SPEEA contract terminates Nov. 25

The Everett Herald has this story.

The Seattle Times has this story.

Sunday, November 25, is a critical date in the looming confrontation between Boeing and its White Collar engineers union, SPEEA. This is the date the current contract terminates.

After this date, both sides are basically free to escalate short of a lockout or a strike. SPEEA is gearing up to have another contract vote and the leadership has already basically rejected the second Boeing offer. A strike vote still has to be taken before SPEEA could strike. Based on our conversations, we don’t see the prospect of a strike until after the first of the year–if at all. The union isn’t known for its willingness to walk out.

After members rejected Boeing first contract proposal with a 96% vote, things initially appeared to improve between labor and management. The good will turned out to be short-lived.

Rhetoric is heating up and by all appearances, it seems that SPEEA may well be headed toward a second contract rejection. Work-to-rules and refusal of voluntary overtime is already underway. Large demonstrations have taken place.

What happens after the contract terminates remains to be seen. We’re not optimistic about the next several weeks.

9 comments on “SPEEA contract terminates Nov. 25

  1. As usual- the PR on both sides makes it difficult to figure out what is really going on.

    IMHO – folks are going to have to get used tom pay more for medical, what with Obuma care and cost shifting going on. Consider that as a retiree- with the Boeing supplemental to medicare, premiums taken out of my pension check – I pay $6000/year for my wife and I.

    One reason is that Boeing supposedly spreads ( without jelly ) all medical costs across all grunt employees and retirees- a decade ago the costs for both of us was about 1/5 current.

    I’ll have more to say later on Pension gotchas

  2. The following will be broken up into two posts- It has to do with the Alternate Pension Benefit Calculation as part of the Boeing Plan- known as BCERP. Boeing has indicated no change in this formula- and it relates to the comments regarding pension and Social security ( Covered Compensation) which is the 35 year average of SS compensation.

    Few realize that for many months- each year- Pension calculations are flat or nearly so due to the calculation. This has been going on for decades- with the result that the ‘ high earners’ get subtly hosed. And it now appears that for the first time ever. SPEEA has attempted to make this an issue- although in a somewhat confused manner.

    From Jan 1, 2008 BCERP Document 001_BOEW4A.doc ( This is the LEGAL PLAN DOCUMENT, which is the FINAL word according to SCOTUS.

    The following extracts are for the Alternate Benefit formula which will apply to the majority of SPEEA retirees over the next three or four years with over 20-25 years of service.

    The most recent Boeing statement on this formula is NO change mentioned.

    1.26 Final Average Monthly Earnings
    “Final Average Monthly Earnings” means the average of the Basic Annual Compensation
    Rates on the first day of each eligible calendar month during the 60 consecutive calendar
    months out of the last 120 such months which produce the highest such average divided
    by 12. An eligible calendar month is defined as a month in which the Participant is
    employed by the Company on the first day of the month and performs at least one Hour
    of Service during the month. If the Employee has fewer than 60 months of such service
    then Final Average Monthly Earnings shall mean the aggregate amount of Basic Annual
    Compensation Rates divided by the actual number of months divided by 12. If the
    Employee retires from the Active Payroll of the Company, the Employee will be deemed
    to have performed service for the Company on his or her Retirement Date at the Basic
    Annual Compensation Rate in effect immediately preceding retirement.

    . . .An Employee shall be credited with 45 Hours of Service for each week beginning !
    on or after the applicable effective date of this Section, or any portion of a week if !
    the Employee is paid for less than a week, for which the Employee:

    (c) Final Average Benefit
    Final Average Benefit, effective January 1, 1993, is equal to (1) plus (2):
    (1) The Core Benefit, a monthly amount equal to the product of 1.025%
    multiplied by the Participant’s Final Average Monthly Earnings and
    Credited Service.
    (2) The Excess Benefit, a monthly amount based on the excess, if any, of the
    Participant’s Final Average Monthly Earnings over his or her Covered
    Compensation divided by 12. The monthly amount is equal to the product
    of this excess multiplied by .450% and the Participant’s Credited Service.

    +++
    COVERED COMPENSATION IS THE 36 YEAR AVERAGE OF SS COMPENSATION AND A FUNCTION OF BIRTH YEAR BASED ON AGE 65 AT RETIREMENT.
    IRS TABLES CAN BE FOUND AT http://www.irs.gov/pub/irs-drop/rr-12-05.pdf

  3. COVERED COMPENSATION IS THE 36 YEAR AVERAGE OF SS COMPENSATION AND A FUNCTION OF BIRTH YEAR BASED ON AGE 65 AT RETIREMENT.
    IRS TABLES CAN BE FOUND AT http://www.irs.gov/pub/irs-drop/rr-12-05.pdf

    For example for 2013, Covered Compensation is $67,200, and for 2014 $69,696 and increase of 3.7 %. Effective on Jan 1 every year.

    ++++

    OK- so what is the big deal. ?

    1) At 45 hours/week of credited service against 2000 hours year, no increase in pension $$ from November to December.

    2) The yearly increase in Covered Compensation on Jan 1 results in a no increase in Pension $$ for an additional 2 to 5 months, depending on FAE and credited service.

    3) This formula has not changed since around 1990.

    The above can easily be checked out by employees on then Boeing system

    I would suggest that for those planning to retire in the next few years do the following starting this month or starting the estimate in August or Sept of the year following turning age 60. Set your retirement date for each month from Sept to perhaps June.
    Note the change in retirement $$ Little change in Nov and december compared to August and Sept. NO change from Jan to feb, march, april depending on your numbers.

    The long term result is that many wind up getting hosed out of 3 to 5 YEARS of pension benefits.

    Cure ? Insist that the MINIMUM monthly rate of increase be based on the $$ change per month in the STANDARD OR BASIC formula.

    GET EXPERT ANALYSIS AND LEGAL HELP ON THE WORDING
    INSIST THE WORDING IN THE LEGAL DOCUMENT ON THIS ISSUE BE WRITTEN IN THE CONTRACT FOR ALL TO SEE.

    End this post

  4. It’s hard for me to think that these union-related emails are objective since the blog clearly states that Leeham is associated with both the IAM and SPEEA. As an ex-Boeing employee, I believe it is ridiculous to have an Engineering union. Please.

    • This blog is not associated with IAM or SPEEA; we link to their sites, as we do scores of others, and we talk to IAM and SPEEA as a matter of course. That’s it. The conclusion of STL Flight is in error.

      • My apologies then. I didn’t mean to disparrage this blog because this is one of my favorite sites on the internet, full of great content and fresh looks at an industry that I love.

        I do admit that I am slightly biased when it comes to unions. To me, there are basically 3 groups that are affected by the union negotiations: union employees, non-union employees at Boeing, and shareholders. Most people forget that most of the non-Commercial engineers at Boeing along with ALL program management, logistics, finance, contracts, HR, supplier management, office administrators, etc. are not a part of the union, so every dollar of concessions that the unions recieve is taken from either the other employees or BA investors.

        I believe that unions, along with almost everything in life, is like a pendulum. In the past, unions have been heroes to American industry and employee benefits, but somewhere over time they seem to have taken more than their fair share of the pie. Also, it’s very curious that Engineers actually need unions. The rest of the company accepts its benefits package based on market conditions and comparison to peer companies such as Lockheed Martin, Raytheon, and Northrop Grumman, or compared to other local employers. Engineers are in no way exposed to terrible working conditions, and inherrantly have leverage due to their technical knowledge so I never understood the need for SPEEA. I hope this is resolved quickly with a package that is not too oppressive for the Engineers because BA stock has been punished over and over due to labor disruptions.

    • STL, how long were you at Boeing? Were you a SPEEA tech or engineer, an IAM mechanic, or were you non-represented? No matter – one way or another your benefits, either partially or completely, resulted from a union’s efforts: pension, vacation, medical coverage, Boeing VIP contributions, paid sick leave, paid holidays, etc.

      If you were you a tech or engineer, were you there during SPEEA’s six-week strike in 2000? If so, did you go out on strike? If you didn’t, did you or did you not do the work of a striker? When the strike was over did you did you not accept any of the improvements resulting from the strike?

  5. re stl fight – ” Also, it’s very curious that Engineers actually need unions. . .”

    Well back in the 50’s, several engineers, realizing they were getting hosed, formed what is now SPEEA. A few later became top management, including T.A Wilson. Others who joined voluntairily were Phil Condit, Alan Mullaly, etc.

    For years, SPEEA got along fairly well with management. some management would privately admit that a union was needed to keep A*** supervisors from virtually whipping and bullying employees. Most supervisors and managers realized that union bargaining was to their advantage, since they got whatever SPEEA got PLUS. And until 1999 or so, ALL employees were under the same pension plan, exception for upper management who got the now heritage plan plus separate non qualified executive pensions.

    Then along came the MDC gang with a few GE wannabee rejects of welch, read Stonecipher, McNearney, J McDonnell, and a gaggle of aero types. ALL Anti union to the core. And still a few on the bored of directionless.

    It was that same group who hosed St louis and tulsa employees, and later, with all their military experience totally screwed up the tanker deal by playing games with BA commercial.

    And of course, after the MDC buyout of Boeing- pushed SPEEA into their first real strike.

    This is not to say that all unions are either good or bad, or push feather-bedding, or are corrupt. Neither are all aerospace company employees overpaid or underpaid.

    But one of the problems with MDC was they failed in commercial due to lack of vision and cost control, and MCDonnel and friends never learned how to survive in other than Government – Military world. The major ripoffs of their employees and even Douglas management including Donald Douglas is a matter of historical and legal records.

    Both local IAM and SPEEA have had high and low points over the years, externally with Boeing and internally with members and so called ” leaders”.

    Ditto for Boeing management.

    Having dealt with Boeing management and the Board as an engineer, an employee and stockholder during my career at Boeing, plus also working at two other aerospace companies without engineering unions, and for a few years being an equivalent of a supervisor at Rockwell El Segundo – I believe overall SPEEA and IAM has been generally positive for
    ALL

    For whatever reason – The Boeing Chicago Power Point rangers are pushing a bit hard, most likely resulting in a strike. In which case both sides lose.

  6. “For whatever reason – The Boeing Chicago Power Point rangers are pushing a bit hard, most likely resulting in a strike. In which case both sides lose.”

    .. while John Leahy inks a MOU on A350-1000s down the street..

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