out labor talks is a chink of light for Boeing, which is struggling to get to the bottom of battery malfunctions on its 787 and needs engineers in its factories to carry out its planned production ramp-up.

"There are pathways to a negotiated agreement available," said Ray Goforth, executive director of SPEEA, in a statement.

"With this second rejection by technical workers of Boeing takeaways, it's time for the company to stop wasting resources and improve its offer to reflect the value and contributions technical workers bring to Boeing. That way, we can avoid a strike and focus on fixing the problems of the 787 and restoring customer confidence in Boeing."

Boeing welcomed the professional members' acceptance, but said it was "deeply disappointed" that technical employees rejected the offer and authorized a strike.

"Our goal throughout this entire process was to make sure SPEEA-represented employees were rewarded for the contributions they bring to this company every single day," said Ray Conner, head of Boeing's commercial airplanes unit.

The two sides have differed over Boeing's plan to ax defined benefit pensions for new employees - standard procedure for most companies in recent times — and introduce a defined contribution retirement plan, effectively shifting more cost onto the employees.

"The realities of the market require us to make changes so we can invest in new products and keep winning in this competitive environment, which will allow us to continue to provide a solid future for our team," said Conner.

Washington state governor Jay Inslee urged both parties to settle differences after the vote.

"I spoke with representatives of SPEEA and the Boeing Company tonight to urge both sides to resume negotiations and bring about a resolution as soon as possible," he said in a statement

Boeing Close to Fixing Battery

Meanwhile, a source familiar with the U.S. company's plans told Reuters the planemaker has found a way to fix battery problems with its grounded 787 Dreamliner jets which involves increasing the space between cells.

"The gaps between cells will be bigger. I think that's why there was overheating," said the source, who declined to be identified because the plans are private.

The 50 Dreamliners in commercial service were grounded worldwide last month after a series of battery-related incidents including a fire on board a parked plane in the United States and an in-flight problem on another jet in Japan.

Until the Dreamliner is cleared to fly again, Boeing will be starved of delivery payments.

The logical solution for Boeing would be to install ceramic plates between each cell and add a vent to the battery box, Kiyoshi Kanamura, a professor at Tokyo Metropolitan University who has conducted research with several Japanese battery makers, told Reuters on Tuesday.

Earlier on Wednesday, the chairman of state-run Air India said Boeing is hopeful of getting the Dreamliner back in service by early April.

"They said that these planes should start flying again from early April. They can't be sure but they are hopeful," Rohit Nandan said.

Bloomberg | Getty Images

Air India has six Dreamliners and has ordered 21 more. The question of the airline seeking compensation from Boeing for the jet's glitches would be taken up once the aircraft are flying again, Nandan said.

"Good progress is being made," a Boeing spokesman in Seattle said in response to questions about a possible flight restart in April.

"We have been in close communication with our customers since this issue arose. The details of our conversations with customers are confidential," he added.

Spokesmen for Japan's All Nippon Airways, which has the biggest fleet of Dreamliners, and Japan Airlines said they were unaware of the suggested April schedule.

ANA and JAL have been most affected because they own around half of the lightweight, fuel-efficient jetliners in operation as a strategic move to win market share from their U.S. and European rivals.