New Deal Covers Union Workers Through September 2016

In a move that's virtually unheard of in the arena of labor negotiations, members of the International Association of Machinists & Aerospace Workers (IAM) in Washington, Oregon and Kansas have approved a four-year agreement extending their contract to September 2016 nine months before the current contract was due to expire. The contract, ratified by 74 percent of those casting ballots, builds on a new spirit of cooperation between Boeing and the IAM and places production of the 737 MAX in Renton. It also continues fabrication work for the Next-Generation 737 and 737 MAX in other Puget Sound facilities and Portland, OR.

To date, Boeing has received more than 700 commitments from customers for the 737 MAX. The new airplane is expected to enter service in 2017.
 
"This contract will help secure a better future for our employees, our customers, our communities and our company," said Jim Albaugh, president and CEO of Commercial Airplanes. "It reflects an effort on the part of the company and the union to find a better way to work together and achieve common ground. It's a balanced agreement that makes us more competitive and ensures that the 737 --the best single-aisle airplane in the world -- continues to be built by the people who know how to do it best."
 
The contract calls for wage and pension increases in each of the four years of the agreement, along with a one-time ratification bonus of $5,000, which will be paid on Dec. 15, the last hourly employee paycheck before the holiday break. It also introduces an incentive pay plan for hourly employees. The plan tracks performance on such things as safety, quality and productivity. The individual scores of teams get rolled up into a single score for all of the hourly employees, which determines the incentive payout. Adjustments to health care plans include improvements in key benefits balanced with modest cost increases that reflect a desire to make benefits more comprehensive while moving toward a market-based plan that shares costs between the company and employees. The agreement also establishes a Joint Council for the company and union to regularly discuss issues including workforce, market, competition and performance.

For Boeing, the agreement reflects a new era in relations with its largest labor union, as the company and the IAM work together on issues of safety, quality and competitiveness. It also adds stability as the company continues to ramp up its production rates across all programs. "Commercial Airplanes has unprecedented opportunities and challenges ahead as we deliver new airplanes to our customers, increase production rates and meet a new generation of competitors," said Albaugh (pictured). "With this vote, we commit to work together for our mutual success."
 
“I’m confident we’ve turned an important corner in the 76-year relationship between Boeing and the IAM,” said IAM Vice President Rich Michalski. “Both sides are committed to maintaining the high levels of communications and cooperation that produced this agreement.”

A series of meetings earlier this year between Michalski and senior Boeing executives were a prelude to the brief but intense negotiations over job security, the 737 Max assembly location, workers’ pensions and a program to allow members to share in the success of the company.

While resolution of the National Labor Relations Board (NLRB) case against the Boeing Company was not specifically addressed in the terms of the new contract, the IAM declared it would consider the matter settled once the contract was ratified and the new job security provisions were in place. “I have contacted the NLRB to advise them of the ratification results and requested they initiate the appropriate steps to withdraw the complaint without delay,” said Michalski. “Despite an unprecedented level of harassment, intimidation and partisan political pressure, the NLRB and its officers measured up to the highest standard of grace under pressure. They deserve the thanks and admiration of every law-abiding American.”

FMI: www.boeing.com, www.goiam.org