The Boeing Co. is asking the Machinists union to agree to big cuts in future pension and health care benefits in exchange for placing manufacturing work on the forthcoming 777X jet in Washington, according to details of the offer leaked to The Seattle Times through union representatives.
To secure a “yes” vote by the union’s members, the package also includes substantial cash awards, including a large ratification bonus and a generous buyout plan for workers close to retirement.
The outline of what’s under consideration suggests a major poker play by the company to cut long-term costs, using the future of airplane manufacturing in the Puget Sound area as the high stakes on the table.
While precise details might well change at the last minute —- which could mean Tuesday or Wednesday, according to those close to the talks — discussions have included a signing bonus as high as $10,000 for all members as well as a buyout that would allow retirement with boosted pension terms for those over age 58.
The take-aways include significantly higher health care premiums and, crucially, a radically changed pension plan.
The International Association of Machinists and Aerospace Workers (IAM) is the last Boeing union with a traditional pension, and the company has sought unsuccessfully in multiple contract negotiations to move new hires to a 401(k)-style retirement savings plan.
The offer would also change the wage structure so that new hires would take much longer to reach the top of the pay scale than they do today.
One machinist summed up Boeing’s strategy this way: Offer the big signing bonus to entice younger members who perhaps aren’t thinking of staying their entire working lives with the company. And use the golden-handshake early retirement package to swing the votes of those planning to retire in the next few years.
For everyone else, this machinist said, the offer is “a losing deal.”
Sources said Boeing’s offer has been subject to minimal negotiation in the secret talks that were revealed Monday.
Instead, management has laid out what it wants for keeping the 777 work in the state, with minimal wiggle room to make adjustments. Boeing executives have told the union that otherwise it will place the work elsewhere, sources said.
It’s not known how the union leadership will respond.
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