IAM approves new pact

Boeing contract offer boosts pensions, maintains current health care plans and cost provisions

Members of the International Association of Machinists and Aerospace Workers approved a new three-year contract with Boeing on Sept. 29.

The contract ratification immediately ended a four-week strike by more than 18,000 Boeing employees in the Puget Sound area of Washington state, Portland, Ore., and Wichita, Kan.

In announcing a tentative settlement on Sept. 25, Alan Mulally, president and CEO of Boeing Commercial Airplanes said, "The new agreement supports our business plan and addresses the key issues raised by IAM-represented employees and the union."

Contract features

Terms of the new contract include:

• A pension multiplier of $70 per month for each year of service.
• Maintaining existing health care plans under the same cost provisions of the IAM's previous contract with Boeing.
• A ratification bonus equaling 8 percent of each employee's total pay during the past 12 months, which will average about $5,200 per individual.
• Two lump sum bonuses, of $3,000 each, which will be paid at the end of 2006 and 2007.

The new contract did not include general wage increases or an incentive pay plan, which was part of the initial offer turned down by the union in early September.

The company also removed a provision allowing employees to roll the lump sum payments into Boeing's VIP savings plan to receive company-matching funds.

"The total cost to Boeing is similar to the previous contract offer and meets our definition of a reasonable settlement," Mulally added. "It supports our plan for making continued quality and productivity improvements, which is the key to being competitive and winning new business."

In a message to all Boeing managers at the three locations, Mulally noted that when negotiations resumed, the company's approach was "to fully understand how employees and the union valued the individual features of our previous contract offer. We reduced or eliminated features that were not highly valued, and strengthened those features that had greater value to employees. Getting an agreement sooner rather than later is the right thing to do for our employees, customers, investors and our communities."

Fewer employers with pension plans

One of the union's key issues during the strike was raising pension benefits for IAM-represented employees, whose average age is nearing 50.

A Seattle Times article noted that the debate over pensions involved how much to raise them, rather than whether to have them at a time when many companies are walking away from offering pension plans.

Harley Shaiken, a professor specializing in labor issues at the University of California, Berkeley, told the newspaper that only 20 percent of the U.S. workforce is currently covered by private pension plans, down from 40 percent of employees 30 years ago.