The last time Boeing sat down to bargain with the largest union at the company, it was fighting through a steep downturn in business in...
The last time Boeing sat down to bargain with the largest union at the company, it was fighting through a steep downturn in business in the aftermath of the Sept. 11 attacks.
Three years later, the aerospace giant is riding a surge in commercial-jet orders and has hired back thousands of laid-off workers as well as added new employees, which means the Machinists will be asking for payback.
“Our members stuck in there during the hard times. … Now it’s on the upswing, and we intend to share in the profits that the company is going to get,” said Mark Blondin, Machinists District 751 president.
Boeing maintains it offers stellar pay and benefits but faces intense cost-cutting pressure from financially crippled airlines.
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“We have a competitor out there that offers great products and offers them at prices that are kind of unprecedented,” Jerry Calhoun, vice president of human resources for the commercial-airplanes division, said of Airbus, Boeing’s chief rival.
“Whatever we can get back in terms of pricing and volume and margins, it’s really clawing back our competitive position,” Calhoun said.
Boeing and the International Association of Machinists and Aerospace Workers open contract negotiations today by trading proposals for a new three-year deal. Preliminary talks will stretch through the summer.
Round-the-clock bargaining is to begin Aug. 15, and a vote is scheduled for Sept. 1, when the contract expires.
The union represents about 18,000 employees in the Seattle area, Wichita and Portland.
It’s been 10 years since the union went on strike. In 2002, federal mediators stepped in after the Machinists began voting to authorize a walkout.
The company’s final offer included an 8 percent ratification bonus; a 2 percent pay raise the first year and 2.5 percent the second and third years; and a 20 percent increase in monthly pension payments to retirees.
It also boosted health-care costs, created a crew-leader program the union didn’t like and let outside vendors deliver their work directly to the factory, bypassing Boeing employees who had traditionally received, inspected and delivered parts.
Machinists rejected that offer but fell short of the two-thirds majority needed to strike. Under union bylaws, the contract automatically went into effect.
“Negotiations are give and take — everybody realizes that — but we definitely got took last time,” Blondin said.
Without delving into specifics of the union’s wish list, Blondin said top priorities will be sweetening pension benefits, holding down any increase in health-care costs and protecting jobs.
Last time, the Machinists asked that monthly pension payments for every year of service jump from $50 to $120. They got a much smaller increase that topped out at $60 the final year of the contract.
Boeing has resisted the Machinists’ call for the pension plan to include cost-of-living raises. The union says retirees lose buying power by the day.
Health-care premiums and deductibles increased as much as a few thousand dollars a year for workers who don’t opt for a managed-care plan. Those costs are likely to rise again. Boeing’s health-care payout has increased 30 percent since 2001 to about $1.7 billion.
In 2002, Boeing shot down a job-security proposal tying employment levels to aircraft deliveries. And while it’s hiring more people, Calhoun said it simply doesn’t make sense to guarantee jobs in such a cyclical industry.
“The only thing that generates job security is really the marketplace and our ability to continue to sell products at prices that our customers are willing to pay,” Calhoun said.
Machinists have fought to keep jobs from being outsourced, but Boeing insists that’s part of staying competitive in a global economy.
“To be geocentric about our business would be a very quick way for us to go out of business,” Calhoun said. “Keeping every job and every nut and bolt of every airplane in the Seattle area isn’t going to work.”
The average Boeing Machinist has 20 years of experience and makes $27 an hour or about $56,000 a year. The pay scale ranges from $9.72 an hour to $33.71 an hour.
About 16,200 Machinists work in the Puget Sound region, 900 are in Oregon, and about 700 work in the military unit in Wichita.
About 4,600 commercial-jet workers in Wichita will no longer be part of the union once Mid-Western Aircraft Systems, a newly formed subsidiary of the Canadian investment firm Onex, buys the commercial-airplane plant there.
Despite some lingering bitterness, Boeing and the union say they’re optimistic that they can reach a deal that will make both sides happy.
“Our members want to build airplanes. The company wants to build airplanes. I think, if the company comes in fair-minded to do the right thing, that we can come to a mutually acceptable agreement,” Blondin said. “It’s going to be an interesting summer.”
Boeing and the second-largest union at the company, the Society of Professional Engineering Employees in Aerospace, begin contract talks in October.