SPEEA abandoned talks, Boeing says

Boeing Co. officials on Tuesday called a move by engineering union leaders to reject the company’s contract offer an “unprecedented departure” from normal negotiations.

On Monday, leaders for the Society of Professional Engineering Employees in Aerospace, or SPEEA, voted unanimously to send Boeing’s offer to members for a vote, urging them to reject it.

“The SPEEA negotiations team, for their own reasons, made a decision to cease negotiations and use this unconventional approach,” Boeing said in a statement attributed to six engineering executives.

SPEEA represents 22,765 members in the Western Washington region. The union-represented engineers and technical workers are responsible for designing and testing Boeing aircraft and components, among other things.

Boeing officials were willing to continue contract talks with the union this week, the company said in the statement sent to union members. The union’s summary of the company’s offer “misrepresents components of our proposal, and we sincerely hope this reflects a misunderstanding or a miscommunication rather than a deliberate distortion.”

Over the next few days, the Chicago-based aerospace company will work to “clear up any confusion created by the absence of meaningful discussion,” Boeing leaders wrote in their message.

Less than an hour later, Ray Goforth, the union’s executive director, emailed SPEEA members, telling them, “you’ve just received an email from Boeing actually complaining that the members are getting to vote on the offer.”

Boeing offered 3.5 percent annual increases to a “wage pool” for engineers, who make $110,000 annually on average, and 2 percent to 3 percent wage-pool increases for technical workers, who earn an average of $79,300 annually. Union leaders called them the worst wage increases since 1975. The present contract, which expires Oct. 6, provided both engineers and technical workers with 5 percent increases annually. SPEEA had asked for 7.5 percent increases.

The company also asked members to pay more for health insurance beginning in 2014. Lastly, Boeing increased the pension benefit for existing SPEEA members by 9.6 percent over a four-year contract but proposed a 401(k) plan, rather than a defined pension, for new members.

“There is nothing in this offer worth accepting,” Goforth said in a statement Tuesday. “This offer is so terrible it’s important for our members to see it and let Boeing know directly what they think.”

Boeing, meanwhile, stuck with an earlier claim that the offer was “market-leading.”

The union is negotiating its new contract during a record production increase for Boeing. The planemaker plans to boost output 60 percent over four years. It is working through a backlog for the 787 Dreamliner that mushroomed amid more than three years of delays and is developing new variants, such as the 737 MAX.

“This is not the time Boeing needs this to happen,” said Carter Leake, a Richmond, Va.-based analyst at BB&T Capital Markets. “Boeing has its hands full, and these are the type of issues it probably wishes were not occurring.”

SPEEA members could be planning to slow down the pace at Boeing by strictly adhering to work rules, analyst Scott Hamilton of Issaquah-based Leeham Co. suggested on Tuesday. The tactic, called a “work-to-rule” campaign, means that workers refuse voluntary overtime and follow existing policies even if workers know how to do a task faster. SPEEA engineers implemented a “work-to-rule” policy at Boeing in Wichita, Kan., in late 2008.

The union hasn’t called for such an effort here in the Puget Sound region, said Bill Dugovich, communications director for the union. However, workers who are frustrated with the contract offer can do so at will, he said.

SPEEA will mail ballots on Thursday to union members, who will have until 5 p.m. Oct. 1 to vote. Most will mail in their ballots, but there will be drop boxes at SPEEA offices, Dugovich said.

If the union rejects Boeing’s contract, members would not immediately go on strike. Union leaders later could call for a strike vote.

It is unlikely the two sides will reach an agreement before the union’s contract expires Oct. 6. In that case, under federal labor law, the existing provisions remain in place for up to a year, Dugovich said.

Bloomberg News contributed to this report. Herald writer Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.