Washington state leaders let out a huge sigh of relief last weekend when union members voted to accept a deal to produce Boeing’s new 777X airplane.
Passage secures 20,000 jobs over the next decade.
The eight-year contract extension passed by a slim margin, 51-49 percent, a difference of 600 votes among 23,900.
The package comes with pluses and minuses for both sides.
For union members, they are to receive a hefty $15,000 bonus and new hires will be able to reach full pay after six years on the line, 10 years ahead of that previously scheduled.
For management, the agreement brings a dramatic change to the union members’ retirement program. Under the contract all pensions will be frozen as of 2016 and be changed from a traditional defined benefit pension plan to a 401(k)-style plan with defined employer contributions.
Employee concessions also included an every other year raise of 1 percent over eight years and an increase in out-of-pocket health spending.
Union members had rejected a proposal in November by a 2-to-1 margin to produce the new line of planes, primarily because of the retirement plan.
That no vote set the wheels in motion for Boeing to look elsewhere. Within weeks, 22 states, including Kansas, began serious wooing. North Carolina, Alabama and Utah were said to be top contenders for the project. Because they are right-to-work states, Boeing could be guaranteed lower wage rates and likely avoid any unionized work force.
Kansas, if you remember, lost 2,100 Boeing jobs last year when it relocated all the jobs it had in Wichita to other states.
To keep the business in state, Washington offered Boeing an $8.7 billion tax break up through 2040.
Local union leaders urged their members to vote no on the contract, while higher-ups with the International Association of Machinists and Aerospace Workers urged passage. Union employees based in Kansas and Ore-gon also were able to participate in the vote.
Locals reasoned Boeing wouldn’t be willing to jeopardize its great wealth of manufacturing experience and convenient Puget Sound location for another location.
Higher-ups weren’t so sure and reasoned an additional $5,000 bonus and escalated pay scale for new hires would balance out the concessions.
Union members resented being asked to approve the changes at a time of record profits and a backlog of $400 billion in orders. Boeing CEO Jim McNerney was paid $21.1 million last year. Company dividends saw a 51 percent increase and recently approved a $10 billion stock buyback.
If the company picture is so rosy, why should employees get the short end of the stick, they asked.
Because Boeing can do it, is the short answer.
The long answer is job security.
Today’s global economy has significantly increased competition for jobs.
Boeing first began in Seattle in 1916. Not to sound crass, but that history held nothing compared to what corporate deems necessary to stay competitive and satisfy its bean counters.
That’s business today.
— Susan Lynn
Boeing employees accept new realities of business today
