Boeing Workers Say "No" to Contract – And Strike

September 16, 2002 (PLANSPONSOR.com) - There didn't appear to be much appetite for Boeing's "best and final" three-year contract offer - nor was there sufficient interest to go on strike.

On Friday members of the International Association of Machinists (IAM) in Washington, Kansas, and Oregon voted to reject Boeing’s offer but fell short of the two-thirds vote needed to trigger a walkout. Sixty-two percent voted against the contract, but just 61% voted to authorize a strike.

“This union is a democratic organization,” said Machinists District 751 president Mark Blondin, as he announced the results to shocked union loyalists at the union’s Seattle headquarters. “Our members have spoken.”

Terms of the new contract will go into effect immediately for 25,000 workers to replace the one that expired Sept. 1.

0-For-3

In the end, the rank-and-file’s reluctance to forgo paychecks in an uncertain economy outweighed their opposition to worrisome changes in the contract or their hopes of pushing Boeing to sweeten the offer.  According to the union, a strike would have cost members some $28.1 million in pay each week.

When negotiations began in June, the IAM had said any acceptable agreement would have to include:

  • A tougher job-preservation pledge
  • A large boost in pension benefits
  • No huge increases in health-care costs

However, the final contract contains none of those provisions.  Instead, the ratified offer gives Boeing the right to replace Machinists workers with vendor labor in some parts of its factories to streamline parts delivery, a change that Boeing says will affect only about 260 workers, with no direct layoffs. The company also can do away with a strictly seniority-based system for selecting “leads” for job groups, according to the Seattle Times.

Pay Gains

Despite concerns about job security and pensions (see Boeing Boosts Pension Proposal – But is it Enough? ), under the new contract union members will receive a one-time 8% bonus averaging $4,700 apiece on November 1.  The contract also provides for 2% raises next year, and another 2.5% boost in 2004.  The average wage under the old contract was about $50,000 a year.

As is the case with a growing number of employers, workers will have to pay a larger share of health-care costs. Insurance premiums for family coverage could rise from $30 a month to about $200 in January 2004, depending on family size. Deductible and co-pays for visits to doctors and prescription drugs also will rise, although the changes are delayed until next July.

The first vote on the contract was prematurely disrupted when, concerned about the economic impact of a strike, the Federal Mediation and Conciliation Service (FMCS) summoned Boeing and the IAM to Washington, D.C. to resume negotiations (see Boeing, IAM Summoned To Washington for Talks ).

Far Apart

The distance between the two parties was evident in their description of the new pension proposal.  While Boeing characterized the change as a 20% increase in pension contribution, the IAM chose to view the new offer as providing workers just 38% of their pre-retirement income as a pension (see IAM Says Boeing’s Best Offer Not Enough ).

Triggering job concerns was the fact that Boeing has laid off 30,000 employees, a third of its commercial jet work force, and slashed production in half to match shrinking demand from airlines.  When the Machinists in the Puget Sound area, Spokane, Portland, and Wichita, Kan., last voted on a contract in 1999, the union had 44,000 eligible voters. This year, just 25,000 workers remain.

“We’re looking forward to getting back to the business of building airplanes,” said Alan Mulally, president and CEO of Boeing Commercial Airplanes. “We will continue supporting our customers and ensuring that Boeing remains a reliable and competitive supplier to the world’s airlines.”

But IAM International President Tom Buffenbarger said, “For the next three years, our members will have to work under the terms of a contract that the majority felt was inadequate. The IAM will make the best of a bad situation by doing everything in our power to protect and aggressively represent our members.”

Meanwhile, about 1,400 unionized production workers at Boeing’s Ridley Township facility near Philadelphia, which manufactures Chinook helicopters and V-22 Osprey aircraft, walked off their jobs just after midnight on Friday – with contract talks deadlocked over increased medical premium payments and proposed work rule changes, according to officials of the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW).  It was the first strike there in 28 years.


The official Boeing contract offer

Boeing updates

The  IAM’s website


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