Machinists will be asked on Wednesday to pick job security over potentially heftier pay raises and lower health care premiums when they vote on a labor contract extension with the Boeing Co.
Last week, company and union leaders announced a far-reaching tentative agreement: Boeing will guarantee 737 MAX work in Renton while the Machinists will ask that a labor case against the company be dropped. The deal is only good if Machinists approve a contract extension.
Boeing and Machinists’ leaders say the deal promises job security and a more positive relationship between the union and company. Union members are scrutinizing the details. For some Machinists, the financial details don’t necessarily pencil out.
More union members are enrolled in Boeing’s traditional medical plan than either of the other two health insurance plans offered. Under the existing traditional health plan, Machinists don’t pay a monthly premium. The new contract would cost a Machinist about $3,341 to insure his family under that same plan over the life of the contract. A Machinist would pay $1,113 for individual insurance.
The extension, compared to the 2008 contract, offers lower annual pay raises and guaranteed bonus pay. The extension provides a 2 percent annual increase in salary as well, compared to increases of between 3 percent and 5 percent annually in the last contract.
Machinists will receive a $5,000 signing bonus under the extension and be enrolled in an incentive plan, which could pay between 2 percent and 4 percent of their annual salaries. A Machinist making $60,000 annually could receive between $1,200 and $2,400 in incentive pay each year.
In 2008, Machinists also received signing bonuses of $5,000, or 10 percent of their average salaries, whichever was greater. They got lump sum payments of $1,500 in 2009 and 2010.
However, the average Machinist in 2008 lost more in salary during the 57 days of the strike than he or she made up in the signing bonus and lump sum payments. The contract extension averts a strike.
In a message to employees on Friday, Boeing’s Jim Albaugh sought to dispel concerns over whether the contract truly offers job security.
“Let me be as clear as I can possibly be: If this agreement is ratified, the MAX will be built in our Renton factory,” he wrote.
How does contract offer compare to 2008 deal
2008 CONTRACT
This contract began Nov. 2, 2008 and expires Sept. 8, 2012.
Pay raises
• 2008: 5 percent
• 2009: 3 percent
• 2010: 3 percent
• 2011: 4 percent
• Continued to receive cost-of-living pay adjustments.
Bonuses, incentive pay
Signing bonus: $5,000 or 10 percent of annual salary, whichever is greater.
Note: In 2008, the average Machinist made $62,000 annually and lost roughly $10,000 in pay during the strike but received a signing bonus of $6,200.
• 2009: $1,500 bonus
• 2010: $1,500 bonus
• 2011: No bonus
• No incentive payment.
401k/VIP
Continues the same.
Pension
• Two increases of $2 monthly over the life of the contract.
• 2009: Increased to $81 monthly per year of service.
• 2012: Increase to $83 monthly per year of service.
Retiree medical benefits
Remains in place for existing members and those hired during the contract.
Health insurance
Health care was frozen at its 2005 level, which includes a plan that allows members to pay no monthly premium.
2011 CONTRACT EXTENSION
The proposed contract would extend until Sept. 8, 2016. Items not specifically called out in the extension remain the same from the 2008 agreement.
Pay raises
• 2012: 2 percent
• 2013: 2 percent
• 2014: 2 percent
• 2015: 2 percent
• 2016: No general pay raise through Sept. 8, 2016.
• Will continue to receive cost-of-living pay adjustments.
Bonuses, incentive pay
• Signing bonus: $5,000.
• No guaranteed bonuses through the life of the contract.
• Incentive pay: 2 to 4 percent of gross earnings annually with first payout in 2013.
• The incentive pay program is similar to the one Boeing’s St. Louis Machinists have. Union members there make a lower average wage, the Machinists said. The average payout for the last five years in St. Louis has been $1,416 annually.
401k/VIP
Continues the same.
Pension
• Yearly increases of $2 monthly over the life of the contract.
• As negotiated in 2008, pension rises to $83 monthly per year of service in 2012, increasing by $2 annually to $91 in 2016.
Retiree medical benefits
• Remains in place for existing members and those hired during the contract.
Health insurance
Boeing offers three health plans. Regardless of plan, all members have to participate in a wellness program or beginning Jan. 1, 2013, will pay a monthly fee of $20 for an individual or $40 for a family for failing to participate in the program. More Machinists belong to Boeing’s Traditional Medical Plan than any other plan. The following applies only to that plan.
• Monthly premiums go from zero to $20 for individual, $60 for families in 2013, increasing at a 10 percent rate each year. By 2016, the monthly premium for traditional plan members will be $26.62 for individuals and $79.86 for families.
• Over the life of the contract, a Machinist enrolled in Traditional Medical will pay $1,113.84 as in individual for premiums and $3,341.52 as a family for premiums. This does not include an extra fee for failing to participate in the wellness program.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
