Getty Images
Industryweek 10382 Boeing Max Airliner

Boeing Engineers Approve 6-Year Pact, Avert Labor Showdown

Feb. 18, 2016
The tentative agreement was approved by 71% of union engineers and 73% of technical workers.

Boeing Co. won’t face labor strife later this year after engineers and technical workers overwhelmingly approved a six-year contract extension that brings a salary boost and more job security.

The terms take effect immediately and extend to October 2022, the company said in a statement on its website. The tentative agreement was approved by 71% of union engineers and 73% of technical workers, the union said in an e-mailed statement late Wednesday.

The deal is the latest of several long-term pacts struck by Boeing and its collective bargaining units that break from short-term contracts that had left the company at risk of frequent unrest and strikes. The effort to avert a showdown gained momentum after new Boeing Chief Executive Officer Dennis Muilenburg met last October with Ray Goforth, the union’s executive director.

“This agreement recognizes and rewards the contributions of engineers and technical workers who are vital to our continued leadership in aerospace, and it will help ensure Boeing’s competitiveness in our second century of business,” Muilenburg said in the statement.

Boeing rose 1.1% to $117.57 at the close in New York. The shares have declined 19% this year as a report of an accounting probe and a weaker-than-expected forecast for 2016 fanned investor concern.

Hammered Out

The planemaker hammered out a temporary agreement last month during formal talks with the Society of Professional Engineering Employees in Aerospace, well in advance of Oct. 6, when a previous contract covering the union’s 20,100 members would have expired.

“It was a unique opportunity that allowed these early contract talks,” union president Ryan Rule said in the e-mailed statement. “We’re glad it worked.”

Boeing and the employees have been strained since the last contract agreement, in 2012, as the company shifted engineering work to other states along with 6,000 jobs from its traditional Seattle-area base. Ray Conner, who heads Boeing’s commercial unit, warned employees in a Feb. 10 webcast that more job losses may lie ahead as the planemaker works to cut costs in a brutally competitive environment.

Relieves Anxiety

The new deal attempts to relieve workers’ anxiety over job security. The company committed to help affected engineers find new assignments, while guaranteeing between 26 and 60 weeks of severance pay plus six months of medical coverage to those who lose their jobs. Union members will also receive average 5% pay raises through 2021 and a 4.5% gain in the contract’s final year.

The contract also swaps traditional defined-benefit pensions for members hired before March 2013, replacing them with a new company retirement contribution and enhanced 401(k) transition contributions at the start of 2019. New hires represented by the union already participate in the program.

Popular Sponsored Recommendations

S&OP Optimization: Data-driven Strategies to Achieve Sustainable Profitability

Feb. 6, 2024
Through collaborative S&OP, manufacturers can balance demand and supply effectively, optimize resources, and capitalize on emerging market opportunities. Learn how to maximize...

How to Build a Predictive Maintenance Program: Lessons Learned from LSB Industries’ Success

Dec. 21, 2023
Register today and join this webinar to gain insight on best practices for setting up a predictive maintenance program from industry experts.

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Capitalize on Energy Flexibility with These Four Strategies

Feb. 4, 2024
Energy flexibility – the ability to temporarily reduce or shift energy use – can unlock revenue, lower energy costs, and more. Learn how to capitalize on energy flexibility with...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!