EVERETT — The unions representing the Boeing Co.’s engineers and machinists kept an eye on contract talks between the nation’s autoworkers and General Motors.
Both unions, which collectively represent more than 45,000 workers in the Puget Sound region, begin negotiations with Boeing next year. And both say health care and pension benefits will be top priorities for their new three-year contracts in 2008. GM shifted billions of dollars worth of health care costs to the union, in an effort to make the automaker more competitive with its Japanese competitors.
Undoubtedly, Boeing stands in a better position in the aviation industry than does GM in the auto market. While Boeing pulled down the No. 2 spot the last few years, the plane maker intends to surpass rival Airbus in jet deliveries next year. Boeing snagged more commercial jet orders than its European competitor in 2006 and seems poised to keep its lead this year.
Meanwhile, GM posted a loss of $2 billion last year as the company was restructured. The Detroit auto company entered into the contract talks with the position that it needed to cut the $25-per-hour labor cost differential between it and Japanese companies. Prior to the new contract, GM has said it pays workers $73.26 per hour in wages and benefits.
And that’s why Boeing’s labor groups aren’t too concerned that the GM-United Auto Workers contract will set a precedent for union contract talks in 2008.
“It’s a different union, a different situation,” said Bill Dugovich, communications director for the Society of Professional Engineering Employees in Aerospace.
A spokeswoman for the local district of the International Association of Machinists echoed Dugovich’s sentiment.
“They’re just in such a different situation,” said Connie Kelliher of the Machinists.
During the Machinists’ last contract talks with Boeing in 2005, union members went on strike for 28 days. In the end, the Machinists signed a contract that increased pension benefits, maintained retiree health care while extending the health coverage from the previous contract, and negotiated bonuses instead of wage increases.
SPEEA’s engineers also have walked off the job over a contract dispute. The engineers staged a 40-day strike against Boeing in 2000. Without an executive director since July 10, the engineer’s group intends to have a new leader in place later this year.
The Aerospace Industries Alliance estimates aircraft manufacturers pay an average of $54.91 per hour in wages and benefits to workers. While Boeing’s commercial jets tend to carry a slightly heftier price tag than those of rival Airbus, the U.S. plane maker certainly isn’t hurting for business with a backlog of more than 2,923 unfilled orders.
Fueled by the popularity of its new 787 Dreamliner jet, Boeing’s future, and its stock, is on the rise. Contract negotiations come at a key point in Boeing’s quest to overtake Airbus.
The jet maker plans to deliver its first Dreamliner in May 2008, all the while looking for ways to speed up production of its globally built, fuel-efficient 787. By 2010, Boeing has two additional 787 models to bring to market as well as its 777 Freighter and 747-8.
Even though the unions consider themselves to be in good positions going into negotiations with Boeing, both labor groups will watch how Boeing handles benefits. Neither the Machinists nor the engineers can remember Boeing ever formally presenting a deal similar to GM’s.
“We’re always concerned with health care and pensions,” Dugovich said.
The Associated Press contributed to this report.
Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.
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