ST. LOUIS — If Boeing hopes to sell more of the military jets it builds in the St. Louis area, lowering the price tag of those jets would help. And a contract that will be voted on Sunday by about 2,500 of the company’s union Machinists in town aims to do just that.
A tentative deal reached Wednesday between Boeing and the District 837 of the International Association of Machinists would offer buyouts to veteran union workers, lower wages for future hires and lock in a schedule of wage increases and bonuses for the next 7½ years.
It is designed to make the endangered assembly lines in St. Louis more “competitive” — as both company and union put it — and boost Boeing’s chances of winning more work.
Boeing officials had little to say ahead of Sunday’s vote, issuing only a brief statement pointing out the offer’s “attractive” wage and benefit provisions and saying “it will better position Boeing St. Louis to compete for critical future work.”
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Union leaders did not return calls seeking comment. They spent Thursday in Boeing’s huge factories in north St. Louis County and St. Charles, Mo., talking with workers about the deal. A
message on the District 837 website said the deal was unanimously endorsed by the 12-member bargaining committee.
“The offer is a collective and balanced approach to the issues of all our members and the business needs of the company,” wrote District 837 President Gordon King.
The deal sets up a two-tier wage structure, like those in many recent auto-industry contracts.
Workers hired at Boeing after March 1 in many job classifications would see their wages top out at levels 8 to 49 percent below the top wages earned by people on the payroll today, though a person familiar with the contract said they’d still exceed national averages for aerospace manufacturing. And workers will shoulder more health-insurance costs in future years.
But those concessions, coupled with newly created buyout deals that could shrink Boeing’s workforce without layoffs, might be enough to help win more orders and thus prolong at least some of the union’s jobs.
That’s especially true on the F/A-18 Super Hornet program, which is set to end in 2016 unless the Pentagon or foreign militaries buy more.
Boeing also hopes to lower costs to compete for future work on the Navy’s unmanned U-Class drone and the Air Force’s T-X trainer jet program.
And, running through 2022, the deal is long enough to factor into the competition for the $55 billion Long-Range Strike Bomber program, which the Air Force hopes to award later this decade and build in the 2020s.
“The biggest challenge Boeing faces is maintaining its engineering teams, its design capability and its factory-floor skills in the absence of government demand,” said Loren Thompson, a defense analyst with the Lexington Institute, a think tank.
“The costs of trying to maintain a major industrial facility are huge if they’re not covered by some ongoing production program,” Thompson said.
In other words, if Boeing’s St. Louis assembly lines go cold now, they may never heat up again.