With the big aerospace companies flying high despite this year's recession, the industry's unionized workers in the next two weeks will be asking to share in the good times.
At the same time, the Carter administration will be watching these aerospace contract negotiations as a critical test of government efforts to hold down settlements and curb inflation.
Unions in the aerospace industry as demanding first-year wage increases of at least 15 percent. Strikes are a real possibility beginning Oct. 3.
The aerospace wage showdown is one of two bargaining developments now distressing government economists. In the other, the International Brotherhood of Teamsters has ruled out midcontract concessions to trucking employers to reduce operating costs. The industry, badly hurt by the recession and trucking deregulation, asked the union to put off a cost-of-living increase due in October. Industry spokesmen said paying it could wipe out up to 25 percent of all small trucking firms and cost the jobs of thousands of workers. The union said that delaying the payment would be ineffective and instead suggested cooperation on operating changes.
With inflation continuing, the International Association of Machinists, which bargains for 78,500 aerospace workers at Boeing, Lockheed, and McDonnell Douglas , and the United Automobile Workers, which represents 15,000 at McDonnell Douglas, are separately demanding 15 percent more pay in the first year of new contracts, followed by "substantial" increases in the second and third years. The unions contend that "profits of the industry are such that major improvements in our contracts are in order."
The major aerospace companies reported record sales of $45.5 billion in 1979, 22 percent more than in 1978, and after-tax profits of $2.7 billion. Although orders for jetliners have slowed this year, reflecting the recession, and profits are off from the 1979 level, the industry continues in a strong financial position.
Aerospace contracts ordinarily have followed the auto industry closely. This would mean an increase of no more than 10 percent this year. The government probably would welcome a settlement at that level.