Boeing, Machinists haggle over pensions

Published 9:00 pm Tuesday, August 16, 2005

If new Boeing Co. chief executive Jim McNerney deserves $22 million in retirement benefits, then rank-and-file Machinists deserve improvements to their pensions.

That’s the gist of what union negotiators are arguing during the contract talks down in SeaTac this week.

Boeing negotiators, on the other hand, will counter that the company already is paying one of the aerospace industry’s top pensions in a day and age when defined benefit pensions are becoming a thing of the past in corporate America.

Pensions are the No. 1 issue for Machinists union members in the current contract talks with the Boeing Co. No surprise there; the average union member is now 49 years old and retirement is weighing heavily on a lot of people’s minds.

“Everybody’s thinking about retiring, and how to survive,” said Connie Kelliher, the spokeswoman for the union’s District 751, which represents about 18,500 Boeing workers around Puget Sound, Portland, Ore., and Wichita, Kan.

The union, which has pushed for better retirement benefits in the last couple contracts, would really like to see Boeing factor in an annual cost-of-living adjustment to pensions.

Right now, retirees get $60 a month for every year with the company, which means that a worker who retires after 30 years would get $1,800 a month, about what someone earning $10.50 an hour grosses.

The major problem with that, from the union perspective, is that the payments are locked into place for life. So while taxes, prescription drugs and gasoline get more expensive, almost by the day, retiree incomes do not.

In addition to boosting the current pension program, the union also wants Boeing to contribute on behalf of workers to a union-run pension fund, and increase 401(k) contributions.

For its part, Boeing says that it’s already paying top-of-the-line pensions. Only Machinists at Lockheed-Martin, who have a new contract, get paid more in aerospace, $66 a month for each year of service. Top pensions for auto workers are significantly less, topping out at $51.65 a month per year of employment.

Besides, a Boeing pension isn’t the only income a retiree has to live on, company spokesman Chaz Bickers said. “When we talk about retirement we’d like to emphasize that it has a number of components.”

Boeing also has a 401(k)-style savings plan for employees, and it matches worker contributions, 50 cents on the dollar, up to 8 percent of a worker’s annual income. Combine that with Social Security benefits and an employee’s individual savings, and that’s a livable package, Bickers said. “We think it’s very attractive, both in the industry and the region.”

As for McNerney’s retirement package, well, Bickers wasn’t going there.

“We’ve got to keep our focus on the 18,500 people on Puget Sound and Wichita and Portland,” he said. “They’re different issues, frankly, and we’re focused on livelihoods and on what’s important to people here.”

In other negotiations news, on Tuesday, the two sides agreed to expand their joint programs. Under the new contract language, the joint program will administer apprenticeships at the company while also expanding training options.

The company and union both issued a statement saying: “New programs like the 787 and P-8A Multimission Maritime Aircraft demand new skills,” and it will be the roll of the joint programs to provide “job opportunity and career growth for employees.”

Tuesday’s talks were “businesslike,” Bickers said. “There’s good discussions. There’s substantive work being done. We’re confident we can reach an agreement that will work for everybody.”

Boeing plans to present the union with its contract offer by Aug. 30. The union expects to hold a vote on the offer on Sept. 1, the day the current contract expires.

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.