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ST. LOUIS (
TheStreet) - It puzzles the International Association of Machinists that
Boeing(BA - Get Report) so firmly desires to keep future workers from a defined benefit pension plan.
It is possible the conflict will lead to a strike on Monday by 2,500 Boeing workers who make F-15 and F-18 jets. These members of IAM Local 837 will take a second strike vote on Sunday. In an earlier vote, they backed a strike by a 1619-459 margin, and Boeing has not altered its intent to establish a defined contribution 401K plan for new hires. The proposed pension plan change is so important that both sides seem willing to risk a strike over it.
"It's something our members cannot understand," said Mark Blondin, the IAM's national aerospace coordinator. "(Some) other companies are happy to offer defined benefit pension plans."
The Boeing workers in St. Louis, many of them older, belong to a pension plan that was established by McDonnell Douglas and taken over by Boeing. As another option, the IAM offers its own plan, which has assets of $7.3 billion and 104,000 active members. Blondin said its costs are lower than the cost of the Boeing plan. "A lot of companies jump on it," he said, because they are relieved of pension funding responsibilities that many companies view as inordinately rigid.
We Still Like Boeing
In 2009, Boeing introduced a 401K plan for all new-hire, non-union employees. Boeing spokesman Paul Guse said the plan is in place at other Boeing sites, including some with unionized employees.
"Companies including Boeing are shifting to these kind of plans to ensure we provide the benefits package preferred by our future workforce and to align with peer company practices in offering plans that are portable and give control for financial decisions to employees," Guse said.
However, in recent deals with the IAM, Boeing suppliers
Spirit AeroSystems(SPR - Get Report) and
Triumph Group(TGI - Get Report) both preserved defined benefit pension plans.
In 2005, about 16,000
United(UAUA) agents, ramp workers and stock clerks, represented by the IAM, approved a new contract with $700 million in wage and benefit reductions. The contract includes a defined benefit pension plan, which no other United workers have.