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Originally published October 1, 2012 at 11:49 PM | Page modified October 2, 2012 at 4:33 PM

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SPEEA rejects Boeing contract, heads back into talks

Members of SPEEA, Boeing's white-collar engineering union, overwhelmingly voted Monday to reject the company's contract offer. The two sides will return at 1 p.m. Tuesday to the bargaining table, where negotiations could continue for months.

Seattle Times aerospace reporter

Past SPEEA contracts

1999: After negotiating into 2000 and conducting a 40-day strike: A three-year contract with salary increases of 5 percent, 4 percent and 4 percent, respectively. Monthly pension benefit raised from $40 per year of service to $50 per year of service.

2002: A three-year contract with salary increases of 5 percent, 4 percent and 4 percent. Monthly pension benefit raised to $60 per year of service.

2005: A three-year contract with salary increases of 6.5 percent, 4 percent and 4 percent, respectively. Monthly pension benefit raised to $70 per year of service.

2008: A four-year contract with salary increases of 5 percent each year. Monthly pension benefit raised to $83 per year of service.

Source: Boeing, SPEEA

The Boeing offer SPEEA voted on

Compensation: Including salary and medical-plan changes, overall compensation for engineers is raised 3 percent annually, and for technical professionals 2 percent annually. That compares with 5 percent annual salary increases in the previous contract.

Pension: The basic monthly pension benefit goes up from $83 per year of service to $91 per year of service. This benefit was raised $13 in the previous contract.

Additionally, new hires starting in 2013 would move to a 401(k) retirement plan instead of the traditional defined-benefit pension plan.

Medical: Average employee contributions for premiums, deductibles and co-pays will rise from $2,000 per year to $4,100 per year.

Contractual guarantees: The union objects that changes to administrative rules governing retiree benefits and medical-plan benefits potentially leave full access to those benefits to the company's discretion. Boeing declined to discuss the issue with the media.

Source: SPEEA, Boeing

Websites for both sides

SPEEA contract page: www.speea.org/Bargaining_Units/PS_Prof_Tech_Unit.html

Boeing: boeing.com/speea-negotiations/

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As expected, members of Boeing's white-collar engineering union overwhelmingly voted to reject the company's contract offer.

The count was just 608 to accept the contract and 15,097 to reject, or 96 percent.

As the result was announced, a loud chant started and was taken up by the crowd of assembled union officials and volunteer ballot counters: "Chicago, can you hear me now!"

The immediate effect of the vote is that the two sides will return at 1 p.m. Tuesday to the bargaining table, where negotiations could continue for months.

The result tilts the balance of the contract struggle, delivering a setback for Boeing, whose top corporate executives work in Chicago, and strengthening the bargaining power of the leadership of the Society for Professional Engineering Employees in Aerospace (SPEEA).

The union represents more than 23,000 Puget Sound-area employees, engineers and other technical professionals. Union officials said SPEEA members plan to keep pressure on the company with rallies and marches at the factories on Wednesday.

The mail-in ballots were counted and the vote outcome announced late Monday night in a room at the union's Tukwila headquarters, where a projection on the wall showed a large caricature that tweaked the name of a popular video game into "Angry Nerds."

At the count, SPEEA executive director Ray Goforth said the company throughout the negotiations seemed to doubt that the union really spoke for its members.

"Hopefully, now that we've disposed of that issue, the company will start to engage," Goforth said.

Boeing, in a message sent to employees late Monday night, said the company is "committed to continuing discussions, answering questions and considering any proposals or counterproposals from your negotiations team."

Boeing's message added that while Saturday is the expiration date of the contract, it remains in effect until Nov. 25 and that no strike can take place before then.

On Nov. 25, the Sunday after Thanksgiving Day, the contract will terminate as a result of SPEEA filing a 60-day termination notice, as permitted by the terms of the current contract.

Goforth said he expects the bargaining ahead to be difficult.

He said he finds it "really troubling" that the company inserted language throughout the contract that the union interprets as giving management unilateral authority to make administrative changes — for example, to change what procedures are covered by a medical plan or even to eliminate retiree medical benefits.

If Boeing won't remove that language, Goforth said, "I can't imagine the negotiating team agreeing to any contract, no matter how good the economics are."

Boeing executives have insisted that the changes to the contract language were purely procedural and that, for example, the company has no intention of eliminating retiree medical benefits.

There is clearly a high level of distrust between company executives and union officials.

Goforth has warned of a potential strike if the talks fail, though that prospect remains far off despite this initial vote.

The union, whose members are highly paid professionals, has had only one serious strike — when the engineers walked out for 40 days a dozen years ago.

While the union wields the threat of a damaging strike, the company has also been talking tough.

Speaking to the editorial board of The Seattle Times last week, Boeing engineering leader Mike Delaney insisted that if the union drives too tough a bargain, it will harm its own members in the long run.

Delaney warned that if the company is forced to give local employees higher compensation and benefits than they would earn in other markets, Boeing will slowly but inevitably move engineering work out of the Puget Sound region — especially high-end tasks developing new airplanes, as well as defense projects.

Yet the initial rejection of the contract offer could clear the way for the beginning of real bargaining.

Because union officials decided the company wasn't listening sufficiently during the negotiations leading up to contract expiration, they chose to put this initial offer to a vote rather than continue negotiations.

Boeing management complained that this tactic denied it the chance to tweak the offer in ways that might have addressed some of the union's issues and made the offer more attractive to members.

Now Boeing will have a chance to make those amendments.

It looks like the first sticking point will be the interpretation of the problematic contract language. After that, the two sides will still have to hammer out the economic details.

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

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