Everett, Wash.
Published: Friday, August 29, 2008

Machinists pore over Boeing's 'final offer'

Boeing improves its proposal, which would increase pay by 11 percent over three years

By Michelle Dunlop
Herald Writer

 EVERETT -- The Boeing Co.'s Machinists union won several concessions from the aerospace company, which presented its final offer Thursday.

"This offer represents the best package of pay and benefits in the aerospace industry," Doug Kight, Boeing vice president of human resources, said in statement.

Whether the 24,000 Machinists in the Puget Sound region agree with Kight's assessment remained unknown at press time. Union leaders were still reviewing the contract. They planned to have a recommendation to members late Thursday night or early this morning.

"We're going through Boeing's proposal page by page, line by line," said Connie Kelliher, spokeswoman for the Machinists union. "We want to make sure we understand it completely."

In its "best and final" offer, Boeing withdrew its proposal to eliminate early retiree medical benefits for new employees -- a benefit that the Machinists union has said it will strike to retain. The company also increased general wages by 11 percent over the three years of the contract and offered a $2,500 signing bonus if union members approve the contract by Wednesday.

Two-thirds of the Machinists' members would need to reject Boeing's contract offer to start a strike. If that happened, the Machinists could walk out of Boeing's factories and withhold labor beginning at 12:01 a.m. Thursday.

A strike would come at a difficult time for Boeing, which had a backlog of nearly 3,700 unfilled commercial jet orders at the end of July. That included almost 900 requests for its delayed 787 Dreamliner jet, scheduled to make its maiden flight later this year. Boeing also is trying to bring to market its revamped 747-8 jumbo jet as well as its 777 Freighter. A labor strike could push back Boeing's new programs and hurt the company financially.

That may be why Boeing relented on several proposals that the union deemed strike issues. The two sides kicked off preliminary talks in May. Boeing's Kight said at the time that the company wanted to work through as many noneconomic issues as possible prior to heading to intense negotiations at a SeaTac hotel on Aug. 21.

"We hope that our employees will recognize this as an outstanding offer by all measures," Kight said in a statement. "We encourage employees to take time to review the offer carefully, discuss it with their families, and vote in their best interest."

In its first full offer, made Aug. 22, Boeing ended its attempt to separate Wichita Machinists from the bargaining unit, which includes Machinists in the Puget Sound region and Portland, Ore.

"Wichita: They're in this family to stay," Mark Blondin, aerospace coordinator for the Machinists, told thousands of members at a rally on Sunday.

The Chicago-based company withdrew its request to swap out its traditional pension plan for a 401(k)-type retirement offering for new Machinists in its second full offer, made on Tuesday. Kight had said the company wanted to move to the 401(k)-type plan to meet the needs of its changing work force, which includes a large number of younger workers who may not retire from Boeing.

On Thursday, Boeing also dropped its bid to eliminate medical benefits for new Machinists who retire before age 65. Roughly 6,100 Boeing retirees are using the benefit. But that figure likely will grow in the next few years with nearly 43 percent of Boeing Machinists over the age of 50. Most Machinists retire between age 55 and 62.

Boeing spokesman Tim Healy has said the company sought to eliminate the benefit out of fairness to the majority of the rest of its work force. The company already has discontinued the benefit to many of its new employees, including its engineers union. The Society of Professional Engineering Employees in Aerospace begins initial contract talks with Boeing on Sept. 10, and union leaders say they have been expecting Boeing to help with an alternative plan for retiree medical benefits.

Outsourcing also has proved to be a hot topic of discussion between the company and union. Boeing said on Thursday that it met the union's demands on facilities maintenance subcontracting. The company had thought its second offer met the Machinists' demands on outsourcing enough to avoid a strike over the issue. The union disagreed.

The Machinists had wanted further assurances on materials delivery work. The union also hoped to strengthen its position in reviewing future work the company wants to outsource.

"We have the leverage to make some significant gains in job security," Kelliher said in an interview with the Herald on Tuesday.

The Machinists went on strike against Boeing for 28 days in 2005. Ten years before that, in 1995, the union withheld labor for 69 days. In total, the Machinists have staged six strikes against Boeing. Its longest strike, and first, came in 1948 and lasted 140 days.

Boeing's shares, which have declined more than $40 in the past year, rose $1.82 to close at $66.34 on Thursday.



Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.
© 2009The Daily Herald Co., Everett, WA