The most recent recession hit the manufacturing sector hard. Still, within manufacturing, there have been pockets of strength, such as defense contracting.
Over the past 52 weeks, the 18-stock PHLX Defense Sector Index has risen 23 percent compared with a 17 percent increase for the Standard & Poor’s 500 Index.
While future U.S. defense budgets are likely to shrink, recent years have been good for anyone supplying the military. That’s why it was intriguing to see how negotiations over the new collective bargaining agreement at Boeing Co.’s Delaware County operations would play out.
A four-year contract between Boeing and Local 1069 of the United Aerospace Workers expired on Oct. 1, but the two sides kept talking, reaching a tentative agreement on Oct. 14. On Sunday, members voted 5-1 to ratify a five-year deal.
During a press briefing in September, company officials stressed that they were seeking cost certainty to show its customers that labor costs have stabilized and are competitive. On Monday, spokesman Andrew H. Lee said this deal does that. (A call and email to Local 1060’s headquarters was not returned.) Read more about the terms here.
At a time when wage cuts and benefit reductions are common, the 1,789 members of the UAW who make Boeing Chinook helicopters and the fuselage of the V-22 Osprey tiltrotor aircraft will enjoy increases.
Under the terms of the agreement, unionized workers will receive wage hikes in each year of the contract, starting with 3 percent in the first year.
The union also won improved pension benefits and maintained its health-care benefits at current contribution levels. Those are significant accomplishments in an era of pension dumping and cost-shifting on health care.
But I also view the contract as a sign of strength by an innovative area manufacturer that employs more than 5,400 people at its 355-acre complex in Ridley Township.
After all, labor peace there is also good for more than 830 Pennsylvania companies that depend on Boeing for their livelihood.