Machinists at Lockheed Accept Contract Offer

Lockheed machinists, without a labor contract for the past four months, voted overwhelmingly Sunday to accept a new 3 1/2-year pact with the Calabasas aerospace contractor.

The new contract, which covers about 18,000 workers in Palmdale, Burbank, Sunnyvale, Calif., and Marietta, Ga., represented by the International Assn. of Machinists and Aerospace Workers, provides 4% wage scale increases or bonuses retroactive to last October, plus an immediate $2,500 signing bonus for all workers covered by the contract and currently on the payroll. During the second and third years of the pact, wages will rise 7%, through a combination of base wage increases and bonuses. The contract expires in March, 1993.

The contract also allows Lockheed to match employee contributions to a company-sponsored savings plan with Lockheed stocks. However, the new Employee Stock Ownership Plan (ESOP) will not go into effect until July and is not expected to play any role in the current struggle by Lockheed to resist the efforts of Texas financier Harold G. Simmons to wrest control of the company from its current directors.

The contract contains some major concessions from the union demanded by Lockheed negotiators who said the company is under intense pressure to keep a lid on the rising costs of aerospace contracts and remain competitive in the tight fight for the shrinking defense dollar. Among those are a 6% employee contribution for dependent medical care and a two-tier wage scale that would create a lower salary range for newly hired workers in certain jobs.

But perhaps the largest concession from the union is the contract’s provision that about 20% of the workers it covers will receive quarterly bonuses rather than an increase in their wage scales during the first year of the contract. By the third year, the percentage will rise to about 47% of the workers. An earlier contract proposal, overwhelming rejected by the union, called for a greater percentage of workers to be covered by the bonuses.

Bonuses are preferred to wage scale increases by management because they lower the fixed cost of hourly labor on which so many benefit calculations such as cost-of-living adjustments are based.

Sunday’s vote was the culmination of about six months of arduous, on-again-off-again talks between the union and Lockheed negotiators. Last month, union negotiators rejected a company offer and recommended that its members follow suit. In mid-February, the members rejected the contract by a 98% margin.