Machinists scoff at Boeing offer

Union negotiator says aircraft giant is 'trying to incite a strike'

? Boeing Co. negotiators made their initial contract offer Friday to commercial jet production workers, proposing a 6 percent ratification bonus, 2.5 percent pay raises in the second and third years of the new contract and a small boost in its pension contribution.

But the company also wants employees represented by the Machinists union to share more health care costs. It is seeking changes that, depending on how much an employee uses such benefits, could increase the total amount employees pay in deductibles, co-payments and other costs by an average of $350 per year.

“For a so-called world-leading company, Boeing has put forward a third-rate offer,” said Dick Schneider, chief negotiator for the Machinists. “It misses by a mile in every key area. … Boeing is trying to incite a strike.”

The proposed pension contribution increase a key issue for the union is far lower than what the union was seeking.

Employees represented by the Machinists average about $50,000 in annual pay. The union represents about 25,000 workers in Washington state, Wichita and Portland, Ore., primarily workers who build commercial jets.

The company’s Wichita operations employ about 13,000 workers, nearly 6,000 of whom are represented by the Machinists. Boeing is Kansas’ largest private employer.

The two sides face a Tuesday deadline for Boeing to make its “best and final” contract offer. The current contract expires at midnight on Sept. 1.

Boeing is breaking from past practice in which it negotiated raises, pensions and other economic elements on a piece-by-piece basis. This time, it is offering an overall economic package that incorporates the boosts and costs that the company is seeking.

“All the components of any contract don’t exist in a vacuum,” said Boeing spokesman Chuck Cadena. “We have to put an agreement in total that is fair and competitive so all those different pieces, whether it’s health care, pensions, productivity improvements those are all related because they’re part of the same contract.”

Under the offer, the company would keep the same formula for cost-of-living increases and the same number of paid holidays, 12. The union wanted two additional holidays.

The company is offering to raise pension payments from a monthly contribution of $50 per year of service to $56 per year of service. The Machinists want monthly payments of $120 per year of service.

Another key issue, job security, is being negotiated separately from the economic elements.

The union has proposed to Boeing that it guarantee employment for all current, active Machinists employees for the duration of the contract unless airplane deliveries fall below 260 planes in a year. It also wants laid-off members to be brought back to work at a rate proportional to the increase in delivery rates. Boeing has said it cannot guarantee employment and that employment levels are tied to production levels.

Since the Sept. 11 terrorist attacks, Boeing has slashed airplane production in half and issued layoff notices for nearly 30,000 workers, mostly in Washington state. But even before that, the company had whittled down its local work force and contracted with outside and overseas suppliers, a move that sparked union grievances.

The economic proposal also would allow employees to increase the amount they may contribute to Boeing’s 401(k) retirement plan from 15 percent to 20 percent of income. The company would continue its 50 percent match for the first 8 percent of employee contributions.

“Our situation requires us to do something creative to deal with the economic conditions while still respecting our employees’ needs for a fair and competitive contract,” said Jerry Calhoun, Boeing’s chief negotiator. “Our objective is to craft an agreement that will work for our (Machinist) employees and our other stakeholders.”

In trading Friday on the New York Stock Exchange, Boeing shares fell 3.6 percent, or $1.37 a share, to $37.13.