A strike against the Boeing Co. is “looming,” Machinists union leaders warned their members on Saturday.
Boeing’s latest contract offer falls short on the union’s key issues and introduces new ones the union can’t support, the International Association of Machinists bargaining team said.
“We are dismayed by their extreme indifference to your top issues,” the bargaining team said in a message to union members. “We are significantly far apart at this time.”
The union spent Saturday preparing a counteroffer for Boeing, which it expected to present Saturday night.
The union has a good deal of leverage in these talks, an analyst said, because of the rebounding market for jetliners. But it’s going to have a hard time convincing Boeing to significantly increase pension benefits, Teal Group analyst Richard Aboulafia added.
“Everyone’s learning from the airlines that pensions are a sure ticket to financial pain,” he said. “If times get really bad, they’re glued on you, stapled on you. … They’re permanent fixed costs.”
Boeing presented its latest offer to the union late Friday night. Under its proposal, IAM workers would get:
* A $2,000 lump-sum payment upon ratification, plus another $2,000 in the first year of the contract that individuals can roll into their 401(k) retirement plan. If employees choose this option, Boeing will match their savings plan contribution by 50 percent.
* A new incentive plan that would give Machinists the chance to earn up to 15 extra days of pay annually – similar to a bonus program in effect for nonunion workers. Boeing estimates the average IAM-represented employee would receive about $1,100 a year.
* An increase in pension benefits from $60 a month for every year of service to $64 a month.
* No general wage increases, but cost-of-living raises of about 1 percent a year.
Boeing says the average Machinist is paid $59,500 a year.
“Overall, we strongly believe that this is a progressive, responsive and balanced proposal,” Boeing’s lead negotiator, Jerry Calhoun, told managers in a memo outlining the contract offer.
In particular, the bonus plan will let Machinists share in Boeing’s future success, spokesman Chaz Bickers said.
Union negotiators strongly disagreed with Calhoun’s appraisal.
Boeing’s second offer on pensions was unchanged from its first, union spokeswoman Connie Kelliher said, and that one was unacceptable.
Friday night’s offer was “well below the expectations of our membership and well below the amount (Boeing) can afford,” the union said.
It’s also less than what Boeing offered in the last contract. In 2002, Machinists negotiated a 20 percent increase in pension benefits over three years.
Boeing also didn’t budge on its refusal to consider union job security proposals, and it spurned a proposal to make seniority one of the criteria for determining who gets picked for team leader jobs, the union said.
While Boeing said the company would pay between 85 percent and 98 percent of Machinists’ health care premiums, the union said those workers’ monthly payments would triple.
The union, which is posting a homeland security-style, color-coded indicator on its Web site, upgraded its strike threat assessment from an “orange” alert to “red” after receiving Friday night’s offer, signifying that “a strike is looming,” union leaders said.
“Unless somebody comes in with a realistic deal, there’s no chance that we’re not going to strike,” said Jack Benson, a former Everett mechanic who now works the second shift in Renton. “There’s quite a bit of people screaming ‘strike, strike, strike.’ “
Machinists aren’t looking for wage increases, but are seeking a serious improvement in pension benefits, he said – up to $90 to $100 a month per year of service.
“Anything less than that, and it’s just a laugh,” Benson said.
It would be tough for Boeing to weather a strike right now, Aboulafia said. Airlines, particularly in Asia, are rebounding, and Boeing is locked in a market-share battle with Airbus to supply jets to the new low-cost carriers springing up.
“The last thing you want to see is the new emerging-market carriers defect to Airbus,” he said. And that could happen if Boeing can’t deliver planes because of a strike, he added.
However, in the long term, if Boeing is forced to pay more than it wants for labor, that only increases the likelihood of its outsourcing more work, Aboulafia said.
Given that, Boeing has more to lose from a strike in the short term, he said. “Long-term, labor will probably be shooting itself in the foot.”
Boeing said it will present the union with its final offer by Tuesday. The Machinists are set to vote on the contract Thursday.
Reporter Bryan Corliss: 425-339-3454 or corliss@ heraldnet.com.
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