Boeing’s engineering union is expected to reject the company’s initial contract offer when ballots are tallied in the coming week. This will leave labor and management at odds in an increasingly tense confrontation over the future status of more than 23,000 members of the Society of Professional Engineering Employees in Aerospace (SPEEA). All of these members are employed in the Puget Sound Region.
Yesterday, Boeing management issued a warning that it could ship future jobs out of the area if unable to keep down the cost of employing these engineers.
Meanwhile, the engineers’ union is considering a strike. During a meeting on the front steps of Boeing’s Commercial Aviation Services building in Seattle, a group of SPEEA members asked their union representatives questions and shared their own thoughts on the labor situation.
The majority of attendants were wearing red union T-shirts with badges saying “I’m voting NO.”
In an interview with the Seattle Times, Jeanne Fellin, an aircraft-support engineer who has been an employee with Boeing for nearly 25 years, said she had “not heard of anybody voting yes”
“A lot of people are upset,” said Shannon Qualls, a young technical designer. “The contract is insulting. The compensation package is totally unacceptable. It’s less than the rate of inflation. It’s sad to see, when Boeing is doing so well with orders and the money they are making.”
However, Mike Delaney, the engineering leader at Boeing, cautioned that if the company is coerced into raising wages and benefits for local employees above the level they would earn in other markets, the inevitable result will be to move engineering work — especially high-skill work developing new airplanes and defense projects — out of the Puget Sound region.
It wouldn’t happen immediately, Delaney told the Seattle Times editorial board. “We’ll keep hiring people to build 737s. But slowly over time, if you become uncompetitive, you have to deal with the arbitrage and leverage other resources.”
Delaney stated that nearly 30 percent of the engineering work for his unit is already done within the company but outside the Puget Sound region.
Delaney said he wanted workers to be rewarded, but added “you have to understand there is a market out there.”
Issaquah-based industry analysts at Leeham.net said are predicting a “landslide rejection” Monday of management’s intitial offer.
After a summer of bargaining, Boeing published its full contract proposal Sept. 13, just a week prior to the deadline for issuing mail-in ballots.
The offer would raise overall compensation of engineers by 3% annually, and 2% annually for technical professionals. Last year, the U.S. inflation rate was 3%). Boeing also said it would raise the basic monthly pension benefit from $83 per year of employment to $91 per year of service.
Additionally, under the updated contract, new hires would be shifted into a 401(k) retirement plan instead of the traditional pension plan of older employees.
But SPEEA was unwilling to even discuss details given the specifics of this proposal. Representatives found the offer “insulting” and distributed it to members with a recommendation to reject it. That move put Boeing in the awkward position of having to disown some details of its offer in advance.
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For example, Boeing retirees were upset that changes to language in the contract could allow management to cancel medical benefits for many who took early retirement. Boeing immediately responded with a public statement that it “has no plans to eliminate retiree medical benefits for current retirees.”
The union now plans to increase pressure on Boeing. If a weighty no vote doesn’t get Boeing to modify the terms, the next step will be a vote to authorize a strike.
Executive Director of the Union, Ray Goforth, told reported that “We have a very effective plan in place to shut down production real quick.”
But it would take months to reach that stage and in the meantime, negotiations would continue, probably starting the day after the first vote. Members could continue to work under the existing contract, which expires Oct. 6.
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