Leeham News and Analysis

Boeing message on IAM vote

From: Jim Albaugh
Subject line: A future of shared success
For distribution to all BCA employees
Dec. 7, 2011

IAM-represented employees said “yes” today to a four-year contract extension that opens a new era of job security, stability and shared purpose.

I’m thrilled with the outcome and grateful to union members for supporting this landmark agreement. I also want to thank IAM leaders for the hard work and constructive dialogue that produced this contract, which will bring great benefits to our employees, our customers, our communities and our company.

The contract ensures that the 737 MAX will be built in Renton, affirming Boeing’s role as an economic engine for the region. It provides production continuity as we work to meet customer demand for our airplanes. It demonstrates Boeing’s commitment to its highly skilled workforce and marks a new chapter of cooperation between the company and its largest union.

The tentative agreement announced last week drew overwhelming praise from community leaders, elected officials and business analysts. They called it “a tsunami-sized deal” and “a shot in the arm” for the state’s economy. Washington Gov. Chris Gregoire said it showed “a strong commitment by both sides to secure the future of aerospace in Washington state.”

All of that is true. But this contract represents something even bigger – affirmation that reasonable minds can prevail. It demonstrates that even now, in a nation too often polarized and mired in disagreement, people can come together in good faith and find a way forward.

As competition in our industry grows more fierce, the need for Boeing and its unions to stake out common ground has never been greater. This agreement points the way to a future of shared success. To IAM-represented employees, I say thank you for approving this contract and demonstrating your faith in the amazing things we can achieve together…JIM

IAM press release in Boeing vote

MACHINISTS VOTE FOR JOBS!

SEATTLE – Machinists Union members have approved a four-year contract extension with the Boeing Co. that ensures the 737 MAX will be built in Puget Sound.

The final vote was 74 percent to accept the extension, union officers said. More than 31,000 union members in Washington, Oregon, Kansas and California were eligible to vote.

“This agreement represents a historic moment in changing the relationship between this union and the Boeing Co.,” said Tom Wroblewski, the president of Machinists Union District Lodge 751 in Seattle. “For the first time, company executives are committing to you to keep work in Puget Sound.”

“This agreement shows the collective bargaining process is flexible enough to adjust with the times,” said Wroblewski. “The process allowed us to be creative and produce a win-win for everyone – our members, Boeing, airline customers, and the community. This is a vote of confidence for job security and a stronger future for this region.”

The agreement extends the current contract, which was set to expire in September 2012, another four years.

The biggest benefit to the contract was the commitment to job security, Wroblewski said.

“As a result of this vote, we have the strongest commitment to the future of aerospace jobs in Washington State that we’ve ever had,” he said.

The new contract also creates a new, top-level joint council of union and company leaders that will meet monthly to pursue opportunities and work together to solve problems.

“This committee has agreed to four mutual objectives, and first among them is this: creating and sustaining good-paying jobs with benefits,” Wroblewski said. “Thanks to your vote on this contract extension, that now is one of the Boeing Co.’s stated goals.”

Under the terms of the extended contract, Machinists will receive:

2-percent wage increases in each year of the contract, plus additional cost-of-living adjustments;

A new incentive plan that will pay out up to 4 percent each year;

Increases to the formula for calculating pensions, plus a continuation of the current 401(k) savings plan with a company match, plus a commitment to preserving pensions for new hires;

A $5,000 ratification bonus, which will be paid on Dec. 15.

In exchange, union members agreed to pay higher medical premiums starting in 2013.

Boeing and the Machinists Union have clashed in the past, Wroblewski acknowledged. But with the ratification of the contract extension, the two sides are now committed to working together.

“It’ll be a big shift; that we both need to embrace. But we must do this,” he said. “Because it’s obvious that we as union members cannot prosper if the Boeing Co. isn’t successful, and we’ve seen quite clearly that Boeing’s success is tied directly to the skills and experience of our Machinists Union members.”

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