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Boeing Alters Contract Offer to Machinists

The company withdraws a request to take new employees out of the pension plan.
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made a new contract proposal to 27,000 unionized workers Tuesday, removing a key stumbling block to negotiations when it withdrew a request to take new employees out of the company's pension plan.

Still, a strike threat still looms. In previous talks with Boeing, as well as with



, the International Association of Machinists has made worker participation in a defined-benefit pension plan a strike issue.

Until now, Boeing was proposing the creation of a new defined-contribution retirement plan for its employees hired after Jan. 1, 2009.

"That's a real positive," says Mark Blondin, the IAM's lead negotiator, in an interview. "I'm glad they moved that off the table. We are making progress, but they have a long way to go."

Union leaders will meet Tuesday night to craft a counterproposal, which they will submit Wednesday. Boeing says it will present its "best and final offer" by the weekend. Workers will vote on the final proposal on Sept. 3, and could strike as early as the following day if they reject it.

While Boeing has backed down on two key strike issues -- the pension and a plan to offer workers in Wichita, Kan., a separate contract -- it is still making three proposals that Blondin says would guarantee a stoppage.

One regards subcontracting. Although Boeing offered Tuesday to withdraw proposed changes on subcontracting, the two sides remain far apart. "We are pushing better language to protect our workers when contractors perform craft work, like electrical, plumbing and maintenance, and we want to stop vendors from doing their work," Blondin says. "There are few restrictions now."

Additionally, Blondin says, Boeing must withdraw a bid to charge future retirees for health care and continue to improve its financial offer. On Tuesday, the company proposed a 9% increase over three years.

In a message to employees, Boeing said it was working to get to a contract and noted the average worker would gain $28,000 in additional wages and incentive pay during its proposed three-year agreement.

"Since presenting our first offer, we've spent a great deal of time meeting with the IAM to focus on their contract priorities," wrote Boeing lead negotiator Doug Kight. "We have made substantial movement in pay, pension and health care. We've withdrawn key proposals that were important to the company but of concern to the union. We have been negotiating for more than four months, we've had a thorough discussion of all of the issues, and we are near the point of presenting a best and final offer that rewards Boeing employees for their great work while allowing the company to sustain our success in the future."