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Originally published Thursday, August 28, 2008 at 12:00 AM

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Boeing raises its contract offer to Machinists

Boeing delivered its "best-and-final" offer to Machinists union officials, raising its proposed wage increase to 11 percent over three years.

Seattle Times aerospace reporter

Machinists' current Boeing contract (2005-2008)

This contract expires Sept. 3, the day union members vote on a new contract.

Wages: The majority of Machinists are classified as skill grade 3 or 4. A new-hire grade 4 Machinist starts at $12.72/hr. and progresses in six years to the top of the scale at $27.13/hr.

Bonus payments: Upon ratifying the 2005 agreement, Machinists received a bonus equal to 8 percent of gross pay including overtime in the preceding year, about $5,200 for a typical Machinist. In 2006 and 2007, each Machinist received $3,000 bonuses.

Cost of Living Adjustment: Each quarter, a formula based on a federal index bumps up wages for a typical Machinist by about half the increase in the cost of living.

Basic Pension: Boeing pays a monthly pension of $70 per year of service.

401 (K): Boeing matches 50 cents for each dollar of employee contribution, up to 8 percent of gross salary.

Early Retiree Medical: To cover the gap before qualifying for Medicare, employees with at least 10 years of service who retire early from age 55 can enroll, along with their dependents, in the company medical plan. For those hired before 1993, there are no monthly payments. For employees hired from 1993 on, the company pays 3.33 percent of the premiums for each year of service.

Medical Plans: Three plans covering employees and their families are offered to Washington state employees, including one with no monthly deductions.

Source: Boeing, IAM

Boeing delivered its "best-and-final" offer to Machinists union officials this morning. The offer drops the final "take-away" from the current contract that the company had put forward and further improves the proposed wages and pension.

The offer raises the wage increase to 11 percent over three years and the basic monthly pension to $80 per year of service, up from $70 in the current contract.

Boeing also as dropped its proposal to end early retirement benefits for future hires.

The offer also includes a ratification bonus of $2,500, plus a separate lump sum bonus in the first year equal to the greater of 6 percent of gross pay or $2,500.

The proposal also includes a new incentive pay plan, the details of which the union has criticized. That won't kick in until the third year of the contract and the company says it will discuss the details with the IAM.

Boeing estimates that on average Machinists will get an extra $34,000 in extra compensation over three years with this proposal compared to their current contract.

Machinists union spokeswoman Connie Kelliher said union officials are reviewing the details of the offer line by line and would comment later today.

Boeing sources insisted that this offer will not change before the rank-and-file Machinists vote on Sept. 3.

A top Boeing executive, who asked for anonymity so that he could speak freely, said Wednesday the company had been very disappointed in the lack of progress during the talks at the Seatac Doubletree.

In taking the position that it won't consider changing the offer again before the vote, Boeing is gambling that it can bypass the union negotiators and go for a yes vote without them.

The company needs only a 34 percent yes vote to avoid the two-thirds majority that would trigger a strike.

In 2002, a 62 percent majority rejected the contract, and that outcome left much bitterness which Boeing feels made the strike in 2005 almost inevitable.

This time, Doug Kight, Boeing vice president and lead labor negotiator, is hoping for majority approval by rank-and-file Machinists.

"This offer represents the best package of pay and benefits in the aerospace industry," said Kight in a statement. "At the same time, it's a contract offer that allows our company to meet its commitments to customers and sustain our success into the future."

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

Copyright © 2008 The Seattle Times Company

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