From today's Boeing News:
Boeing, IAM reach tentative settlement
The International Association of Machinists and Aerospace Workers said Sunday that it has reached tentative agreement on a new three-year contract with Boeing. Union leadership is recommending members vote Thursday to accept the proposed contract covering approximately 19,000 employees in Puget Sound, Wash.; Portland, Ore.; and Wichita, Kan. "The new agreement supports our business plan and addresses the key issues raised by IAM-represented employees and the union," said Alan Mulally, president and CEO of Boeing Commercial Airplanes. If employees ratify the contract, the ongoing strike against Boeing will end later that day. Details about the contract offer are available at www.boeing.com/negotiations.
Fact Sheet C&P:
Boeing Proposal to Our
2005 Boeing/IAM Negotiations
Puget Sound, Portland, Wichita
September 26, 2005
Boeing and IAM reach tentative
agreement for new 3-year contract
Key features of contract apply to Puget Sound, Portland and Wichita
Best-in-industry pension of$70/monthper year of service starting January 1, 2006
Continue existing company match for Voluntary Investment Plan savings
Health Care and Retiree Medical
No change from 2002-2005 contract
Pay and Bonuses
8%ratification bonus in 1styear (average of $5,200per employee)
$3,000 lump sums in both the 2ndand 3rdyears of contract, for a total of $6,000
COLA formula unchanged, projected to add 1% to base wages each year
$0.12 per hour increase added to base wages effective September 2, 2005
Selection process to include structured interviews to recommend candidate(s)
If 2 or more candidates recommended, candidate with greatest seniority selected
Cat A recall rights extended to 7 years for employees with over 5 years seniority
Cat A rights extended to 8 years for all employees laid off as aresult of 9/11
Vote scheduled for Thursday, September 29; return to work 3rdshift that day if ratified
Boeing, Idled for a Month, Agrees To Meet Most of Union's Demands
The Wall Street Journal 09/26/05
author: J. Lynn Lunsford
(Copyright (c) 2005, Dow Jones & Company, Inc.)
Boeing Co. reached a tentative agreement with its biggest labor union to end a strike that idled its airplane factories for almost a month, meeting most of the demands that had prompted employees to walk out and breaking a deadlock that could have lasted for months.
Boeing didn't give the union everything it wanted, especially on the key issue of pensions, and said it would remain competitive under the deal. Still, the result bolsters the organized-labor movement as it confronts givebacks in other industries, including autos and airlines, as well as its own internal divisions.
During secret negotiations in Washington, D.C., on Friday, Boeing Commercial Airplanes chief Alan Mulally and leaders of the International Association of Machinists and Aerospace Workers agreed on a revised three-year contract proposal that would provide an additional boost to pensions and no longer require union members to pay higher medical-insurance costs. Boeing also agreed to back away from several provisions in the contract language that union members said played a major role in their decision to strike.
In a statement to managers late yesterday, Mr. Mulally said the proposed settlement "provides what IAM-represented employees say they want in this contract, where they want it." He said that the "total cost to Boeing is similar to the previous contract offer and meets our definition of a reasonable settlement" and that such an agreement "is the right thing to do for our employees, customers, investors and our communities."
Mark Blondin, District 751 president who led negotiations on behalf of the 18,300 striking workers, said top union leaders planned to recommend that workers approve the new contract in a vote scheduled for Thursday. "By Friday, we want to be back making airplanes," he said.
Mr. Blondin was quick to declare that the union had stood its ground. "By standing firm on the picket lines, our members sent a message to all of corporate America that you can't continue to marginalize the workers who make you successful," he said.
The tentative agreement came surprisingly quickly by Boeing standards, where strikes have been known to last for months. It underscores the strong hand that the labor union had throughout the negotiations because Boeing's production is on the upswing and airlines world-wide are clamoring for new airplanes. The strike had also threatened to delay some key development work on Boeing's newest twin-aisle airplane, the 787 Dreamliner, which is supposed to enter service in 2008.
The walkout began Sept. 2 after union members overwhelmingly voted to picket rather than accept Boeing's offer for a new three-year contract. The standoff forced Boeing to shut down its production lines at an estimated cost of more than $70 million a day, and for several key suppliers to immediately announce layoffs.
Before the walkout, Mr. Mulally had said a strike could be "devastating" for the Chicago aerospace company, particularly in its head-to-head competition with rival Airbus. He said at the time that Boeing couldn't afford to meet all of the union's demands and still remain competitive. In a letter to employees, he said that the union's final demands were $1 billion more than the company could offer and remain competitive.
From the beginning, the union made it clear that its priorities were centered on the concerns of an aging work force -- the age of the average factory worker is 50 -- and less on traditional issues such as wage increases. The union had demanded that Boeing increase the monthly pension multiplier to $80 from $60 for each year of employment -- in other words, giving a machinist with 20 years of service a pension of $1,600 a month instead of $1,320 -- and to guarantee retiree medical benefits for newly hired employees.
Union leaders said they also wanted Boeing to back away from what they termed "high-handed" contract language that eschewed seniority and gave Boeing greater leeway in determining how workers do their jobs. Some of those provisions were initially inserted into the previous contract in 2002, which the union rejected but failed to get the margin needed for a strike.
Although Boeing gave in on most of the noneconomic issues of the contract, which was reported yesterday by Business Week on its Web site, it succeeded in striking a compromise on the pension multiplier. Boeing agreed to boost the multiplier to $70 a month, up from its previous top offer of $66. Boeing also agreed to abandon a plan that would have required members to pay as much as three times their previous monthly out-of-pocket expenses for medical-insurance premiums and co-payments.
Mr. Blondin said he believed the process was hastened because "Alan Mulally came to the table ready to listen in detail to our issues." The negotiations that resulted in the apparent breakthrough were mediated by former House Minority leader Richard Gephardt, who had been hired by Boeing as a consultant before the strike began.
As part of the negotiations, Boeing had tried to get workers to move away from a traditional defined-benefits plan and instead plow more money into the company's equivalent of a 401(k) savings plan. Boeing's top offer had previously included cash bonuses of about $9,000 that would have been reached only if members had agreed to put the money in the savings plan.
The new contract offer calls for workers to receive a straight bonus of 8% based on last year's salary, or about $5,000. They would also receive a $3,000 cash bonus in the second and third years of the contract, bringing the total amount to about $11,000.