nion contracts (covering both production and professional employees) due for negotiation in late-1989 and early-1990. The settlement terms in the machinists contract would provide a precedent for future negotiations.
In the context of compensation levels, the issue was relatively routine for labor-management disputes--the union was asking for more than the company said that it was willing to, or could afford to, pay. The IAM demanded a 27 percent increase over a three year time period, while the company offered 10 percent over three years. The company offer was less than projected inflation for the three year time period.
An even more contentious issue was how any compensation increase should be paid. The union wanted the bulk of any pay increase to be in the form of increased wage rates. The company, on the other hand, wanted to avoid significant increases in wage levels, and pay the bulk of any compensation increases in the form of a one-time bonus (Bernstein, 1989).
The third issue involved in the machinists strike was the level of overtime. Boeing's machinists wanted reductions in overtime to permit them to have more time with their families. To meet this demand, Boeing would either have to hire more workers, or stretch out its aircraft delivery schedule (O'Lone, 1989b). The company was not interested in either of those alternatives.
The scheduling of overtime was also at issue. The IAM demanded a voice in the scheduling of overtime, while the company said that was its right.
Lastly, on the company's side, Boeing was concerned about the effect that the settlement of the machinists strike would have on its negotiations with other unions. This concern caused, in part, the company to take a hard line against the IAM (O'Lone, 1989a).
Although all of the issues discussed were involved in the machinists strike, the real areas of contention soon boiled down to compensation levels, and the method of paying ...