Members of IAM District 751 in the State of Washington will vote again on January 3 on whether to accept an offer of a contract extension made by Boeing, the world’s leading manufacturer of airplanes.
In one of the largest turnouts ever in a Boeing contract vote, members in November rejected a similar offer by a two to one margin.
Boeing’s two offers require District 751 members to accept steep concessions; in return, Boeing promises to build its new 777X airplane in the Puget Sound area where District 751 members live and work.
District 751 leaders refused to present Boeing’s latest offer to the membership because it was too much like the one workers rejected in November.
However, IAM International President Tom Buffenburger ordered the local to vote on the latest Boeing offer.
Boeing in November offered to extend the District’s 751 contract through 2024 and to build the 777X in the Puget Sound area if union members agreed to concessions that would eliminate their defined benefits pension plan, increase workers health care costs, freeze wages for new hires, and limit wage increases of current workers to an average of 0.5 percent over the next ten years.
When workers rejected Boeing’s concession demands, the company said that it might build the 777X elsewhere and announced that it had already solicited proposals from other possible sites including, Long Beach, California; Salt Lake City; Huntsville, Alabama; San Antonio; North Charleston, South Carolina; and St. Louis, Missouri.
In Missouri, state leaders quickly put together a proposal that it hoped would lure Boeing jobs away from Washington.
Some labor leaders in Missouri played an important role in developing the proposal, and the Missouri Times reported that, “Labor leaders announced (that they would accept) a 24-hour work schedule on any Boeing related projects promising to shave two years off the planned five-year construction timetable without collecting overtime.”
According to the Times, “Jeff Aboussie, executive secretary-treasurer for the St. Louis Building and Construction Trades Council, said the 24-hour agreement was just one way Missouri could ‘highlight its strengths,’ in the process.”
Despite the proposals like the one that came from Missouri, Boeing continued to negotiate with District 751, and on December 12 announced that it had made a new offer and wanted union members to vote again.
But the new offer retained the same concession demands as the original offer.
The only difference between the new and old offers was that the new one included an additional $5,000 signing bonus payable in 2020, increased dental coverage, promised to keep the 737 MAX airplane production in Washington through 2024 (but the promise was not added to the contract), and retained the six-year progression for new hires to reach the maximum pay rate (the old offer extended the pay progression schedule to 22 years).
“Our members want to build the 777X, and we believe Boeing’s best chance for success for this vital airplane program is for our members to build it,” said Tom Wroblewski, District 751 president, when Boeing made its new offer. “However, the price Boeing demanded is too high.”
In exchange for the promise to build the 777X in Washington, Boeing wanted to
- Eliminate the workers’ defined benefit pension and replace it with a 401(k) plan. Pension benefits earned up to 2016 would be frozen and the company would stop making contributions to the pension fund, putting the pensions of current and retired employees at risk.
- Increase workers health care expenses to 16 percent of the plan’s cost and reduce coverage from 100 percent to 90 percent. Boeing would be able to make changes unilaterally to the workers’ health care coverage to avoid paying the Affordable Care Act’s excise tax. The union estimates that the offer if accepted would triple employee health care costs between 2016 and 2024.
- Freeze pay for new hires until 2024 at which time says the union, new hire pay would be about the same as Washington state’s minimum wage, which is adjusted annually as the cost of living increases.
According to a flyer put out by the union, “Boeing’s proposals on pay and benefits will mean decreases in (members’) take home pay. Your monthly health care premiums will go up at least 10 percent each year, while you’ll see guaranteed wage increases averaging only 0.5 percent from 2016 to 2024.”
At the same time that Boeing is demanding that its workers accept these concessions, the Boeing board recently voted to make $10 billion available to buy back company stock.
The Washington legislature and Gov. Jay Inslee also agreed to a $9 billion worth of tax abatements if Boeing stayed in Washington.
District 751 leaders, who took a neutral position on the original Boeing offer, are now urging members to reject the new one.
“Due to the massive takeaways, your District 751 leadership is united with a recommendation that you reject this proposal,” read a letter sent to members. “You need to look at the facts of the economic destruction you would have to live under for the next 11 years, without any opportunity to change any provisions of the contract.”
The union will hold a rally on January 2. “Just say NO to the takeaway offer,” said the notice of the rally on the District 751 website.