In a victory for French plane maker Airbus and a setback for Boeing and its U.S.-based workforce, Defense Secretary Donald Rumsfeld suspended for at least six months any decision on the Air Force’s plan to acquire 100 aerial tankers.

The delay jeopardizes hundreds of Boeing jobs in Everett, Washington and Wichita, Kansas and increases the possibility that the entire $23 billion tanker contract could be re-bid – an outcome feverishly sought by Airbus and their allies, including Arizona Sen. John McCain.

The decision by Rumsfeld comes despite widespread concerns that many aircraft in the current fleet of KC-135 aerial tankers are more than 40 years old and reaching the upper limits of airworthiness and safety.

A recent report by the Defense Science Board noted corrosion in the current fleet, but called the issue “manageable” and recommended against replacement. Other reports, however, argue for immediate replacement of the aging tanker fleet.

NMB Stonewalls Freight Rail Negotiations

A new agreement for nearly 8,000 IAM rail workers remains blocked by the refusal of the National Mediation Board (NMB) to declare an impasse in the 56-month old contract dispute.

Talks between the IAM and representatives of the nation’s Class 1 Freight Rail Carriers began in 1999 with management proposing massive rollbacks in workers’ wages, work rules and benefits. The carriers’ representatives insisted on terms similar to an arbitrated agreement reached with another rail union and called for workers’ wage increases to be used to pay for increased health care costs.

“Despite repeated calls to advance the bargaining process to the next step, the NMB has failed to act,” said Transportation GVP Robert Roach, Jr. “The NMB is obviously driven by a political agenda, and immediate action is required to provide our members an opportunity to exercise their collective bargaining rights.”

GVP Roach called on all IAM members to show support for our railroad membership by contacting their elected representatives. Click here for more information and to send a letter demanding fairness for rail workers.

Medicare Law Provides Windfall for Employers

Large U.S. companies are banking hundreds of millions of dollars in savings thanks to an obscure provision in the new Medicare Law that grants subsidies for companies that provide retiree drug benefits.

Intended as an incentive for employers to continue offering retiree drug benefits rather than unload its retirees into the new Medicare program, the subsidy is especially generous for employers with large numbers of retirees. U.S. Steel reduced its future obligations for retiree health benefits by $450 million in 2003 while bankrupt United Airlines expects to receive $280 million in 2003.

The subsidy is based on a formula that pays 28 percent of the cost of each retiree’s prescription spending over $250, up to a maximum of $1,330 per retiree per year. Not surprisingly, the subsidy ignores the level of prescription drug co-payments by employees and rewards employers exclusively for maintaining programs that are often funded in large part by retirees themselves.

While actual payment of the subsidies will not begin until 2006, many companies will realize immediate benefits under accounting rules that allow corporate balance sheets to include savings under the new law.

HPWO Partnership Signed with Milwaukee Cylinder

IP Tom Buffenbarger and Midwest Territory GVP Jim Brown traveled to Local Lodge 908 in Cudahy, WI and signed a High Performance Workplace Organization (HPWO) partnership agreement with representatives of Milwaukee Cylinder.

“The need for labor and management to protect jobs and preserve manufacturing in North America has never been greater,” said IP Buffenbarger. “This agreement gives the IAM and Milwaukee Cylinder the opportunity to work together towards that goal.”

The Wisconsin company drew praise recently with a decision to transfer production of its bridge leveling cylinders from a non-union firm in Holland to the IAM-represented facility in Milwaukee.

The IAM supports HPWO partnerships at more than 50 sites across North America. The process features shared decision-making and development of strategic business plans that promotes productivity and job security.

The HPWO partnership agreement was signed by IP Buffenbarger, GVP Brown, District 10 DBR Mike Hornby, District 10 BR Bill Christianson, Committee Chairman Dave Sukup, and Shop Stewards Ken Boudwine, John Adler and Robert Monte. Signing for the company were Global Operations Leader Ralph Keller, Plant Manager Bob Prestby and Cell Leaders Jim Malison, Tom Lukaszewicz and Jacob Remus. Click here for more information about HPWO

No Recovery for Big-Ticket Items

The so-called "economic recovery" President Bush continues to tout took a detour last month, especially in the struggling manufacturing sector.
The Commerce Department reported on Wednesday that orders to factories for big­-ticket goods and new home sales both dropped significantly in April. Orders for "durables", which are considered to be expensive manufactured goods expected to last over an extended period of time, dropped 2.9 percent in April - the largest decline since September 2002.

The drop was highlighted by a 4.7 percent drop in demand for transportation equipment, such as cars and airplanes. Demand for machinery and primary metals such as steel also took a dive last month. In addition to the hit on the manufacturing sector, new-home sales dropped by 11.8 percent last month - the largest monthly drop in over 10 years.