Details: Boeing’s 777X offer to Machinists

EVERETT — Boeing Co. factories in Washington and Portland will be buzzing over the coming week with talk of a proposed Machinists contract extension that ensures work on the 777 in Everett for 11 more years — but at a big cost in benefits. Union members will vote next Wednesday, Nov. 13.

The International Association of Machinists and Aerospace Workers (IAM) released a detailed summary of the tentative deal early Wednesday. It includes an end to the traditional pension IAM workers receive, a new 401(k)-like retirement fund with a company contribution and increased employee health-care costs.

On the bright side, Machinists will get a $10,000 signing bonus and could retire at 58 with full benefits. And Boeing promises to build the revamped 777X at Paine Field and its new carbon-fiber-composite wings in metro Puget Sound.

If early reaction on the Web is an indicator, those pluses might not be enough to ensure approval. On a union Facebook page, Machinists were expressing mostly outrage at the proposal’s shortcomings.

Some 23,000 members of Seattle-based District Lodge 751 — assembly mechanics and others who do the bulk of Boeing’s manufacturing — will vote for one day at various locations. If a simple majority votes to accept, the proposal becomes effective immediately. IAM members will receive a $10,000 signing bonus within 30 days and the contract is extended to Sept. 12, 2024. Otherwise, the current contract remains in effect until Sept. 8, 2016.

The conversations and arguments among union members in coming days will likely reflect these two points of view:

• Acceptance will erode benefits the union has fought hard for over the decades. Boeing’s ability to build a substantially new airplane somewhere else, like North Charleston, S.C., where it has a second 787 assembly line, is overrated, and the union should hold out for a better deal. The present contract runs for almost three more years.

• Rejection means Boeing will build the 777X elsewhere, and as the current model is phased out by the end of the decade some 19,000 777-related jobs in Washington will vanish. The benefits the company proposes are still quite good compared to those of other employers, and the region’s economy hangs in the balance.

In a letter to union members, District 751 President Tom Wroblewski and Robert Petroff, the local’s assistant directing business representative, don’t recommend a vote one way or another. But they quote Boeing as saying the proposal “will create job growth in Puget Sound and Portland for the next 25 to 30 years while allowing them to be competitive.”

“If this contract is ratified, new buildings totaling over 1.5 million square feet will be built to house the 777X final assembly and 777X wing production securing wide-body production in Everett,” the letter states.

The precise promise Boeing makes is in the form of a letter of understanding attached to the contract:

“The company will perform the final assembly of the 777X including 777X-8, 777X-9, and 777X-Freighter in Everett. The 777X wing fabrication and assembly work will be performed in Puget Sound.

“The parties agree that the company may subcontract or outsource certain 777X wing fabrication and assembly work packages, in whole or part, in order to create capacity for other 777X work packages in the Puget Sound facilities, and/or to efficiently utilize those facilities to accomplish the production and assembly of the 777X.”

Also, Boeing would be allowed “to subcontract or offload work due to lack of capability or capacity, to subcontract or offload work to prevent production schedule slippage, or to temporarily subcontract or offload work due to emergent short term needs.”

The cost of that promise includes these changes, effective next week if Machinists approve the pact:

• Pension accrual will end in 2016, and all employees with that plan will be fully vested. The company will begin contributing to a new retirement investment fund, essentially a 401(k), at varying rates: 10 percent of pay in 2016 and 2017, 6 percent in 2018, and 4 percent thereafter.

• Workers participating in a present 401(k) plan will get increases in the company’s match.

• Starting in 2016, workers 58 and older may retire with the full benefits of the old pension.

• New employees or rehired workers will receive a company retirement contribution of 4 percent.

• There will be increased employee premium contributions, higher deductible levels and greater co-pays for medical insurance.

• There will be 1 percent general wage increases in 2016, 2018, 2020 and 2023. Additional cost-of-living increases continue as before.

Says the union’s letter introducing the proposal: “Brothers and Sisters: Today we are at a crossroads. Together we must choose what is best as a union, as individuals and as a family.”

On the District 751 Facebook page, the early reaction to the proposal’s details was downright hostile. Nearly all of the hundreds of posted comments were critical of the deal, of how it was quietly struck behind the scenes, of the short time frame in which to decide — or all three.

One commenter harkened back to 2011, when union members approved a similar proposal — the existing contract — that ensured that the 737 Max would be built in Renton.

“When we voted for the current extension, we screwed up,” he wrote. “We didn’t understand that Boeing was going to come back with each and every new product launch demanding a takeaway extension, between contracts, when we have no strike authorization tempering those takeaway demands. … We will probably not make it three or four years before Boeing wants to junk this deal and take away even more.”

Another suggested that Boeing and the union’s leadership “want us to turn down this offer. It is just too far off the charts to believe. They have no doubt already made the decision to build elsewhere.”

One of the few commenting supporters of the contract extension pointed out that for now, at least, the union has no ability to leverage a better offer with threat of a strike.

“We are still in our current contract,” she noted. “If we don’t accept this Boeing can do whatever it wants for the next three years while we are still under contract. That gives them three years to build a new factory on the 300 acres they bought in South Carolina and to train a new workforce. Then in 2016 they can lay us all off and we end up with no medical and no pension anyway. This contract isn’t great but at least I’ll keep my job.”

Chuck Taylor: 425-339-3429;

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