Boeing Co. is asking the Machinists union to agree to big cuts in future pension and health care benefits in exchange for placing manufacturing work on the forthcoming 777X jet in Washington state, according to details of the offer leaked to The Seattle Times through union representatives.
To secure a “yes” vote by the union’s members, the package also includes substantial cash awards, including a large ratification bonus and a generous buyout plan for workers close to retirement.
The outline of what’s under consideration suggests a major poker play by the company to cut its long-term costs, using the future of airplane manufacturing in Washington state’s Puget Sound area as the high stakes on the table.
Media reports last week said the company is considering awarding the manufacturing work to the non-union plant in North Charleston. Boeing executives have told the union that without an agreement, it will place the work elsewhere, sources said.
While precise details may well change at the last minute, discussions have included a signing bonus as high as $10,000 for all members as well as a buyout that would allow retirement with boosted pension terms for those over age 58.
The take-aways include significantly higher health care premiums and, crucially, a radically changed pension plan.
The International Association of Machinists is the last Boeing union with a traditional pension, and the company has sought unsuccessfully in multiple contract negotiations to move new hires to a 401(k)-style retirement savings plan.
The offer would also change the wage structure so that new hires would take much longer to reach the top of the pay scale than they do today.
One machinist said the deal is enticing for younger workers and those close to retirement and “a losing deal” for everyone else.