Machinists, Boeing nail down contract

The Machinists strike at Boeing looks all but over as union members reacted enthusiastically to details of a tentative agreement reached over the weekend.

The company has agreed to change the terms of its last offer, which was overwhelmingly rejected Sept. 1, to meet union demands for higher pension benefits and no increase in workers' costs for medical coverage.

Boeing Commercial Airplanes Chief Executive Alan Mulally negotiated directly with Mark Blondin, District 751 president of the International Association of Machinists (IAM) union.

Secret talks took place Friday in a Washington, D.C., office building used by former House Minority Leader Dick Gephardt, who was hired by Boeing to help woo the union.

According to Blondin, he shook Mulally's hand and said "We've got a deal" on the principal terms of a new three-year contract. Fine-tuning and attorney approval of the language occurred Saturday.

Gephardt, whom the IAM endorsed for president last year, attended the talks with Mulally, as did lead negotiator Jerry Calhoun.

On the union side, Blondin was backed by IAM national President Tom Buffenbarger.

Information

Machinists negotiations page: www.iam751.org

Boeing's negotiations page: www.boeing.com/special/negotiations

The 18,300 members of the IAM here, in Wichita, Kan., and Gresham, Ore., will vote on the tentative agreement Thursday.

With the union getting much of what it asked for, ratification seems likely. The union leadership is recommending acceptance.

Workers could be back on the job as soon as the third shift Thursday night.

"I give credit to the membership. They had the resolve and integrity to stand up for each other," Blondin said. "[Boeing management] saw the union is rock solid."

In a message sent yesterday to all employees, Mulally said, "We believe this settlement provides what IAM-represented employees say they want in this contract, where they want it."

He said "the total cost to Boeing is similar to the previous contract offer and meets our definition of a reasonable settlement."

The agreement was enthusiastically received on the Machinists' picket lines yesterday.

"I think it's going to be about a 100 percent" vote for the agreement, said Jerry Moore, 60, an Auburn machine operator and 27-year Boeing veteran standing outside the old Boeing headquarters in Renton. "It's a major win."

For a work force with an average age of 50, retirement benefits mattered more than wages.

The union had therefore asked for no pay increases, instead demanding higher pensions and containment of health-care contributions.

But Boeing's pre-strike final offer included wage increases and a 401(k) matching contribution plus incentive pay linked to productivity — all off-set by increased health-care contributions and a smaller increase in the pension benefit.

The new agreement took away the pay increases and 401(k) match in favor of:

• Increasing the pension benefit to $70 per month per year of service, up from the existing $60 a month and $66 a month in the rejected offer.

• Maintaining the current health-care premium payments and co-pays.

• Guaranteeing new hires will get the same retiree medical benefits as current workers.

• Receiving an 8 percent bonus (averaging $5,200 per employee) within 60 days of contract ratification and $3,000 lump sums in the second and third years of the contract.

The settlement also includes non-economic terms favorable to the union. They are:

• Vendors will not be allowed to install parts on airplanes, as current contract language permits. Only IAM forklift drivers will be allowed to move parts to the production lines and IAM mechanics will install them. This considerably softens a concession the company forced upon the union in the last contract.

• Management and the union agreed to work together on assessment and training of factory-floor team leaders, with seniority becoming a deciding factor if all else is equal. This slightly softens the terms of another imposed concession that had irked the union.

• The 960 employees in the Wichita unit will receive the same terms as the Puget Sound area workers.

The union got no agreement to ensure job security.

National IAM leader Buffenbarger said the strike could have been avoided if the company had listened to the union, instead of trying to go around it.

"What caused this strike was a wall, a degree of separation, between the employees and top management," he said. "They weren't listening to the employees."

"When Alan [Mulally] came to the table, Alan did the talking and Alan did the listening," Buffenbarger said. "I appreciate his listening."

As late as Friday afternoon, Boeing executive Scott Carson spoke publicly about the need to hold the line against the union to keep costs competitive with European rival Airbus.

A Boeing internal analysis of the costs of a strike, prepared in March before negotiations began and obtained by The Seattle Times, estimated that a four-week strike would mean delivery of 31 fewer airplanes this year, reducing revenue by $2.15 billion.

However, a recovery plan that included accelerated production of the 777 and the 737 jets after a return to work would cost the company less — $169 million in profit.

The strike outcome with the IAM may encourage the company to come to terms earlier in the imminent talks with its white-collar union, the Society of Professional Engineering Employees in Aersopace (SPEEA).

Certainly the benefits provisions the IAM has negotiated will be a starting point for SPEEA, with whom talks begin in earnest Nov. 1.

Blondin said he hoped the strike outcome could lead to a better relationship between the company and the IAM.

"If everything works well over the next 2 ½ years, and we don't see the company coming after us, I think we can go into the next agreement with positive results and keep this company moving forward," he said.

Outside the old Boeing headquarters yesterday, Bill Frans, 53, an Auburn quality inspector who's been on the picket line four times in his 32 years at Boeing, said this is probably one of the most successful strikes he's seen.

In a relatively short strike, as he sees it, the union has stopped significant company take-backs.

"If the take-aways are off the medical and they're not selling Wichita down the river, that's good for me," Frans said.

"I'd vote for it twice."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Vanessa Casavant contributed to this report.