Lockheed workers to vote Thursday on new contract

WASHINGTON (Reuters) - Striking workers from the Fort Worth, Texas, plant where Lockheed Martin Corp builds F-16 and F-35 fighter planes will vote on Thursday on whether to accept a new contract agreed to by a key union and management late Saturday, the union said.

The modified contract, posted on the union's website, would give union members wage increases of 2.5 to 3 percent in each of the next four years, a lump sum payment of $2,000, and an additional $1,600 in cash to pay for inflation.

The contract would boost pension benefits for current employees, but would shift future workers to a 401(k)-type pension system - something the union had fought hard to avoid. Most other Lockheed units have already moved to the new pension plans.

The International Association of Machinists and Aerospace Workers union, whose 3,600-plus members have been on strike for nine weeks, has scheduled a vote for 11 a.m. CDT (1600 GMT) on Thursday at the historic North Side Coliseum in Fort Worth, a top union official said.

The union, known as the IAM, represents Lockheed employees at the Texas plant, at Edwards Air Force Base in California, and at Naval Air Station Patuxent River, Maryland. All those workers will vote on the contract at the same time.

Lockheed, the Pentagon's No. 1 supplier by sales, announced early Sunday that it had reached a tentative deal on a revised labor contract with the union's bargaining committee during meetings Wednesday through Saturday facilitated by the U.S. Federal Mediation and Conciliation Service.

The union said it recommended members accept Lockheed's modified "last, best and final offer" after four days of "grueling" talks with Lockheed. It said the federal mediator told union negotiators this was "absolutely the best offer" the union could obtain from Lockheed at this time.

"Our strike has gone on for nine weeks, and our membership has stood strong, far stronger than anyone imagined," the union said on its website, adding that it believed "this is the very best contract proposal that we can bring to you without a much longer work stoppage with an uncertain outcome."

Lockheed welcomed the fact that union leaders had unanimously recommended ratification of the new contract. "We believe it's an industry-leading, competitive contract proposal that fairly compensates the union members," said company spokesman Joe Stout.

The modified contract would keep two of the company's current health care plans while adding a separate plan run by Lockheed, but eliminating other choices available now.

It runs for four years, instead of the three-year plan initially under discussion, giving both sides more stability at a time when U.S. defense spending is under increasing pressure.

If ratified, the agreement would end a strike that began on April 23, after IAM members rejected Lockheed's previous offer on April 22, largely over pension and health care benefits.

The IAM is among the largest industrial trade unions in North America, with nearly 700,000 active and retired members in the railroad, airline, aerospace, woodworking, shipbuilding and manufacturing sectors.

This has been the longest strike at the Fort Worth plant in recent decades, but a 1946 work stoppage lasted over 12 weeks.

Lockheed has been under pressure from the Pentagon to curb such costs, a contributor to overruns in the nearly $400 billion F-35 program for the planned purchase of 2,443 aircraft. It is the Pentagon's costliest arms purchase yet.

Three versions of the radar-evading F-35 are being built for the U.S. Air Force, Navy and Marine Corps. Eight countries helped fund the development and are in varying stages of buying it - Britain, Norway, Canada, Denmark, the Netherlands, Turkey, Australia and Italy. Japan and Israel have placed multibillion-dollar orders for the aircraft.

The F-35 is also competing with Boeing's F-15 Silent Eagle and Eurofighter - built by a consortium of EADS , Finmeccanica's Alenia and BAE Systems - for a 60-plane order from South Korea, a contract that will likely be awarded before the end of the year.

Lockheed said it hired 85 additional temporary workers at Fort Worth on Monday, bringing the total to around 500. The company is also still using about 1,100 salaried employees to do union work and some 50 non-union employees borrowed from other company facilities, according to company spokesman Joe Stout.

He said about 570 union workers had crossed picket lines to return to work, including about 280 at Fort Worth.

(Reporting By Andrea Shalal-Esa; Editing by Gerald E. McCormick, Richard Chang and Phil Berlowitz)

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