SPEEA, Boeing contract: Don’t expect an “IAM breakthrough”

SPEEA, the engineers union at Boeing, and the company appear to be at odds in the early stages of contract negotiations and there appears virtually no chance of a surprise breakthrough similar to the IAM 751-Boeing contract last December.

People familiar with the situation on both sides say they are hunkered down for traditional contract negotiations in advance of the October 4 amendable date.

SPEEA suggested in June 2011 that both sides go to binding arbitration as a first, not last step as a way to speed up a contract and avoid protracted, potentially contentious negotiations. Boeing declined, according to SPEEA and confirmed by a person familiar with the Boeing position. According to two sources, Boeing didn’t want to give up decision-making to a third party. Boeing also didn’t see the urgency or need to avoid normal contract negotiations, according to the person familiar with the Boeing thinking.

SPEEA has publicly detailed its side of negotiations on its web site. Its Executive Director, Ray Goforth, also gave an interview with the Puget Sound Business Journal that was posted July 30. The Everett Herald has this story.

Boeing isn’t saying much of anything, though it did give some brief statements to The Herald. Boeing’s tight-lipped approach is in sharp contrast to the very public 2008 contract negotiations with the IAM. At that time, Boeing was accused by the union leadership of negotiating in the press and on a dedicated website, trying to go over the head of the leadership and negotiating team directly to the membership. Management felt that its offer was so attractive that members would vote “in their own best interests” once they received what Boeing felt was a fair understanding of the terms of the offer.

Executives were stunned with more than 80% of the members voted to reject the contract offer and authorized a strike. The members walked off the job a few days later for 57 days.

SPEEA, which has struck only once in the last 10 years and then for only a couple of days, is considered by all parties and observers to be less militant and less likely to strike than the IAM 751.

There is also no pressing issue to come up with an IAM breakthrough as there was last December when Boeing was holding hostage the assembly site for the 737 MAX. Although there was near-unanimous opinion that assembling the MAX anywhere but Renton, where the 737 NG is assembled, was looney, it was clear corporate headquarters in Chicago was going to hold out this possibility over 751’s head. Common sense prevailed on both sides and after secret negotiations, the company and the union announced they agreed to extend the contract by four years, well in advance of the September 2012 amendable date.

The agreement was heralded as a new era in labor negotiations. Until now.

SPEEA is clearly engaging in a public campaign over current contract negotiations. Boeing, according to a person familiar with the company’s thinking, is content to let negotiations run their course.

“We offered to simply extend our current agreement,” Ray Goforth, SPEEA’s executive director, tells us. “Boeing rejected this and is talking across-the-board cuts. Boeing refuses to give us a proposal (we gave them a complete proposal in June)…..but what they’re talking at the bargaining table is:”


Elimination of pension for new hires and replacement with a 401k that pays 40% less benefit according to Boeing’s own pension actuary.

We’ve responded that we understand their reasons for wanting to eliminate the pension but we can’t even begin to entertain such a thing unless we’re talking about a replacement vehicle funded well enough to provide an equivalent retirement benefit Even then, unwinding the pension is horribly complex and would take time and process to jointly work through the issues. 


Boeing wants at least a 40% reduction in the rate of salary growth.  This means reducing our salary pools from 5% to 3% or lower.  Because of a thing we call leakage (higher salaried employee’s retire and are replaced by lower salaried new hires) a 5% salary pool in reality is actually only about a 3% payroll cost.  So Boeing wants to reduce actual payroll growth to somewhere between 0-1%.

Our engineers are currently 1-2% below the 50th percentile for high tech manufacturing (they’re currently paid below market).  Our techs are about 1-2% above the 50th percentile but there are some apples and oranges problems in that comparison (Boeing uses techs in a much more sophisticated way than many of the comparators).

Boeing left the machinists 18% over the 50th percentile for their market in their last contract.  Boeing’s ideas would drive the engineers in particular under the 50th percentile.  That’s a bitter pill to swallow for engineers who feel that they saved Boeing from a 787-driven bankruptcy.


We’re probably closest on medical.  Boeing wants to instill consumerism and healthy lifestyle choices. We agree in concept.  We want carrots to drive such choices.  Boeing wants sticks…..plus a big cost shift just for the heck of it (a net increase of 18% in costs to our members).

So the summary is 40% less retirement benefit; 40% less salary growth; and 18% increase in medical costs.

“At a time when the CEO compensation just increased 30%, the shareholder dividend just increased, and the company has a record order backlog this is perceived as an obnoxious bargaining stance,” Goforth says.

  1. On an interesting side note:  8% of the engineering workforce are contractors.  Boeing keeps telling us that they can’t bring these employee’s on direct because they don’t want to be regular employees….that they like the contractor lifestyle. SPEEA decided to survey the contract engineers and the answers blew all sorts of holes in the answers Boeing had given us.  Boeing responded by threatening legal action if we talk to the contractors anymore.

For its part, Boeing is remaining tight-lipped. It’s known that Boeing wants to mimic some of the pay-and-benefits to SPEEA to that provided non-union, management personnel. Boeing is also sticking with its preference for having a fair number of engineering contractors, saying that in the event of layoffs the contractors would be the first to go. SPEEA believes the contractors should become employees (and SPEEA members).

12 Comments on “SPEEA, Boeing contract: Don’t expect an “IAM breakthrough”

  1. . . .SPEEA, which has struck only once in the last 10 years and then for only a couple of days, is considered by all parties and observers to be less militant and less likely to strike than the IAM 751…


    In the year of ” our Hairy S ” aka 2000, SPEEA was on strike for about 40 days. It was then and still may be the largest white collar strike in the U.S, with about 17,000 plus on stike.

    The only previous strike by SPEEA was a one day strike ( mostly informational ) in about 1994.

    And another note – The bit about an arbitrator type settlement – was put forth by Ray Goforth, without the concurrance of the Council(s)- probably because he was used to working for a public employees union.

    I am surprised that the Negotiating Teams have elected/appointed Ray as spokeperson

    Just ONE of the reasons the previous Executive Director- Bofferding was dismissed had to do with his interference and bullying tactics with the Wichita unit which resulted in decertification for several thousand SPEEA types in 2007.

    • Don, the author did say “only once in the last 10 years.” Since the current year is 2012, your reference to 2000 is a bit off track. That’s all.

      • Alex :
        Don, the author did say “only once in the last 10 years.” Since the current year is 2012, your reference to 2000 is a bit off track. That’s all.


        Please read what I said – the statement re the two day strike was TOTALLY WRONG

        The ONLY other ” strike ” or ” similar picket ” was an informational picket in 1994 for One day to protest the then company offer. { I know cuz I participated that day ] Or IOW there has been NO strike ( or similar ) by SPEEA in the last decade.

        It would be a major stretch to call that 1994 picket a strike. However the 2000 STRIKE WAS EXACTLY THAT- COMPLETE WITH BURN BARRELS and other UNION support .IAM could not strike/walkout by virtue of their contract- just as SPEEA could not walkout during the IAM strike. But they could and did provide bucu moral support and work to rule efforts.

        Railroad workers and others would not cross the line for example.

      • Minor change – year was 1993 not 1994

        Speea To Set Up Picket Lines

        By Himanee Gupta

        After a two-week holiday hiatus, the Seattle Professional Engineering Employees Association plans to set up informational picket lines at 13 sites Thursday.

        SPEEA, The Boeing Co.’s second-largest union, represents about 15,000 engineers and 13,000 technical workers at Boeing, about 60 percent of whom belong to the union.

        Relations between the union and aerospace giant have been tense since workers rejected the company’s contract proposals Dec. 7.

        After declaring an impasse in bargaining, Boeing implemented key provisions of the contracts. Neither side has communicated with the other since, and no new talks have been scheduled.

        The picketing at several sites in Auburn, Everett, Kent, Renton and near Boeing field will be strictly informational, said Charles Bofferding, SPEEA’s executive director. Picketing will also take place at Boeing plants in Portland and Spokane.

        SPEEA members are instructed to picket only on public property, during their 40-minute lunch breaks between 11:30 a.m. and 12:40 p.m.

        The goal, Bofferding said, is to refocus Boeing’s attention on the workers’ complaints. Workers rejected Boeing’s proposals primarily because they contained little in the way of general wage increases and no cost-of-living adjustments.

        “We basically want to show Boeing they’re ignoring the needs of their own employees and that we’re committed to returning to the table and seeing a satisfactory solution,” he said.

        Copyright (c) 1993 Seattle Times Company, All Rights Reserved.

  2. The contractor issue is not so cut and dried. I would guess that the younger, less experienced (say less than 5 years experience, maybe up to 10) “contractors” are those that SPEEA spoke with and I am sure that they would love to be taken on as Boeing employees. But then again to call these people contractors is the biggest scandal that industry has pulled on employees over the past 15 or so years. Basically you take a kid fresh out of university and tell him/her that he/she can work for you but that they don’t have the budget to hire them as a full time employee but they can work as an independent contractor, hence they are “self employed” and have all these great tax benefits and so forth and so on. But the pay is ridiculously low, there are no benefits and no payed holidays. SInce they have no other option, they take this offer and the company is happy as they know they have in 80 to 90% of the cases, a cheap and reasonably stable work force.

    Welcome back to the industrial era of Dickens. Yes folks, we are devolving, not moving forward.

    Some eventually get jobs with other companies, often working on work packages for companies such as Boeing, some get offered a permanent job after 5 years of “contracting” and others …
    Who knows?

    By the way, the same dubious practice goes on at Airbus and Bombardier as well as various other miriad companies and industries throughout North America and Europe.

    As for the contractors that Boeing was probably speaking with, we are then talking about people with over 10 years of experience in the aerospace industry and fetch a much higher rate of pay. For them, it is much more lucrative to stay as contractors, even if they might be the first out the door if things go badly. They might not be so keen on becoming permanent employees of any company.

    It is always a matter of whom you talk to.

    I do find Boeing’s response to SPEEA’s speaking with contractors to be extreme. It certainly can’t help the situation.

    Seems like SPEEA is sick of being called dependable, less militant and not likely to strike. If Boeing really sees it this way, they may be in for a big shock. I think the SPEEA membership is slowly getting sick of being mistreated, ignored and possibly underpaid.

  3. One other (relatively minor) correction: Boeing’s contracts with SPEEA and the IAM have actual expiration dates, rather than “amendable” dates.

  4. Aero Ninja :
    Welcome back to the industrial era of Dickens. Yes folks, we are devolving, not moving forward.

    It’s like that across the industry. Even in governments. It’s a new era. Many employers are becoming increasingly abusive. That attitude is what brought the unions in originally. Then the unions started to become abusive themselves. It’s a vicious circle.

  5. Well ” contractors ” are considered no different for company tax and accounting purposes than a special purpose chair, table or machinery, and can be ” purchased ” as such for a specific project. And Boeing ( at least used to ) (had) more than a few ‘ contract ” engineers that were more properly claimed to be perma-temps, having been on contract status for many years.

    And on a long ago program, as a regular employee, I and a few others were asked to take our extra- unused vacation time in addition to the Xmas holidays since the contractors working on the program said they would quit if they were NOT allowed to work Overtime over those same holidays, thus making the labor funds allocated short of programmed . . .

    Contractors do not get vacation time or holidays. but they did get overtime !!

    • Forgive me if I gave you the wrong impression of “experienced” contractors. The overtime certainly makes it lucrative for them.
      I am surprised though that they ever had the clout and ability to work together to achieve such a threat.
      Was there ever a payback?

      • Virtually all contractors are hired thru a labor agency who pretty much set the terms for pay and perks- such as parking passes, etc. And depending on need/schedules/ etc the contractors generally get wages above the employee grunts ( to compensate for the lack of benefits ). As a result, there are many things the contractors can do that would get an employee disciplined or fired- such as speeding on company property, telling the gate guards to F off , taking long smoke breaks, etc. Again, depending on ” need”. I’ve worked with some VERY sharp contractors, and also had some major dumb jerks working for me at various times. Again depending on ‘ need” and particular program..


    Boeing violates labor law during orientation

    SPEEA filed Unfair Labor Practice (ULP) charges against The Boeing Company on Tuesday (Aug. 21) after a representative from Boeing Ethics, during new hire orientation on Friday (Aug. 17), told employees they are prohibited from saying “bad things” about their employment. Such discussions by union members are protected by the National Labor Relation Act (NLRA). Employers’ efforts to curb these discussions violate federal law.

    In addition to this obvious violation of labor law, SPEEA has received numerous complaints from employees about managers telling them to remove and not display union material at their personal workstation. Employees also report finding union-related items removed from individual work areas when they arrive at work each day.

    SPEEA asks members to document any such conversations with managers or the removal of items from their desks and then relay the information to union officials. Information is being compiled by SPEEA. Email your information to: speea@speea.org.

  7. Pingback: Is Boeing Chicago misreading the SPEEA mood–as it did IAM 751 in 2008? « Leeham News and Comment

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