The Boeing Machinists Settle

On my way back from Honduras I messaged a friend of mine who is still working for Boeing. I asked him if the contract was accepted. He said they were still voting. It wasn’t until the next day that I learned the contract had been accepted 51% to 49%. Some of the old-time IAM members I know were very upset. Some of the members cried. Some felt that the newer members had sold out the union, losing what the long-term members had fought for, the Pension. I have to admit I was a bit sad at the result, but I also saw the value of the result.

The membership felt like everyone in the state of Washington was against them, and they even felt their own National leadership was against them. Local Union leadership was urging the rank and file to vote against the contract, while the National leaders were encouraging the rank and file to vote for the contract. However, the pressure of lost jobs won out. After the last and final contract offer the Boeing Company began shopping around the 777X work. It will be a substantial amount of work over many years, and the State of Washington wanted the work. Thousands of jobs were at stake, and the Company was not hiding the fact that they wanted to be free of contract negotiations for many years. Therefore, the new eight-year contract will ensure that there will not be the threat of a strike between now and 2024. Plenty of time to develop the 777X, and get it delivered to customers.

The sticking point for local union leaders and 49% of the rank and file was the loss of pension accruals in 2016. However, the company will contribute to a current employee’s retirement account 10% of their gross pay in the first and second years of the new contract. Then the contribution with be 6%, and 4% per year after that. The employees with also continue their 401(k). And as a benefit they will receive an immediate $10,000 signing bonus now, and a $5,000 bonus n 2020. Not too bad, and the new employees will retain the six year advancement to full pay grade.

The region will receive a lot of work for the new airplane. Many thousands of jobs were won with the signing of this contract. This will include the new composite wing that will be built in Everett. The request for bids from states for the 777X work has been canceled and now there are plans to build a 1.1 million square-foot build in Everett to manufacture the new wing. This will infuse the state with up to $4 billion in investments and will create 3,000 new jobs.

The fact is the loss of a traditional pension was probably inevitable, and with the record-breaking sales in Dubai last November, the pressure on the company to deliver will be a reality. The launch of the 777X was secured with the $52 billion in sales after discounts.

Right or wrong, the vote difference was 600 employees, thus passing the contract. As I said earlier I am sad because something within Boeing that distinguished it from other companies has now died. But I am also happy, because there will be a sixth generation of Boeing employees in the state of Washington building the best airplanes in the world.

And that is my thought for the day!


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