WEATHERSFIELD Boeing ends pact with RTI; CEO downplays impact
The CEO stressed the need to cut costs at RMI, where workers are locked out.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- The Boeing gravy train is over for RTI International Metals -- a lucrative, long-term contract with the aeronautics giant has expired.
Boeing has been adding $7 million or more a year to RTI's coffers since 2000, money the aircraft manufacturer was required to pay when it failed to buy the amount of titanium stipulated in its supply agreement.
Without the payment in 2003, RTI would likely have finished the year in the red instead of reporting profits of $4.7 million. Boeing used only a fraction of the contract amount last year and paid RTI $8 million.
But Tim Rupert, RTI president and chief executive, downplayed the impact. Boeing never came close to buying the amount of titanium in the contract and the aircraft maker is no longer one of RMI's major customers, he said, so the contract expiration will have little effect on operations.
The company will continue to sell products to Boeing and to other companies that supply Boeing, Rupert said.
"It's a big chunk of income we won't have anymore, but we'll have other things," he said. "It's a challenge, but that's business. That's what we do for a living."
Commenting on the company's 2003 fourth quarter and year-end financial performance, Rupert reiterated the importance of cutting production costs at RMI Titanium where about 380 unionized workers have been locked out for three months in a labor dispute. RMI is an RTI subsidiary.
He said "less than 100" of RMI's 150 salaried employees have been operating the titanium mill since the lockout began in late October. They are producing titanium, he said, and have maintained quality and safety standards.
"Part of management is to manage the shareholders' assets, and that would include keeping the plant running when we don't have another work force to do it," Rupert said. "They're trying to keep the plant competitive and viable, not just for the union work force but for the shareholders, for all the others who work here and for the communities around us."
Rupert said talks are continuing between company officials and leaders of United Steelworkers of America Locals 2155 and 2155-7, which represent the locked-out workers. They've been manning informational pickets outside the plant since Oct. 26.
Workers rejected a company contract offer which would freeze wages but would leave profit sharing, health benefits and pensions unchanged for current workers, Rupert said. Savings would come from reducing wages and health benefits for new hires and providing them with a 401(k) plan instead of a defined benefit pension plan.
"We've met with them, we're interested in finding some way to help them get over their problem," the CEO said of the union, "but there's no way we can change the rules of economics. It's not just a labor dispute, it's about keeping a balance of the inflows and outflows of business."