Boeing & Aerospace
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Boeing raises its offer to the Machinists to try to end the strike
Sep. 23, 2024 at 11:00 am Updated Sep. 23, 2024 at 12:25 pm
As a car passes by, Boeing Machinists union members and others picket in front of the Boeing Renton factory at Logan Avenue North and North 10th Street on Sept. 16. The strike began Sept. 13. (Ellen M. Banner / The Seattle Times)
By
Dominic Gates
Seattle Times aerospace reporter
Boeing substantially raised its contract offer to the Machinists union Monday in an effort to end the strike that threatens to damage the company.
The new offer was delivered about 9 a.m., via telephone to the Machinists negotiating team and then electronically, said Boeing’s chief negotiator, Mike Fitzsimmons.
“This the largest offer we’ve ever offered this union or any other union,” Fitzsimmons said in an interview. “We hope it addresses the concerns of both the union and the members, and we hope they vote it soon.”
Boeing said the new offer would boost average annual pay for machinists from $75,608 today to $111,155 in four years.
The timing of the offer is clearly aimed at bringing the work stoppage to a rapid end as the first impacts from striking loom for union members.
They will soon miss their first full paycheck and will lose their company health care coverage at the end of this month if the strike continues.
Fitzsimmons said new Boeing CEO Kelly Ortberg was “heavily involved” in coming up with the new offer.
Boeing vice president Peter Johnson, who heads the fabrication unit and was a key member of the contract negotiating team, in an interview laid out why Boeing wants a fast end to the strike.
“The sooner we get those people back, shoulder-to-shoulder with us, working through building the airplanes and getting through the problems we have, the better off we all are,” Johnson said.
The new offer increases wages by 30% over four years, up from 25% in the offer the Machinists rejected. That consists of a 12% raise immediately, and 6% each year in the remaining three years.
And the annual bonus that was taken away in the earlier offer — essentially reducing the expected pay increase well below 25% — is restored.
That adds a variable additional bump to pay generally worth around 4% each year.
More on Boeing and the Machinists strike However, since the amount of that annual bonus is based on productivity and quality metrics, the 2025 bonus paid next February would certainly be very much lower. Production has slowed to a crawl this year after a serious quality lapse caused the Alaska Airlines fuselage door plug blowout in January.
Boeing’s new offer also doubles the signing bonus so that each Machinist would get $6,000 upon ratification.
Johnson said the new offer is a response to broad rejection of the first one.
“It was clear when the first vote occurred that there was a disconnect between what we thought we had achieved in the tentative agreement and where we are today,” Johnson said Monday. “We’ve listened. We’ve heard the feedback from multiple sources, and we’re making our best effort to balance the realities we have in our business today with promoting the team that builds these magnificent airplanes.”
The new contract proposal does not restore the traditional defined-benefit pension, as many Machinists had hoped. Fitzsimmons indicated that was not even considered.
“There is no scenario where the company reactivates a defined-benefit pension for this or any other population,” he said. “They’re prohibitively expensive, and, really, that’s why virtually all private employers have transitioned away from them to defined-contribution plans,” referring to 401(k)-type retirement savings plans.
Rather than revert to the former retirement plan, the new offer adds another 2% of company contribution to each employee’s 401(k), increasing that to a total of up to 12% of base pay.
That consists of an automatic company match of 4% of base pay plus a match of employee contributions up to 8% of base pay.
The previous offer had also included an additional Boeing contribution to retirement savings, presented as compensation for the lost bonus, but with those funds going into an International Association of Machinists union 401(k) plan rather than the existing company plan for each employee.
Many machinists reacted with suspicion to this detail of their money going into a union pension fund, speculating that it was a financial incentive to the union to recommend the first offer.
So that provision is scrapped; the extra retirement savings contribution in the new offer goes into the existing Boeing 401(k).
The constitution of the International Association of Machinists requires the union to put this offer to a new vote. It will likely be this week.
In the contract letter sent to the union leaders Monday morning, Boeing states that the new offer is “contingent upon ratification by 11.59 p.m. Pacific time” this Friday.
Fitzsimmons said that because the union leadership had initially agreed to the previous offer pending a vote of its members, it was never officially a “best and final offer.” He put that label on the new proposal.
“We weren’t forced to put down a final offer last time,” Fitzsimmons said. “This is a best and final offer.”
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Boeing Machinists counted votes at the Machinists Union headquarters in South Park on Thursday night. The union members rejected the company's contract offer with 96% voting to strike. (Lauren Rosenblatt / The Seattle Times)
All other terms of the previous contract offer stay the same, including the commitment to build Boeing’s next new jet in the Puget Sound region.
Dominic Gates: 206-464-2963 or dgates@seattletimes.com; Dominic Gates is a Pulitzer Prize-winning aerospace journalist for The Seattle Times.
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