Boeing Bid Falls Short: Union

August 26, 2002 ( - Boeing negotiators put their first offer on the table Friday, but the proposed pension increase is a fraction of what union negotiators have demanded.

The aircraft manufacturer is offering to raise pension payments from a monthly contribution of $50 per year of service to $56 per year of service. The Machinists want monthly payments of $120 per year of service.  The union, which said Friday that the initial offer “missed by a mile,” notes that under the current pension plan, union members would retire on 33% of their pay, while the Boeing offer moves that only to 37% ( ). 

Hot Button

Pensions – and job security – have been a key issue for the union at Boeing, where the average machinist’s age is 47 with more than 20 years experience.  Employees represented by the Machinists make about $50,000 in annual pay, on average.  The union represents about 25,000 workers in Washington state as well as Wichita and Portland, Oregon.

The economic proposal also would allow employees to increase the amount they may contribute to Boeing’s 401(k) retirement plan from 15% to 20% of pay.  The firm would continue to match 50% of the first 8% of employee contributions.

Breaking from past practices, where pension and healthcare costs were dealt with separate from pay raises, Boeing has put together an overall “economic” package.  “All the components of any contract don’t exist in a vacuum,” Boeing spokesman Chuck Cadena told the Associated Press in explaining the shift. “We have to put an agreement in total that is fair and competitive so all those different pieces, whether it’s health care, pensions, productivity improvements – those are all related because they’re part of the same contract.”
Other Issues

Boeing’s initial offer included a 6% ratification bonus and 2.5% pay raises in the second and third years of the new contract, in addition to the pension contributions.

Boeing has proposed keeping the same formula for cost-of-living increases and the same number of paid holidays, 12. The union wanted two additional holidays.

Boeing is also seeking changes that could, depending on how much an employee uses healthcare benefits, increase the total amount employees pay in deductibles, co-payments, and other costs by an average of $350 per year, according to the AP.

Next Steps

The company is scheduled to make its “best and final” offer tomorrow, with the workers scheduled to vote two days later.  The current contract expires at midnight on September 1.

Job security, another key issue, is being negotiated separately from the economic elements.