Boeing, engineers union terms look strong as vote deadline nears

EVERETT — Members of the engineers union at the Boeing Co. are reading through the fine print and voting on a six-year contract proposal.

The proposed terms substantially change health and retirement benefits, while keeping wages above the market average for engineers and other white-collar workers represented by Society of Professional Engineering Employees in Aerospace (SPEEA).

Errors with printing and mailing ballots delayed voting, which ends 5 p.m., Feb. 17. SPEEA’s two biggest bargaining units are voting on contracts — 14,169 engineers in the union’s Professional Unit and 6,024 technical workers in the Technical Unit.

Union staff have held several workshops to answer members questions about the proposed terms.

“At each meeting, it seems like the vast majority of people in the room are going to vote yes,” SPEEA Executive Director Ray Goforth said.

If the proposal is approved, it will be retroactively effective to Feb. 11, the day after the original voting deadline. It will not affect the timeline for some changes, such as those to health and pension benefits, which are being phased in at later dates.

Regardless of how SPEEA members vote, it is not a simple decision for many.

The proposed contract came out of secret negotiations between the company and the union. Both sides committed to a streamlined, collaborative approach that set aside much of the posturing and saber-rattling that can bog down labor contract bargaining.

That approach would not have happened without approval from Boeing CEO Dennis Muilenburg, Goforth said.

The mood during negotiations was focused on finding solutions that work for both sides, said Todd Zarfos, a vice president and one of the top engineers at Boeing Commercial Airplanes. He has represented the company in negotiations with SPEEA since 2002.

The proposal includes what is called a soft freeze of members’ pension benefit. How much the pension pays out is driven by how many years a union member is at Boeing and that member’s average wages. Under the proposed terms, SPEEA members would stop accruing service years in 2019, but their wages after that point would be factored into their retirement payouts.

The terms also increase how much Boeing puts into members’ defined contribution plans, commonly called 401(k) retirement plans.

Those are much better terms than other Boeing employees have gotten in recent years, Goforth said. “It’s 66 percent to 77 percent of what you would get if the pension was not affected. Others have gotten about 40 cents on the dollar.”

Like many American corporations, Boeing has moved away from pensions, which carry long-term costs that investors dislike.

The proposed contracts change health benefits, shifting more costs to workers.

“The purpose isn’t simply cost-shifting,” though, Goforth said. “The purpose is to drive people to make better healthcare decisions.”

The contract also makes it costlier for Boeing to move work away from Washington. If that happens, the company will “do everything possible to find other work” for any affected SPEEA members, Zarfos said.

In the proposals, Boeing promises to spend four months trying to reassign affected workers; if unsuccessful, Boeing agreed to significantly increase the involuntary layoff benefit. That payout would be a minimum of 26 weeks of pay, up to 60 weeks. Currently, 26 weeks is the ceiling for the payout.

The terms do not prevent Boeing from moving work, Goforth said. “Boeing just has to throw money at it.” The point, though, is to make it more financially painful to move jobs, he said.

Boeing has moved about 4,000 engineering jobs out of the state since 2012.

Company execs told SPEEA officials that those moves will be much rarer going forward, Goforth said. “I believe them” that they feel the company has adequately repositioned its workforce and is focused on doing work where people are now.

Increasing the involuntary layoff benefits also sends a signal to Boeing’s middle management ranks that execs are not interested in drastically shifting work unless there is no other option, he said.

Nevertheless, Boeing lobbied against a proposed bill by Rep. June Robinson (D-Everett) in the Legislature to tie the state’s aerospace industry tax benefits to job numbers. The bill was defeated in committee earlier this month.

“It is vastly disappointing to see some legislators ignore their colleagues and their constituents so blatantly,” SPEEA President Ryan Rule said in a statement after the vote. “With more than 4,000 jobs lost — including nearly 3,000 good engineering and technical jobs already moved from Washington since aerospace incentives were extended; how many more jobs must be lost before something is done?”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com