EVERETT — Boeing Co. leaders might breathe a little easier this morning having likely avoided a strike by its engineers union after reaching a tentative contract Friday.
“These agreements are the result of lots of hard work by all parties,” said Ray Goforth, executive director of the engineers union. “It’s gratifying that we could reach an agreement and put the decision in members’ hands.”
Boeing and the Society of Professional Engineering Employees in Aerospace agreed on contracts for the union’s technical workers and engineers Friday afternoon. SPEEA advisers approved the contract offer that evening and joined union negotiators in urging members to accept Boeing’s four-year proposal.
Members will vote Dec. 1.
Boeing’s offer includes guaranteed annual wage increases of 2 percent for the engineers and 2.5 percent for technical workers with potential for additional increases based on merit. The union will gain input into Boeing’s decisions on outsourcing. Boeing also agreed to retain its traditional pension plan for both new and current SPEEA members.
SPEEA negotiates two contracts for workers mostly located in the Puget Sound region: one for about 7,000 technical workers and another for 14,000 engineers.
“We had a goal of building on a legacy of bargaining success with this union,” said Doug Kight, Boeing’s lead negotiator. “We addressed some tough issues.”
Strike stress
The engineers and technical workers have gone on strike against Boeing only twice in roughly six decades. The union staged a one-day strike in 1993 and a 40-day work stoppage in 2000.
Roger Pullman, the union’s Northwest regional council chairman, said he spent three days of negotiations as an observer. The proposed contract is attractive under the current economic circumstances, Pullman said.
“I believe that this contract serves the best interests of our members,” said Pullman, a Boeing change-management specialist. “I also believe that in order to get any improvement, we would’ve had to go on strike.”
A strike by SPEEA would come at a critical time for Boeing as it tries to recover from not only a 57-day Machinists’ strike but also several recent setbacks. On Friday, Boeing announced delays on its 747-8 jumbo jet and its 777 Freighter because of a lack of engineering employees, design changes and the Machinists’ strike.
Earlier in the week, the aerospace company also revealed a production problem involving faulty parts with its 737 single-aisle aircraft.
Although Boeing confirmed its new 787 Dreamliner won’t fly this year, the company hasn’t given a revised schedule for the jet made mostly from composite materials of carbon fiber. Before the strike, the 787 already had been pushed back 15 months. Near the end of the strike, Boeing workers also discovered about 3 percent of the 787’s fasteners had been improperly installed and would need to be replaced.
Boeing’s shares tumbled $2.12, or nearly 5 percent, Friday to close at $41.04 on the news of the new delays.
Outsourcing, contract workers
Boeing’s aggressive outsourcing not only of the 787’s design work but also of its production riled its unions. SPEEA’s Goforth noted in late October that his members believed Boeing hadn’t respected their advice on the consequences of outsourcing work on the 787. Yet the company turned to its unions, both SPEEA and the Machinists, to fix problems created by its global 787 partners.
“My fear is that all the emotions are going to pour out if Boeing gives us a contract with any takeaways,” Goforth said in October.
While Boeing didn’t provide job guarantees for a certain percentage of SPEEA members, it did allow for input from the union on members’ work the company is looking to outsource. And the new contract provides for regular comment from the union on contract labor and outsourcing issues.
“We recognize that Boeing’s direct technical and engineering team is the foundation of our competitiveness, and we’ve agreed that it is in the best interest of the company, the union and employees to understand the nature of Boeing’s business strategies and plans regarding the use of non-Boeing labor and subcontracting,” Boeing’s Kight said on Friday.
Representation, new pension
Boeing and SPEEA also butted heads over union representation of about 100 engineers in Utah. The members work primarily on Boeing defense projects. Their distance from the Puget Sound region and work objective led Boeing to petition to have the Utah engineers covered under a separate contract. SPEEA’s Goforth saw Boeing’s move as a means of dividing the union and suggested the company might try to carve out Auburn or Frederickson workers next time around.
The company agreed Friday to leave the Utah engineers in the Puget Sound region’s bargaining group. That was good news to Sandy Hastings, a quality technician and analyst for Boeing.
“The idea of keeping Utah members in our family is a great bonus for us,” she said.
Union members, like process engineer David Smart, also had concerns over Boeing’s initial plan to offer new employees a 401(k)-type retirement plan rather than the standard pension. Smart was happy to hear that Boeing agreed to maintain the defined pension for all SPEEA members.
“I’m heartened by Boeing’s attempt to keep the relationship stable and respectful,” he said.
Herald Writer Yoshiaki Nohara contributed to this article.
Visit the aerospace blog at heraldnet.com to comment on the contract.
Highlights of SPEEA contract
Wages: Boeing provides a salary increase pool of 5 percent each year of the contract with guaranteed increases of 2 percent annually for engineers and 2.5 percent annually for technical workers.
Pension: Increase in pension to $81 per month for each year of service beginning Jan. 1, 2009, up from $70. Another bump to $83 will begin Jan. 1, 2012. Retains traditional pension plan for existing SPEEA members and new ones. Boeing had wanted to offer new employees a 401(k)-style plan.
Medical benefits: Members would pay a slight increase in deductibles for their Traditional Medical Plan but would receive expanded coverage for preventive care.
Outsourcing: Allows SPEEA early input in decisions involving outsourcing of member work.
Overtime: Engineers will be paid at straight time plus $15 an hour for time beyond 144 hours per quarter through 2010. Overtime up to 144 hours per quarter will remain at the existing rate of standard pay plus $6.50 an hour. After 2010, the overtime premium of hours above 144 hours ends and reverts back to $6.50.
Union representation: Boeing had sought to cut 100 engineers in Utah from the Puget Sound contract. They remain under the contract.
Employee Incentive Plan: Continued participation for members.
Contract vote
The union will mail out ballots late next week. SPEEA members vote on both the contract and whether to strike. A simple majority plus one is required.
Members can deliver ballots themselves or mail them in. The labor group will tally the votes Dec. 1.
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