Boeing machinists narrowly approve contract

The Boeing proposal that Machinists voted to approve Friday has these major elements:

o Extends current contract by eight years, through 2024

o Ends pension-plan accruals in 2016, substitutes a defined-contribution savings retirement plan. Instead of pension, Boeing contributes to a current employee’s retirement account 10 percent of gross pay the first and second years, 6 percent the next year, and 4 percent a year after that. New employees get 4 percent a year.

o Retains the current 401(k) plan (distinct from savings retirement plan), and increases company match to 6 percent of base pay, from 4 percent.

o Maintains the wage progression known as “zoom,” which moves new hires to top of their grade’s pay scale after six years.

o 4 percent general wage increase over eight years, plus cost of living.

o Provides $10,000 signing bonus now, another $5,000 bonus in 2020.

SOURCES: Boeing, Machinists

SEATTLE — Boeing machinists approved a contract Friday that would concede some pension and health care benefits in order to secure assembly of the company’s new 777X airplane for the Puget Sound region, solidifying the aerospace giant’s presence in the Seattle area for many years to come.

The offer fractured the union and drew unusual pleas from politicians who said the deal was necessary to support the area’s economic future. Boeing has been exploring the prospect of building the 777X elsewhere, a move that could trigger a steady exodus of aerospace jobs from the place where Boeing was founded.

Local union officials, meanwhile, urged their 30,000 members to oppose the deal, arguing that the proposal surrenders too much at a time of company profitability. They had opposed taking a vote at all but were overruled by national leaders in the Machinists union.

Tina Shrader, a Boeing worker for eight years, said she was voting no.

“I don’t want to mess with my pension. I’m here for my paycheck and for my pension,” Shrader said.

Bob Dennis, an inspector at Boeing for six years, said he was voting for the contract because it represented the best chance to keep the 777X jobs in Washington state.

“I don’t think Boeing had to come back to the table. We forced them that way. But at the same time, I think this is our last opportunity to keep those jobs in the state,” he said.

Washington state has always been the most natural place for Boeing Co. to build the 777X, since most of the company’s production is still done in the Puget Sound area. Chicago-based Boeing offered to keep the 777X in the region but sought two big deals: An extension of tax breaks all the way to 2040 and a new contract with the Machinists union that would transition workers away from traditional pensions.

In November, state lawmakers swiftly approved the tax benefits — valued at some $9 billion — but the Machinists rejected a proposed contract shortly afterward. After the initial contract rejection, Boeing immediately began soliciting bids from other states. The company said it received submissions for 54 locations in 22 states.

The competition has underscored Boeing’s commanding bargaining position in an economy where top-notch manufacturing jobs remain scarce and elected officials feel obligated to aggressively pursue such opportunities.

Boeing has improved its offer since the last vote by machinists. An initial plan to slow the rate that workers move up the pay scale was tossed while the company is also offering $5,000 in additional bonus money and improved dental coverage.

Opponents of the contract oppose the idea of freezing the pension and moving workers to a defined-contribution savings plan. They also decry increased health care expenses and slower wage growth. However, some machinist would likely see their base salaries rise above $100,000 if the deal passes.

Boeing began offering the 777X in May, and company officials have said they need to move swiftly to decide where the plane will be built.

Production of Boeing’s 777X would likely bring thousands of well-paying jobs to whatever region wins the work. The plane is a new iteration of its strong-selling 777, and the company recently received orders for 225 new 777X planes from three airlines at the Dubai Airshow.

Boeing has said the 777X is expected to carry as many as 400 passengers and be more fuel efficient than the current 777.