After months of negotiation and mediation, Boeing and its 23,000 engineers and technical workers appear headed toward a strike over the company’s proposal for changes to its pension plan.
The members of the Society of Professional Engineer Employees in Aerospace union negotiating team say they’re recommending rejecting the aerospace company’s “best and final offer” principally over the company’s pension proposals.
If the union’s board approves, members will vote late this month and early in February whether to accept or reject Boeing’s plan and whether to authorize the negotiating committee to call a strike. The vote tally on those questions is expected to happen Feb. 7.
If a strike is authorized, the quickest one could be called would be a week later, the union’s governing documents say.
Both the union and Boeing have been cautious about moving closer to a strike. The union’s existing contract with Boeing expired last fall, but talks have continued.
Boeing has offered to continue and even enhance its defined benefit pension plan for present employees but to substitute an enhanced 401K savings plan for employees hired after March 1.
The union says that by its calculations workers under Boeing’s proposed defined contribution plan for new workers would see pension benefits fall some 40 percent short of those they’d receive if the existing defined benefit plan were available to them.
SPEEA spokesman Bill Dugovich said that even by Boeing’s own figures, those workers retirement benefits would be 32 percent lower than they’d receive under the existing plan.
In its final offer presented this week, the two sides appear to be close to agreement on other issues.
Boeing has offered to create a salary adjustment fund of 5 percent of engineers’ pay. Workers would be guaranteed at least a 2 percent increase each year of the four-year agreement. The average increase would be 5 percent.
The company said it would continue its Employee Incentive Plan which rewards workers with an annual bonus based on the company meeting certain benchmarks. The payouts under that plan under the expired contract averaged $4,500 a year.
Boeing engineers now earn an average of $112,000 a year. Technical workers average pay is $76,000.
For existing workers, the company would continue its defined benefit plan increasing its monthly pension payout amount to $91 per month per year of service in the last year of the agreement.
Boeing would continue to match 75 percent of workers’ 401K contributions for the first 8 percent of their salary.
Health care and dental benefits and costs would continue unaltered under the new agreement, according to Boeing.
The union and the company differ on how a strike could affect the company. The union said a strike would shut down all production in Puget Sound as well as engineering and design work here.
SPEEA contends its engineers and technical workers are key to solving the issues the company has encountered with its 787 Dreamliner. The FAA has grounded all Dreamliners, and foreign regulators have followed suit because of safety issues encountered in recent weeks.
Those issues include two battery fires, one on the ground in Boston and the other in the air in Japan that forced an emergency landing.