Boeing makes final offer to Machinists

The Boeing Co.’s Machinists union won several concessions from the aerospace company, which presented its final offer this morning.

In its “last, best and final” proposal, Boeing withdrew its request to eliminate early retiree medical benefits for new employees – an issue that the Machinists union has claimed it will strike to retain. The company also increased general wages by 11 percent over the three years of the contract and offered a $2,500 signing bonus if the union approves the contract by Sept. 3.

“We hope that our employees will recognize this as an outstanding offer by all measures,” said Doug Kight, Boeing’s lead negotiator. “We encourage employees to take time to review the offer carefully, discuss it with their families, and vote in their best interest.”

The Machinists said earlier this morning that they were carefully reviewing Boeing’s offer.

The labor group, which represents 24,000 Machinists in the Puget Sound region, will vote on Boeing’s offer on Sept. 3. If two-thirds of the members reject Boeing’s proposal, the Machinists could walk out of Boeing’s factories and withhold labor beginning at 12:01 a.m., Sept. 4.

The aerospace company had a backlog of nearly 3,700 unfilled commercial jet orders at the end of July. That included almost 900 requests for its delayed 787 Dreamliner jet, scheduled to make its maiden flight later this year. Boeing also is trying to bring to market its revamped 747-8 jumbo jet as well as its 777 Freighter. A labor strike could both push back Boeing’s new programs and hurt the company financially.

Prior to the final offer, Boeing already had removed several “strike” issues from its proposal, including an attempt to separate Wichita Machinists from the bargaining unit and a request to swap out its traditional pension plan for a 401(k) type retirement offering for new Machinists.

Outsourcing also has proven a hot topic of discussion between the company and union. Boeing said on Thursday that it met the union’s demands on facilities maintenance subcontracting. The company had thought its second offer met the Machinists’ demands on outsourcing enough to avoid a strike over the issue. The union disagreed.

“We have the leverage to make some significant gains in job security,” said Connie Kelliher, in an interview with the Herald on Tuesday.

Pension: Boeing upped its monthly pension contribution to $80 per year of service, an increase from $70 in the existing contract. The company withdrew on Tuesday its request to eliminate pension for new Machinists.
Lump sum payment: Union members would get a lump sum payment of 6 percent of annual pay, or $2,500, whichever is greater.
Incentive plan: The Machinists would be included in an employee pay plan. The first payout, ranging between 0 to 20 days pay, would be in the thrid year of the contract.
Minimum pay rates: Entry level wages would increase $2.28 per hour for each pay grade. That’s the same increase Boeing proposed in its second offer to Machinists.
Health insurance: Boeing would continue to offer a “no cost” option to employees. It increased coverage on routine physical exams, bumped the lifetime benefit maximum to $2 million from $1.5 million and provide coverage for same-gender domestic partners.

The Machinists went on strike against Boeing for 28 days in 2005. Ten years before that, in 1995, the union withheld labor for 69 days. In total, the Machinists have staged six strikes against Boeing. Its longest strike, and first, came in 1948 and lasted 140 days.