...Labor's Ideal Deal
Jun 10, 2007
New Labor Strikes Deals With 'Private Equity Guys'
The Washington Post
June 10, 2007
By Dale Russakoff and David Cho
A model deal in the eyes of the labor movement was a buyout of three faltering Boeing factories by Onex Corp. of Toronto. Onex managing director Nigel S. Wright said his team told workers exactly what it wanted from them: a reduction of 1,700 of 10,300 jobs, elimination of long-standing work rules and a 10 percent pay cut. The Machinists and United Auto Workers unions named their price: "skin in the game," or a share of the profits when the company went public. Both sides signed off in June 2005.
The rebound came far sooner than anticipated. Revenue soared as the new company, Spirit AeroSystems, won contracts for the new Boeing 787 and also from Sikorsky Aircraft and Airbus. When Spirit went public in November 2006, workers who took the pay cuts each got checks averaging $30,000 plus 1,000 shares of Spirit stock, now worth $34,000. Another beneficiary was the Machinists' pension fund, which was an investor in Onex all along.