Members of Boeing’s white-collar engineering union approved a six-year contract with a favorable vote of more than 70 percent, the Society of Professional Engineering Employees in Aerospace (SPEEA) said Wednesday.
The contract guarantees an average 5 percent annual increase in compensation for five years, significantly slows down growth in members’ traditional pensions from 2019 on, and adds new provisions for members whose jobs are moved.
“With this new contract in place, we can focus on working together to design and engineer the best airplanes at the right price for our airline customers,” said Vice Chairman and Commercial Airplanes CEO Ray Conner, who oversaw contract negotiations. “This agreement helps position us for continued success in a highly competitive landscape.”
The pact covering nearly 21,000 professional and technical employees was negotiated in secret and unveiled last month. The process was a stark contrast to the bitter public drama of the previous contract talks, in which union members rejected Boeing’s first proposal, then reluctantly endorsed a deal with an improved wage package.
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“These agreements were not easy, but each grew from a strong desire on both sides to find common ground and negotiate contracts that work for SPEEA members and Boeing,” said SPEEA President Ryan Rule. “It was a unique opportunity that allowed these early contract talks. We’re glad it worked.”
Engineers in the professional unit voted 6,085 to 2,460 in favor, while the union’s technical workers unit voted 2,825 to 1,030, according to SPEEA statement.
Members will receive average 5 percent annual compensation increases from 2017 through 2021, then a 4.5 percent increase in the final year, 2022.
That’s essentially maintaining the increases in the current contract for six more years. However, the extra pay in any year may come only partly from a salary increase, with the rest in the form of a lump-sum bonus — which diminishes the value of the increase in subsequent years.
In another union concession, the deal will impose a “soft freeze” on the traditional pension from 2019 on, union benefits director Matt Kempf said last month.
The SPEEA pension — a function of both credited years of service and final average earnings — will stop accruing additional years of credited service but will still be bumped up by final earnings upon retirement.
“The benefit will continue to grow until retirement, though more slowly,” said Kempf.
In compensation, Boeing will bump up the company’s current 401(k) contribution by 9 percent of gross salary in the first year of the freeze, 8 percent in the second year, 7 percent in the third, and thereafter by 3, 4 or 5 percent annually, depending on the employee’s age.
That’s on top of the company’s existing 401(k) match of up to 6 percent of gross salary.
SPEEA leadership, which endorsed the contract proposal, said last month that with this contract the company “is committing to use exhaustive efforts to place individuals” whose jobs are moved out of state, as Boeing has done with some 4,300 engineering jobs since 2013.
For workers who are laid off, the contract provides from 26 to 60 weeks of pay, based on two weeks per year of service, and six months of health benefits.