IAM International president Buffenbarger rallied against pension cuts at Boeing’s IAM 837 District

IAM International President Tom Buffenbarger advocates that IAM 751 approve a contract from Boeing that freezes current pensions and adopts a 401(k) style pension for future hires. Yet Buffenbarger advocated to IAM 837 (the union District at Boeing’s St. Louis plant) reject a contract that did just this.

Here is Buffenbarger in an IAM-produced video.

34 Comments on “IAM International president Buffenbarger rallied against pension cuts at Boeing’s IAM 837 District

  1. Thanks Scott

    Larry Brown
    Legislative & Political Director
    Aerospace Machinists 751

  2. And for the REST of the story

    http://www.751voteno.com

    Actually its really sad – democracy depends on INFORMED voters to prevent the tyranny of the MINORITY.

    While DOL OLMS handles normal Officer elections in unions, it is only the NLRB that has purview over Contract Issues.

    And they did tag Buffenbarger for his 2013 elction- cuz it was done the same way as those for the last 4 or 5 decades

  3. Long time Larry. Last time was when you and Zack had to come out on the 757 and get the temps to pay union dues. 98′ maybe?

    I suggest reading through the comments of the several latest postings if you haven’t already.

  4. When the vote fails, look for Buffy to claim irregularities and throw 751 into trusteeship, and throw all of the 751 staff out.. He’s a petty dictator. That’s the way he rolls: (pages may load slowly)

    Relentless attack on democracy in the Machinists Union
    http://aud2.uniondemocracy.org/pubs/udr/relentless-attack-democracy-machinists-union

    IAM Local 2339N: Nasty aftermath to a Trusteeship
    http://aud2.uniondemocracy.org/pubs/udr/iam-local-2339n-nasty-aftermath-trusteeship

  5. It seems a bit like the Netherlands, the older wealthy employees, having a house, children moved out, union members, good pensions, agreeing with the employers to put the cost cutting, complecated pension plans, etc into the future, with the younger generations, with limited rights, families, mortages etc. No union members, just too busy..

  6. Seriously though, those pensions really aren’t going to be worth what people expect them to be. The 401k plan is a better protected legal vehicle for the employees. The money is still at risk from market fluctuations, but the money deposited or matched by the company is legally the employees. In recent years companys have been filing bankruptcy just to discharge their pension burdens.
    If I were in a union today, I would give up the pension and fight hard for a good corporate matching benefit. A well funded 401k is a better deal in the long run for the employees.

    Pensions that are discharged in bankruptcy can be given “a haircut” when it is absorbed by the Federal Government. This hurts everyone.

    People are living too long for pensions to be a reasonable retirement plan. Please protect yourself against the day when your pension is cut.

    • Agreed completely. I’m a younger generation of worker who is also firmly in the camp that would take a generously matched 401K over a company pension any day. It’s mine, it’s portable, and I have control over the investment choices being made. Besides, if it goes un/underfunded, it’s at my own doing, not some corporate yahoos who’d rather be buying back stock and handing out exec. bonuses.

    • 751 pension was sound and there was way more money in there until they made it so it is combined with management pension. they had to do that to cover management pension. Mcnerny gets $260,000.00 a MONTH from Boeing if he retired today. Now that our retirements have been combined he will dip into our funds. That is how pensions are being devaluated. Combining huge management pensions with small employee pensions and management pensions eat it up.

  7. Uhh Rob D- please knock off the misinformation on 401k v defined benefit pensions in the private sector. The only haircut IF company goes belly up, and there are insufficient assets MAY be for two basic cases. 1) Pensions OVER about 50K/year will be reduced to the max for that year under PBGC 2) Pension amounts based on an 100 percent benefit at age less than 65 when first retired can be cut back by the amount involved for age less than 65. NRA guaranteed by PBGC is 65, amounts below that are considered to be subsidies.

    In the case of Boeing- that scenario is unlikely.

    Go to the Boeing site

    http://www.boeing.com/boeing/companyoffices/empinfo/index.page

    then benefits and compensation

    http://www.boeing.com/boeing/companyoffices/empinfo/benefits/index.page

    Then union represented employees

    http://www.boeing.com/boeing/companyoffices/empinfo/benefits/union.page?

    Then annual funding notice
    http://active.boeing.com/companyoffices/empinfo/benefits/index.cfm?content=sumannreports.cfm&pageid=m47966

    note links on page

    Annual Funding Notice: Plan Years Ending in 2012
    Annual Funding Notice: Plan Years Ending in 2011
    Annual Funding Notice: Plan Years Ending in 2010
    Annual Funding Notice: Plan Years Ending in 2009
    Annual Funding Notice: Plan Years Ending in 2008
    Summary Annual Reports: Plan Years Ending in 2012
    Summary Annual Reports: Plan Years Ending in 2011
    Summary Annual Reports: Plan Years Ending in 2010
    Summary Annual Reports: Plan Years Ending in 2009
    Summary Annual Reports: Plan Years Ending in 2008
    Summary Annual Reports: Plan Years Ending in 2007
    Summary Annual Reports: Plan Years Ending in 2006
    Summary Annual Reports: Plan Years Ending in 2005 and Short Plan Years Ending in 2006

    click on for example plan years ending in 2012

    http://active.boeing.com/companyoffices/empinfo/benefits/news/pension_fund_2012.pdf

    then to page 2

    The Boeing Company Employee Retirement Plan
    Introduction
    This notice includes important funding information about The Boeing Company Employee Retirement Plan (“the Plan”),
    EIN 91-0425694, Plan No. 001 for the plan year beginning January 1, 2012 and ending December 31, 2012 (“Plan
    Year”). As required by law, this notice also includes general information regarding pension plan terminations and
    benefits guaranteed by the Pension Benefit Guaranty Corporation which is found elsewhere in this booklet. …

    read the numbers

    Note carryover balance is/has been over 2 billion for the last three years shown

    That balance by the way can be penciled into operating earnings

    Also note explanations re PBGC

    with a bit of effort find the SPD for IAM 751 ( same one for speea)

    http://www.boeing.com/assets/pdf/companyoffices/empinfo/benefits/pension/spd/spd_58.pdf

    read about ERISA requirements re plan documents, guarantees, etc

    starting about page 28.

    ++++

    If thats not enough

    http://www.dol.gov/ebsa/publications/401k_employee.html

    and then read the still ongoing case re Boeing and Fees

    http://tinyurl.com/SPANO401KBA

    Thank you !!

    • well of course- he will be gone by 2016 in retirement along with his buddies.

      BTW- most do NOT realize that since about 2008, the IRS990 forms now show the base pay and contributions to pension plans and insurance for the top five.

      But in the LM2- only the gross pay is shown.
      Seems that in 2008- the LM2 was to be changed to show a person by person listing of benefits instead of a lump sum. Had been put out for comment- and passed and was ready to be implemented in 2009. But one of the first executive orders written turned it back for comment- for some strange reason, about 100 comments were made in the federal register by various unions against such a revalation- and only a few grunts/members/ or one or two orgs were in favor… So it never happened

      But the IRS form WAS changed…
      The irs rules are clear- the IRS 990 form is public- and no membership or name or org is needed to get a copy. And three years worth is to be available during normal work hours at any office . . . or can be had by writing main office.
      …Special Rules Relating
      to Copies
      Time and place for providing
      copies in response to requests made
      in person. A tax-exempt organization
      must:
      Provide copies of required documents
      under section 6104(d) in response to a
      request made in person at its principal,
      regional and district offices during regular
      business hours, and
      Provide copies to a requester on the
      day the request is made, except for
      unusual circumstances (see below)…

      page 76

      http://www.irs.gov/pub/irs-pdf/i990.pdf

  8. Why should any company be making promises that stetch 50-80 years into the future? If the union thinks it’s important to maintain a defined benefit pension perhaps they could offer to manage and guarantee it? Boeing could cut them a check each month. Demanding that Boeing maintain and manage a liability that stretches 50-80 years into the future doesn’t seem reasonable.

    The 401K style can be very good. Life cycle funds make long term investing pretty straight forward. The union could focus on investor education. A 35-year employee retiring today that had simply invested in an S&P 500 index fund would have done quite well (> 10% Compound Annual Growth Rate). This is how to tap into the gains that our economy creates and grow real wealth.

    http://www.moneychimp.com/features/market_cagr.htm

    • most companies would rather have control of those funds, and for a good reason. They make huge $$$ at it. I have been in a union where the union controlled the pension benefits. The powers that be came in and said it was over valued (way to much money in the fund) the union paid out 1 month to retired members and 1 week to working members. That is why companies want control of it

  9. Well Patrick, tell it to the Board. They approved Mr. McNerney’s pension of around $264,000 per month.

    And after years and years of Boeing hyping it’s pension, VIP-401K, and personal savings as the “three legs of retirement security”, I’m not going to willingly allow them to kick a leg out.

    Why should Boeing have to concern itself with pension payouts decades from now? Well, why should any employee concern themselves with Boeing’s status 50-80 years down the road? it’s like being afraid of the sun burning out.

    You see, Boeing’s pension system is their creation. It has been sold to us for decades as an incentive. It contains no colas, therefore the only wild card for them is life expectancy and how THEY choose to manage the fund.

    The costs for Boeing are relatively fixed, and manageable. They made the commitment, hyped it, sold it to us.

    James McNerney’s $264,000 per month pension is somehow seen as earned, and my prospective $1800 per month as somehow stolen.

    I don’t see it that way. All things being the same, Mr. McNerney’s compensation is no concern of mine. I am not on the executive compensation protest bandwagon. It BECOMES my business when he wants to take away MY modest pension program, during a time of record production rates, and record stock prices.

  10. Steve – times and priorities change. Regardless of what has been said in the past the choice now is how to deal with the present. Promises that last so long into the future should not be the domain of private companies. Would you offer a DC pension if starting a company? Perhaps governments can still afford this – but they have the power of taxation.

    Why not have the IAM focus on crafting a more incentive based compensation structure? So when times are good, employees really reap the rewards. And furthermore, employees are then highly incented to work towards creating a more successful company. I’m thinking of bonus structures that include individual and company components and could reach 2X base salary.

    401K’s have not worked for a lot of folks – but that’s mostly because of ill-informed decisions and/or a poor basket of investment choices. Both of these deficiencies can be addressed. Neither are worth pushing Boeing out of the Puget Sound.

    You can do better than that $1800 per month. For example, a 30 year old employee who makes $60,000, observes average annual wage growth of 3%, invests just 4% of his salary for 35 years, and realizes a 10.5% return (which is very reasonable based on history, as I demonstrated in my earlier post) can expect to have a nest egg that exceeds $1,000,000. That’s for a paltry 4%! Invest it for another 7 years and it could double again. Pension payments can’t catch this freight train. You could then spend or give this nest egg to whomever you deem fit – because the real money is in the other 401K.

    I worry some folks are not clearly seeing the potential benefits of the proposal. The consequences are far from trivial.

    • HELLO we had that the only extra was 75% instead of 50%. and what 3% per year???? try 3% over the span of the contract until 9/8/2023.

  11. You know Patrick, when negotiations happen, anything is possible if the parties are serious about them. But there’s the rub. When the IAM 751 negotiators lay an offer on the table that represents an initial bargaining position, Boeing immediately responds not with a counter-offer, but a last, best, and final offer. And even IF 751 rejects it, Boeing simply appeals to the IAM international who holds a vote on the zombie contract offer.

    So we can debate the merits of various proposals and Ideas till we are blue in the face, and none of it matters anymore. One would hope someone sane would step in and mediate the situation, but it seems all those available to do such bloody work are themselves insane. This is just one side trying to mug the other, and the strong arm robber now has to deal with a victim who has pulled a large, long, and sharp hatpin. There is no logic or reason to any of this anymore. It’s just nerves and emotions rubbed raw, and nothing good will come of it. Pass or fail.

  12. In that issue, 751 expressly states it was Buffenbarger who contacted Boeing to get them to drop the union endorsement stipulation. When this was done, he could force the vote. NO negotiation took place. Buffenbarger arguably failed to represent the rank and file. No negotiations took place as there was no discussion on the actual contract provisions. “Failure to Represent” in a violation of the NLRA. Buffenbarger unlawfully colluded with Boeing in order to make the Jan 3rd vote happen. For Boeing’s part, they violated their own rules on ethical business conduct by assisting Buffenbarger in a violation of the NLRA, and failing to engage in good faith bargaining themselves.

    col·lu·sion
    noun kə-ˈlü-zhən

    : secret cooperation for an illegal or dishonest purpose

  13. Meanwhile, Ralph Nader has written a letter to McNerney.

    Dear Mr. McNerney:

    The squeeze that you and Boeing are putting on your machinist workers’ pensions, pay scales and your stance on other labor issues regarding the assembling of the new 777X airliners is unseemly for several reasons.

    First, consider your pay this year of $21.1 million, a 15 percent increase from the previous year, and much higher than your predecessors. That sum does not demonstrate a moral authority to require sacrifices from your workers at a time of rising Boeing sales and profits, dividend increases, cash hoard, and another notorious $10 billion stock buyback. I say notorious because stock buybacks per se do little for shareholder values and a lot for the enlarged stock options of top executives.

    Second, you’re holding an auction for your long-time workers jobs in other states, inciting a bidding war whereby states are giving away taxpayer assets to lure your 777X assembly factory with huge tax holidays and other subsidies. Washington state outdid itself with a new law, signed by Governor Jay Inslee with the largest state business tax break package for Boeing in history. The tax escape law “will give Boeing and its suppliers about $8.7 billion in tax breaks between now and 2040,” according to the Citizens for Tax Justice (CTJ) calculations. CTJ adds that “Boeing has managed to avoid paying even a dime of state income taxes nationwide on $35 billion in pretax U.S. profits.” Boeing also received tax advantages from the federal government, including $1.8 billion in federal income tax rebates on its $35 billion in U.S. profits between 2003 and 2012.

    http://www.counterpunch.org/2013/12/27/letter-to-boeings-boss/

  14. All said and done, if Boeing moves the 777X to another location, which I believe would be a foolish move and goes through another 787 delay EIS fiasco, it will give many orders to Airbus and Boeing has done that already several times.
    Now for the union and the workers who are insisting on their terms for a contract, what will the thousands do for work if Boeing moves the 777X to another state?
    Some years ago in Connecticut, workers at Pratt & Whitney walked out several times for more wages and benefits which at the time they were the highest in the state. Later Pratt & Whitney moved some of the work to Maine and Florida where $10.00 per hour was big money and many Connecticut jobs were lost forever.
    As far as pointing to Boeing Execs getting big pensions, that has always been and will never change and using that as an arguing point is a waste of time. AA CEO Tom Horton will leave with 17 million, GE, GM, Ford, and the list goes on.
    To the Boeing workers, is it worth gambling on the future of your job for insisting on pensions? The 777X has already garnered almost 300 orders with more to come as Airbus does not have a comparable plane in the 777-9X class. Look down the road 2 years, 5 years, and so on. What will you do if the 777X is moved out of state? How will your family fare if you lose your job?
    A bird in the hand is worth two in the bush. Demand a vote and let the rank & file determine their future, not the union.

  15. Buffenbarger is nothing but a [edited]. HE WILL BE VOTED OUT!!!!!!!!!!!!!!!!!

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