The Buzz: So long, Abby January 18, 2013
Boeing to keep building 787s as battery fix sought January 17, 2013
Aerospace blog: Inslee: Boeing's 787 troubles are 'surmountable' January 17, 2013
SPEEA proposes Boeing contract extension in light of 787 woes January 16, 2013
That was the Society of Professional Engineering Employees in Aerospace's response Thursday to an offer Boeing leaders had called "market-leading."
The negotiating session took place as Boeing scrambled to solve an engineering dilemma: how to get the 787 back in the air after federal regulators grounded the Dreamliner over concerns with the jet's batteries.
On Wednesday, SPEEA, which represents 22,950 Boeing workers, had suggested rolling over the present contract for another four years to free the company and union members from"protracted and increasingly contentious negotiations that appear headed for a strike" so both sides could focus on the developing 787 crisis.
In a counter offer Thursday, Boeing agreed -- to a point. On compensation, Boeing said it was willing to keep in place 5 percent annual salary increases and to keep SPEEA member health-care plans in place "with no increase in employee contributions."
The union was making plans late Thursday to put the contract up for a vote, likely by early February. With Boeing and SPEEA at odds over a company-proposed two-tier pension, the union also will seek authority from members to call a strike. If SPEEA members approve concur, and Goforth is confident they will, SPEEA would give Boeing an opportunity to change its mind on the pension issue before calling a work stoppage.
Overall, Boeing said of its "best and final" offer, the average engineer would see an increase of $84,071 in pay and incentives over the life of a new four-year deal, while the average technical worker would receive an additional $64,515.
"We've done exactly what SPEEA has asked for," said Doug Alder, a Boeing spokesman. "We feel like we've gone above and beyond."
But in an effort to reduce pension costs, Boeing said it still wants to enroll future engineers and technical workers in a 401(k) retirement plan rather than the defined pension that existing union members have.
That's a sticking point for SPEEA, union executive director Ray Goforth said Thursday. The union believes the 401(k) plan is inferior. And SPEEA thinks the company could drive a wedge between members who have a traditional pension and those with 401(k) in future negotiations.
The change in retirement for new hires would enable the company to better manage expenses, Mike Delaney, vice president of engineering for commercial airplanes, said in a statement. Throughout the year-long negotiations, Boeing has underscored the need to keep costs competitive in metropolitan Puget Sound. The company needs to cut costs if it wants to invest in new technologies, Alder reiterated Thursday.
Whether that desired cost-cutting could lead to a costly and untimely strike by Boeing's engineers and technical workers is unclear.
Boeing needs the experience of SPEEA members to resolve the 787 battery problem as well as assist the Federal Aviation Administration in a comprehensive review of the Dreamliner.
Or, at least, that's what SPEEA leaders say.
"They created problems with the 787 with outsourcing," Goforth said. "Now they want to restore confidence in the 787 by outsourcing the problem-solving. That's a sad joke."
The company, on the other hand, says it has plans for dealing with those issues should SPEEA members strike. Boeing could tap engineering resources from other Boeing divisions, like defense and space.
Analyst Scott Hamilton of Issaquah-based Leeham Co. questions whether engineers are as interchangeable as Boeing implies. For example, only about 1,500 engineers and technical workers have the delegated FAA authority to sign off on jet deliveries. Those workers could all be out on strike should Boeing and SPEEA fail to reach an agreement.
"Boeing needs all hands on deck," Hamilton wrote in an email Wednesday.
In October, union members rejected Boeing's first contract offer, which included annual wage-pool raises of 2 percent to 3.5 percent over four years and required workers to pay more toward health care. Federal mediators joined negotiations in December.
SPEEA has gone on strike twice before: a one-day walkout in 1993 and a 40-day strike in 2000, which stalled jet deliveries. The union has been holding strike-preparation meetings for weeks. Besides dealing with 787 troubles, Boeing also is increasing jet production and juggling development programs like the 767-derived Air Force tanker, 737 MAX and new 787-9.
Michelle Dunlop: 425-339-3454; firstname.lastname@example.org.
Steps to vote -- and maybe strikeHere's an approximate timeline of events leading to a SPEEA vote. Dates are tentative.
Jan. 22: SPEEA's bargaining council meets for final signoff on negotiator recommendations.
Jan. 26: Union mails member ballots, which can be dropped off or mailed in.
Early February: SPEEA tallies the contract and strike authorization votes.
- To approve or reject the contract, SPEEA needs a simple 50 percent plus one.
- To give strike authority to negotiators, SPEEA needs the OK of 50 percent plus one.
A strike could be called by early to mid-February.
- The Buzz: So long, Abby 1/18/13
- Boeing to keep building 787s as battery fix sought 1/17/13
- Aerospace blog: Inslee: Boeing's 787 troubles are 'surmountable' 1/17/13
- SPEEA proposes Boeing contract extension in light of 787 woes 1/16/13