Boeing presented to the Machinists union Tuesday an improved contract proposal that offers more money and removes two of three issues that union officials had previously labeled "deal-breakers," but union official Mark Blondin said "the wage package falls well below expectations."

Boeing presented to the Machinists union Tuesday an improved contract proposal that offers more money and removes two of three issues that union officials had previously labeled “deal-breakers.”

Company spokesman Tim Healy called it an “outstanding offer.” But International Association of Machinists (IAM) aerospace coordinator Mark Blondin said “the wage package falls well below expectations.”

Blondin added that the time spent getting those first strike issues off the table has held up agreement on increased compensation. “Right now we are still apart on a lot of issues.”

Boeing withdrew its plan to replace the traditional pension for future hires with a 401(k)-style savings plan. It also killed an attempt to extend outsourcing of facilities-maintenance work.

Everett crane operator and union activist Don Grinde dismissed those concessions.

“They conjure up boogeyman issues they know will incite the membership, then at the last minute they pull them off the table,” said Grinde. “You didn’t gain anything.”

This second Boeing offer comes just four days after its initial proposal was roundly rejected as “insulting” by the union. IAM negotiators will counter with their own revised proposal Wednesday, and Blondin said they expect Boeing’s “best-and-final” offer Thursday.

The new company offer includes substantially more money. Boeing estimates that a typical Machinist will earn an extra $28,000 over the three-year contract span in increased wages and incentive pay, compared to a $24,000 bump-up in its original offer:

• The general wage increase goes up to 9 percent over three years, from 6.5 percent in the initial offer.

• A lump-sum payment after ratification goes up from $2,500 to 5 percent of gross pay, including overtime, in the preceding year. On average, Boeing estimates, that’s worth about $3,300. For higher-paid Machinists, it’s worth more.

• Minimum-wage rates, for new hires, are raised $2.28 an hour compared to $1.28 an hour in the initial offer.

• The basic monthly pension rate goes up to $78 per year of service, from $70 now and $75 in the initial offer.

• Monthly premiums in one of three health-care plans go up 55 percent, versus 100 percent in the previous offer. Premiums in the second plan go down slightly, compared to a 28 percent increase in the previous offer. The third plan remains free of monthly premiums.

One remaining item that the union has labeled a strike issue is Boeing’s proposal to end early-retiree medical benefits for new hires.

Another stumbling block is that the union isn’t satisfied with the company withdrawing its plan to extend outsourcing — Blondin said the IAM also wants a say in decisions about future outsourcing of parts-delivery work.

Subcontracting such work to outside vendors is currently permitted under a contract provision the company inserted in 2002, a clause the union never accepted.

Company and union officials have been locked in intensive negotiations at the SeaTac Doubletree Hotel since Thursday. Boeing negotiators maintain their target of ending the talks this Friday. After a long Labor Day weekend to think it over, union members will vote on the offer Sept. 3.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com