EVERETT — Boeing hit record highs for airplane deliveries and profits in 2014, but workers won’t be getting the maximum amount possible for performance bonuses for last year.
In all, the aerospace giant will pay out about $269.3 million later this month to eligible employees in Washington and Portland, Oregon.
While Boeing workers aren’t getting the maximum payouts, which they did in their 2013 bonuses, they are getting more than the minimums.
About 34,000 members of the Machinists Union at Boeing are getting approximately $77.9 million.
Roughly 42,000 non-executive, white-collar workers are splitting $191 million under the Employee Incentive Plan. Individual bonuses are equivalent to slightly more than 12 days of additional pay.
Eligible workers in Boeing Commercial Airplanes get 12.25 days. It’s 12.5 days for Boeing Corporate, including Engineering, Operations and Technology. And it’s 12.75 days for Boeing Defense, Space and Security.
Given the Chicago-based company’s banner year, plenty of Boeing workers were upset that the payouts were below the maximum amount.
The head of Boeing Commercial Airplanes, Ray Conner said in an email to workers that he “can understand” some employees’ “disappointment regarding the Employee Incentive Plan payout for 2014.”
The payout “is based on how well we perform to BCA’s business plan,” he said.
The company’s commercial division faced challenges last year, mostly from its 787 Dreamliner and KC-46 aerial refueling tanker programs, he said.
“We were behind schedule on airplane deliveries and broke our commitment dates to customers,” he said in the email. “We had lower-than-planned operating earnings on the 787 program and needed to spend more cash in our effort to stabilize the production system.”
Despite those drags, “the team exceeded performance and productivity targets in other parts of BCA,” and helped the division hit its business goals, Conner said.
Under the company’s Aerospace Machinists Performance Program, Machinists at Boeing will get bonuses worth 3.1 percent of their annual earnings, which averaged $74,000 in 2014. The average payment is $2,294, which adds up to a total payout of $77.9 million.
The $10,000 bonus Machinists got last year for approving a long-term contract that also ensured Boeing’s 777X will be assembled here was not included in the annual earnings, according to the company.
The payments, which max out at 4 percent of annual earnings, are based on improvements in productivity, quality and safety. Productivity counts for 50 percent of the payout, quality for 30 percent and safety for 20 percent.
Safety performance was “significantly under target,” productivity was “near-maximum payout” and quality hit “maximum payout,” Alan May, BCA’s vice president of human resources, said in an email to Machinists on Friday.
In November, Boeing had projected Machinists would get 2.8 percent payouts for 2014.
On Wednesday, Jon Holden, head of the International Association of Machinists and Aerospace Workers’ District Lodge 751, which represents about 32,000 Boeing workers in metro Puget Sound and Portland, told union members in an email that union leaders “feel that it’s essential that the AMPP payout adequately reward our members for the outstanding work they did in 2014, which led to Boeing’s record commercial airplanes deliveries and overall corporate profits.”
District 751 officials were talking with Boeing about some specifics in how the company was calculating the payouts, he said in the email. Prior to Friday’s announcement, the union was “working to identify ways to raise the AMPP payout.”
How the payouts are calculated was already negotiated early last year, said Paul Bergman, a Boeing spokesman. All that remained, essentially, was to do the math.
To get the full amount this year, workers had to improve productivity by 10 percent, quality by 16 percent and safety by 16 percent.
According to May’s message to workers, Machinists improved quality by 16.07 percent, productivity by 9.3 percent and safety by 2.2 percent.
The incentive was created in the 2011 contract between Boeing and the IAM. The first payout, which covered the second half of 2012, was 3.1 percent. Machinists did get the maximum 4 percent bonus for 2013, which was paid out early last year.
Representatives from Boeing and Machinists will soon start negotiating the targets for the 2015 AMPP payout.
Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.
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