SPEEA proposes Boeing contract extension in light of 787 woes

With 787 woes piling up, the Boeing Co. faces a potential strike by the engineers and technical workers tasked with coming up with solutions on the Dreamliner.

However, Boeing could make its union troubles disappear if it accepts a proposal to extend for four years its most recent contract with the Society of Professional Engineering Employees in Aerospace, which represents 22,950 Boeing workers. The company is expected to answer SPEEA’s offer at a meeting Thursday morning.

“I hope Boeing accepts the SPEEA proposal and moves on,” Scott Hamilton, an analyst with Leeham Co., wrote in an email Wednesday.

The union pitched the idea of rolling over its contract in a meeting with Boeing on Wednesday, just hours before the Federal Aviation Administration grounded the fleet of 787s until Boeing resolves issues with the jet’s battery. The agency already had launched a rare comprehensive review of the Dreamliner.

Accepting the SPEEA’s offer would free Boeing and its workers from “protracted and increasingly contentious negotiations that appear headed for a strike,” the union said in a statement.

Boeing previously rejected the notion of extending SPEEA’s contract. In an interview with The Herald last week, Mike Delaney, vice president of engineering for Boeing Commercial Airplanes, suggested the company and SPEEA are “really not that far apart.” Later in the week, Boeing increased its wage offer to SPEEA.

But Boeing has been adamant about its plan to do away with a defined pension plan for incoming SPEEA members, offering to switch new employees to a 401(k) retirement plan that is opposed by SPEEA. It’s unclear whether Boeing will change its mind on pensions now that the company faces more problems with the 787. The company said it was reviewing SPEEA’s offer Wednesday night but gave no further comment.

Bill Dugovich, SPEEA’s communications director, didn’t comment on whether the union is using Boeing’s 787 troubles to its advantage. SPEEA worked on its proposal over the weekend, after Boeing found out it was facing an FAA review but before the agency grounded the Dreamliner.

“Our engineers and technical workers are critical to the process that’s going to correct the 787,” Dugovich said.

SPEEA members both understand the importance of restoring confidence in Boeing’s 787 and are willing to play a role in doing so, he said. But the union wants a contract that “respects our members’ contributions” to Boeing’s successes, Dugovich said.

Should Boeing reject its proposal, the union would go back to putting pieces in place “to stage a work stoppage, a strike, if necessary,” Dugovich said.

A strike could bring Boeing’s efforts to return 787s to the air to a halt and compromise the FAA’s ongoing review of the new jet.

“Any work action by SPEEA will slow resolution of the 787 issues,” analyst Hamilton wrote in an email Wednesday.

Last week, Boeing’s Delaney said the company has contingency plans for work stoppages, including bringing in engineers from other divisions within the company if necessary. Boeing CEO Jim McNerney echoed that sentiment Wednesday, saying Boeing would “make available the entire resources” of the company in response to the FAA’s decision to ground the company’s 787s.

However, that might not be how the FAA views a SPEEA strike. A work stoppage or other disruption would heighten FAA scrutiny of Boeing’s compliance with the agency’s rules, an unnamed FAA spokesperson told Reuters on Wednesday. The FAA declined to comment further on the issue.

“Right now the 787 crisis should trump all other considerations,” analyst Hamilton said. “Boeing needs all hands on deck.”

A look at SPEEA’s latest offer

On Wednesday, the union proposed extending the contract it signed in 2008 for another four years. Here’s a look at key elements of that contract as well as recent offers from Boeing:

Annual wage increases

2008 contract provided 5 percent wage pool increases over four years for engineers and technical workers.

Boeing’s last offer for engineers included 5 percent increases in years one and two, 4 percent in the last two years.

The company’s latest offer for technical workers included 4 percent increases each year, with a lump sum payment of 1 percent in the first two years.

Health care

The average SPEEA member currently pays $2,000 for health insurance.

SPEEA’s proposal would freeze the health care plan; Boeing’s would increase employee contributions, but less so than its first contract offer in September.

Retirement

In 2008, Boeing bumped pension to $83 per month for each year of service in 2012, up from $70 in 2008.

Boeing seeks to eliminate the defined pension plan for new SPEEA members, switching them to a 401(k) plan.

SPEEA’s proposal keeps the defined pension for new hires and increases pension at a rate of $2 annually to $91 monthly by 2016.

The union also demanded that Boeing recognizes same-sex survivor pension benefits pursuant to Washington state law.

Sources: Herald archives, Boeing, SPEEA

More information

• Boeing’s negotiations website: boeing.com/speea-negotiations

• SPEEA’s negotiations website: www.speea.org

More in Herald Business Journal

Boeing could help launch orbiting space station for the moon

“We should have a lunar base by now. What the hell has been going on?”

How the Airbus-Bombardier alliance could squeeze Boeing

“It makes Boeing look like they’ve been playing tic tac toe against a chess master,” says an analyst.

More self-awareness could help build a better medical system

Marcy Shimada of Edmonds Family Medicine writes the second in a series about fixing our health care system.

Scratch-and-sniff brochures aimed to prevent disaster

Puget Sound Energy has distributed more than a million scratch-and-sniff brochures to… Continue reading

Jewelry, accessories store Fuego opens second site in Snohomish County

Northwest-based jewelry, accessories and gifts store Fuego opened a new outlet store… Continue reading

Extreme cleaning company Steri-Clean opens in Mukilteo

The first Washington franchise of the Steri-Clean company will celebrate its grand… Continue reading

Justices to hear government’s email dispute with Microsoft

A lower court ruled emails in a drug case couldn’t be searched because they were in Ireland.

Negotiators give up hope of rewriting NAFTA this year

A fourth round of negotiations between the U.S., Mexico and Canada ended in mutual exasperation.

Facebook acquires TBH, an anonymous teen compliment app

TBH, short for “to be honest,” prompts users to answer polls about people they know.

Most Read