Boeing, Engineers Reach Pact Bringing Long-Term Labor Peaceby
New tentative agreement would be good through October 2022
Company, union set to avoid showdown later this year
Boeing Co. and the union representing 20,000 of its engineers and technical workers said they reached a tentative agreement for a six-year contract extension, avoiding a potentially costly showdown later this year and guaranteeing labor peace into the next decade.
The new terms were hammered out during formal talks after the year-end holiday break, well before the existing contract expires in October, Boeing said Wednesday in a statement. The accord addresses wage increases, retirement benefits and other provisions. Ballots will be sent to members next week and votes counted Feb. 10.
If approved, the pact would advance Boeing’s efforts to break from a cycle of short-term labor deals that left the planemaker at risk of frequent unrest and strikes. The company’s largest Machinists union agreed to a controversial 10-year pact that froze pensions in early 2014.
“These contract extensions are the result of a lot of hard work and good will,” Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace, said in a separate statement. “Hopefully this gives us a template for the future.”
Relations between Boeing and its engineers have been strained as the company announced plans to create engineering centers in other states and shift some work from its traditional Seattle-area base. Since the last contract agreement in 2012, the planemaker has announced plans to shift 6,000 engineering and technical jobs out of the Puget Sound region.
While many of the affected workers found comparable work at Boeing, “job security has been an ongoing issue with our Puget Sound workforce,” Todd Zarfos, an engineering leader for Boeing’s commercial airplanes division and one of its chief negotiators, said by telephone.
The new deal attempts to relieve some of that anxiety. The company committed to help affected engineers find new assignments, while guaranteeing between 26 and 60 weeks of pay plus six months of medical coverage to those who lose their jobs. Union members would also receive average 5 percent pay raises through 2021 and a 4.5 percent gain in the contract’s final year, Zarfos said.
The contract would also swap traditional defined-benefit pensions for members hired before March 2013, replacing them with a new company retirement contribution and enhanced 401(k) transition contributions at the start of 2019. New hires represented by the union already participate in the program.
Previous negotiations “were contentious, drawn-out and taxing for everyone
involved,” Bill Dugovich, a spokesman for the union, said by phone. Efforts to avoid another showdown gained momentum after Goforth met with new Boeing Chief Executive Dennis Muilenburg in October, he said.