ST. LOUIS — Boeing machinists backed a new labor deal Sunday that seeks to give the aerospace company a stronger hand to compete for new business by, in part, offering buyouts to veteran workers and lowering top pay for future hires.
Machinists District 837 President Gordon King said the 1,269-to-449 vote to accept the contract extension would put Boeing in a better position to bid for projects this spring and reduce the need for layoffs in the short term.
Boeing and the International Association of Machinists and Aerospace Workers reached a tentative deal last Wednesday. King told reporters after Sunday’s vote that the new contract would allow longtime union workers to leave “with a healthy retirement” and give younger workers job security.
As part of the deal, wage increases and bonuses are locked in until mid-2022 — a 7 1/2-year extension of the current pact. Eligible employees are scheduled to receive an $8,000 signing bonus within 30 days of the ratification vote, according to a summary of the deal.
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Boeing officials praised the union after the vote.
“Not only does it better position us to compete, but it also ensures that our highly skilled IAM-represented employees, those with us today and in the future, are appropriately compensated for their important work,” said Boeing St. Louis site executive Bill Schnettgoecke.
Boeing workers in the St. Louis area build the F/A-18 and F-15 fighters and the EA-18G electronic attack aircraft, along with other programs. But the F/A-18 Super Hornet program is set to end in 2016 unless there are more orders.
The contract ratified Sunday covers 2,400 Boeing aerospace employees in St. Louis; China Lake, Calif.; and the Naval Air Station Patuxent River, Md., King said.
Boeing officials said Sunday that the company hoped to bid for work extending those lines or including new projects, and that extending the Machinists’ contract puts the company in a more competitive position.
The deal sets up a two-tier wage structure. Employees hired after March 1 in many job classifications would see their wages top out at levels 8 percent to 49 percent below the top wages now earned by workers in the same classes.
King said Sunday that the two tiers were not “too far off from the traditional pay scales that are out there” and would put the company “in better position to bid on future work.”
Under the deal, employees will pay a larger share of health insurance costs in the future.
Those concessions — along with buyouts — could reduce Boeing’s costs enough to win more orders. Eligible employees will be able to accept buyouts between September 2014 and September 2015, King said.
Wilma Buie, an assembly mechanic who is not eligible for a buyout, said the contract would freeze her pension level after just eight years on the job. By approving the two-tier wage scale, Buie said the union did not do enough to watch out for future employees.
“I thought that was separation,” Buie said.
King said the union tried to persuade Boeing to keep intact employees’ ability to accrue benefit service until everyone had 30 years of benefit service under their belts.
“The company wasn’t interested in that,” he said. “There had to be a cutoff line some place.”
Union leaders had warned members that layoffs would have been likely by the end of this year had the deal not passed. King reiterated that Sunday when asked what would have happened if workers had rejected the contract extension.
“If (the vote) would have went the other way we would have just went to the bargaining table in January 2015 with probably about 300 to 500 laid off and no winning of new work because we didn’t get the wage rates down comparable to what they need to bid on future projects,” he said. “You were going to be looking at layoffs, layoffs, layoffs and no potential new work.”
King acknowledged that Boeing could still have layoffs between now and January, but the company told the union that layoffs were unlikely if more than 300 employees took the early retirement packages.