On a day when aerospace giant Boeing has announced another staggering quarterly loss in excess of $6 billion, striking Boeing Machinists are voting Wednesday on whether to accept the latest contract offer and end their month-old strike, or to reject it and stay out. The outcome is being called too close to predict.
Among other enhancements, new offer includes a one-time $5,000 contribution to their 401(k)
A key part of the vote? Whether the Machinists will accept significant improvements to the company’s 401(k) in lieu of Boeing restoring a pension plan that was frozen back in 2014.
Boeing’s latest offer includes an increase in the company’s 401(k) match to 100% (up from the prior offer of 75%) of the first 8% contributed, in addition to an automatic 4% company matching contribution. Plus, the new offer includes a one-time $5,000 contribution to an employee’s Boeing 401(k) account.
Boeing’s latest contract offer also calls for a 35% general wage increase spread over 4 years (12% in the first year, 8% in the second year, 8% in the third year and 7% in the fourth year), the reinstatement of the Aerospace Machinists Performance Plan, with a guaranteed minimum annual payout of 4%.
In addition, Boeing said it would boost the pension payout for veteran Machinists who were at the company before the pension was frozen, with the monthly payout to rise from $95 to $105 per year of service before 2014.
“We look forward to our employees voting on the negotiated proposal,” reads a Boeing statement released on Oct. 19.
After a 95% rejection of the initial contract offer in a September vote (which provided for a 25% wage increase), many think today’s vote could hinge on whether the Machinists will accept the improvements to the 401(k) instead of holding out for the unlikely return of the pension plan.
According to an article in today’s Seattle Times, many Machinists say they’ll hold out for restoration of the pension the union was forced to give up in the 2014 contract—something Boeing has flatly refused to concede.
It’s a sticking point for Jesse Ballou, who has been at Boeing for 14 years. The offer “is better, but it ain’t good enough,” Ballou told the Seattle Times. “Give me a pension and it’s sold.”
Another Machinist, Andrew DeFreese, told the Times the pension isn’t as high a priority for him as a contract that allows workers to progress through the wage scales faster and that affords employees more paid time off, and also wants to see a 40% general wage increase over 3 years, not 4. But he’s willing to stay on the picket line to support those who want the pension back because he saw how the change devastated some of his midcareer colleagues.
“The removal of it really threw a wrench in their retirement plans. That was a gut punch for them,” DeFreese said. “If Boeing said ‘pensions are back tomorrow’ and that’s all they added to this contract, it would pass 100%.”
Yet another Machinist quoted in the article took a more pessimistic view of pensions being restored. “Overall, the offer is great. I just hope people are grateful and vote accordingly,” said Jackie Vaden, who has been at Boeing 36 years. “I’m totally aware we should have our pension back. But it’s a reality. We lost it. It’s not coming back.”
Voting began at 8 a.m. and closes at 5 p.m. today. The result—requiring a simple majority—will be announced at Machinists union headquarters, expected after 9 p.m. PDT.
SEE ALSO:
• 401k Contributions Reason For Strike at Major Company
• UAW Strike Settlements: No Comeback for Pensions, But 401(k)s Get Big Boost
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
