Boeing has reached a tentative agreement with one of its machinists’ union, signaling a potential end to a strike that started Sept. 13 and has significantly impacted operations, contingent on a vote from the 33,000 striking union workers scheduled for Monday.
“It is time for our Members to lock in these gains and confidently declare victory.”
IAM District 751 statement
The deal addresses several key union demands regarding wage increases, healthcare benefits, and improved working conditions. But notably, Boeing did not concede to one of the union’s primary demands: the restoration of a pension plan for striking workers, a sticking point that had been central to union negotiations.
“Your Union is endorsing and recommending the latest IAM/Boeing Contract Proposal,” said an Oct. 31 statement on the IAM District 751 website. “It is time for our Members to lock in these gains and confidently declare victory. We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.”
The new proposal includes 38% general wage increases over four years, up from a previous offer for 35%, bringing the compounding pay increases to close to 44% by the end of 2028, the union said Thursday. The offer would give members an immediate 13% pay raise, followed by 9% raises each of the next two years and 7% the final year of the 4-year deal. At the end of the new contract, machinist pay would average over $119,000, up from a current average of $75,600.
The new offer also gives workers the option of a $12,000 one-time ratification bonus or to choose a previous offer for a $7,000 ratification bonus and a $5,000 401(k) contribution. Unchanged in the new offer is that Boeing would increase the company’s 401(k) match to 100% (up from an earlier offer of 75%) of the first 8% contributed, in addition to an automatic 4% company matching contribution.
“It’s time we all come back together and focus on rebuilding the business and delivering the world’s best airplanes. There are a lot of people depending on us,” Boeing CEO Kelly Ortberg said in a note to staff on Friday.
Boeing’s previous offer was rejected in a vote on Oct. 23 by 64% of the striking workers while 36% voted to approve it. At the time, Union members reported that they were holding out for a return to a defined benefit pension plan that the company eliminated in previous contract negotiations back in 2014. Boeing has always maintained that a return of the pension plan is a non-starter, and has refused to offer one.
“That ship has sailed—but that doesn’t mean it’s not an effective bargain tactic,” Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations, told MarketWatch. “It’s a legitimate request. But I don’t think Boeing’s even considering a pension.”
John Logan, labor professor at San Francisco State University, recently told Reuters that unions are starting to incorporate pension restoration into bargaining demands. “Even though the UAW was unsuccessful, and the Boeing workers may also be unsuccessful, the issue is likely to come even more to the forefront in union negotiations in the future.”
Earlier this year, United Auto Workers members at GM, Ford and Stellantis didn’t get their pensions restored as they had been demanding as part of agreements to end strikes against the Big Three automakers, but they did get a significant boost to their 401(k) contributions.
Now, machinists’ union leadership is advising members to accept what it thinks is Boeing’s best offer.
“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” said the union statement to members. “We are at that point now and risk a regressive or lesser offer in the future.”
SEE ALSO:
• Boeing Contract Vote Could Hinge on Improved 401(k) vs. Restored Pension
• UAW Strike Settlements: No Comeback for Pensions, But 401(k)s Get Big Boost