Boeing backs off in deal with engineers

November 17, 2008

Darrin Hoop looks at the pros and cons of the tentative contract between Boeing and the engineers' and white-collar workers' union.

SOON AFTER settling a two-month-long strike by machinists, Boeing has backed down from a fight with its second-biggest union, the Society of Professional Engineering Employees in Aerospace (SPEEA).

The union, also known as International Federation of Professional and Technical Engineers Local 2001, represents 21,000 engineers and technical workers at Boeing. It reached a tentative agreement with the company on a four-year contract on November 14.

The deal includes two separate contracts. The first covers 14,000 engineers in the SPEEA professional bargaining unit. The second contract covers 7,000 technical workers in the union's technical bargaining unit. Most of those covered work in the Puget Sound region; there are about 550 other workers in Oregon, Utah and California.

The main negotiations started October 29 after more than eight months negotiating in smaller committees. But it's clear that SPEEA benefited from the International Association of Machinists' (IAM) recent contract victory.

Boeing and the SPEEA reached a tentative agreement in November
Boeing and the SPEEA reached a tentative agreement in November

As was the case in the company's negotiations with the IAM, Boeing's original proposal to SPEEA aimed to take pensions away from new hires.

Not only did Boeing drop this demand, but SPEEA also won the same increases in pensions that the IAM received in its contract. Starting January 1, 2009, the formula for SPEEA members' pensions will increase from $70 to $81, rising to $83 in the fourth year of the contract.

SPEEA also resisted Boeing's attempt to force the union's Utah members out of bargaining unit--again, mirroring an attack on the IAM in which the company tried to force IAM members in Wichita, Kans., into a separate bargaining unit.

On other issues, SPEEA fell short of its original demands--a call for 10 percent wage increases in each year of the contract. Even so, according to the union, the proposed contract will boost pay an average of 5 percent each year, though not all of that money is guaranteed. Specifically, engineers are guaranteed at least a 2 percent pay increase each year, and technical staff at least 2.5 percent. This deal, as in the current contract, creates a pool of money for salary increases that is shared among workers based on performance evaluations.

According to the union, some workers will get more, and some less, so that the average raise is 5 percent. Still this is an improvement over the annual average raise of in each year of the last contract.

In the area of health care benefits, the union agreed to some cost increases, but with more coverage guaranteed. In the main "Traditional Medical Plan," deductibles will increase from $200 per individual to $225 and $600 per family to $675, but prescription drugs will no longer apply to the deductible.

In addition, there's no change in the maximum out-of-pocket payment, and payments for prescription drugs will no longer apply to the maximum out-of-pocket payments. Also, routine pap tests, mammograms, prostate exams and colonoscopies are covered at 100 percent, with no deductible payments.

In another important gain, under the retiree medical plan the definition of covered dependents will be expanded to include eligible same-gender domestic partners and their eligible children.

WHILE THIS contract is important for the union in that it stopped a couple major concessions Boeing wanted and it includes gains in a couple key areas, the question--as with the machinists' deal--must be asked, "Could SPEEA have won even more?"

Boeing has had record profits of $13 billion since 2002. It has a record eight-year backlog of more than 3,400 plane orders worth $349 billion, according to MarketWatch. In July, an article reported that Boeing sees a market for 29,400 new commercial airplanes worth $3.2 trillion over the next 20 years.

In the area of outsourcing, new language gives the union more of a role in discussions with management about future job losses, but management isn't obligated to follow the union's advice.

Many SPEEA members have filled up the comment sections of the Seattle Times and Seattle Post-Intelligencer with angry attacks on the settlement. Regarding the meager wage increases, one commented, "The headlines are very misleading for this deal. It is the POOL that is increased 5 percent every year, and not the actual salaries. Time to start puckering up to your managers if you want that extra 3 percent."

Another SPEEA member claims that workers earning above $82,000 a year won't get the pension increase.

Members will vote by mail on the contract offer. They should receive ballots around November 21 and have until 5 p.m. on December 1 to vote. Ballots will include a vote on strike authorization as well, and both the contract vote and strike authorization will be decided by a simple majority of 50 percent plus one.

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