Boeing Deal Falls Short on Pension Demands

May 31, 2001 ( - Boeing and the International Association of Machinists and Aerospace Workers (IAM), a union representing 3,200 machinists at its St Louis plant have reached agreement on pay increases, but pension demands have not been met.

The deal would give the machinists, three consecutive annual raises of 3%, 4% and 4%, a $1,200 signing bonus and better job security, but does not increase Boeing’s original pension proposal, which machinist argue, is lower than that offered at other Boeing plants.

Earlier Proposal Rejected

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Members, who claimed that wage and pension proposals were too low and medical costs were too high, rejected an earlier proposal. The previous offer also lacked a signing bonus. Further, union members objected to plans to combine certain job classifications, which would force some workers to perform a range of functions.

Boeing has steadily reduced its St Louis work force since 1998. Many machinists, who are age 49 on average, would take early retirement but are reluctant to do so because of the company’s unfavorable terms.

The new proposal cuts a retirement incentive to $3,000 from $6,000 and fails to provide significant improvement over Boeing’s proposal on health care costs, which are slated to rise. Nevertheless, union negotiators are recommending that members vote to approve the deal on Sunday.

A simple majority vote in favor would seal the deal. But if the proposal is rejected, a strike could begin Monday.