The Boeing Co. has made its second full contract offer to the Machinists union today, agreeing to withdraw its request to eliminate pension for new employees.
The aerospace company hopes to avoid a labor strike at a critical point in the manufacturing of its new 787 Dreamliner. The company offered pay increases of 9 percent over three years and a 5 percent lump sum payment in the first year.
The union will vote on Boeing’s final offer, due out before Labor Day, on Sept. 3. If two-thirds of the Machinists reject the offer, the 24,000 Machinists in the Puget Sound could strike at 12:01 a.m. Sept. 4.
The company said on Tuesday that it had eliminated three out of four of the issues the Machinists said they would strike over. Boeing said it had met the union’s demands on pension for new employees, on retaining Wichita in the bargaining unit and on outsourcing.
The company however still seeks to eliminate early retiree medical benefits for new Machinists. That’s an issue the Machinists have said they’ll strike over. The union staged a 28-day strike in 2005.
The union, Tuesday afternoon, said that two, not one, topics remain up for negotiations. The Machinists want more guarantees on outsourcing in order to avoid a strike.
“There are still deal breakers on the table,” the union said.
Boeing’s other engineering union, SPEEA, agreed to opt out of the early retiree medical benefits progrgam for new employees during its last negotiations in 2005. However that union is still seeking an agreement with the company on an alternative plan for health insurance benefits for new engineers and technical workers. SPEEA heads into contract talks with Boeing later this year.
A breakdown of the offer follows.
General wage increases: 4 percent in the first year, 2.5 percent in years two and three.
Cost of living adjustments: 1.5 percent in first year, 0.8 percent in year two, 0.5 percent in year three.
Lump sum payment: 5 percent in the first year.
Incentive program: First payout in third year would be 10 days pay for meeting targets.
Pension: Boeing no longer seeks to eliminate the traditional pension plan for new Machinists. The monthly payment for each year of service will increase to $78, up from the exisiting rate of $70 and $75 in the first offer.
Early retiree health insurance: Boeing would eliminate this benefit to new Machinists hired after Jan. 1, 2010.
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