In a surprise announcement on Wednesday, Boeing and the leadership of its white-collar union said they have tentatively agreed on a new six-year contract extension well ahead of the current contract’s October expiration.
The deal was agreed in secret discussions between Boeing management and the executive board of the Society of Professional Engineering Employees in Aerospace (SPEEA).
The union’s nearly 21,000 members will vote by early February on the contract, which locks in an average 5 percent annual pay increase for five years, freezes growth in members’ traditional pensions in 2019, and adds new provisions for SPEEA members whose jobs are moved elsewhere.
“These negotiations were possible because SPEEA and Boeing decided not to let our areas of disagreement prevent us from making progress on items where we do agree,” said Ray Goforth, SPEEA executive director in a statement. “These contract extensions are the result of a lot of hard work and good will. Hopefully, this gives us a template for the future.”
Boeing vice chairman and Commercial Airplanes chief Ray Conner welcomed the deal.
“This tentative agreement recognizes the significant contributions of our engineering and technical workforce and reinforces Boeing’s commitment to the Puget Sound region,” said Conner in a statement.
“As our competitive environment gets tougher, ratification will enable Boeing to be more competitive in today’s and tomorrow’s commercial and defense markets, while helping ensure stability for Boeing’s future as our employees strive to deliver superior products and services to our customers,” he said.
The terms of the deal provide average 5 percent annual salary increases from 2017 through 2022, and a 4.5 percent increase in the final year.
The deal will freeze the traditional pension of all SPEEA members from 2019. Members hired after March 2013 already lost that pension in a previous contract concession.
In compensation, Boeing will bump up the company’s matching 401(k) contribution by 9 percent of gross salary in the first year of the freeze, 8 percent in the second year and 7 percent in the third.
SPEEA spokesman Bill Dugovich said the deal retains continued retirement benefit growth while offering market-leading wages.
The union said the proposed contract contains provisions to help members affected by Boeing moving work.
“Management is committing to use exhaustive efforts to place individuals impacted by such a move,” the SPEEA statement said. “In the unlikely event these placement efforts fail, individuals laid off due to the movement of work will receive a minimum of 26 to a maximum of 60 weeks of pay (two weeks per year of service) and six months of medical and dental coverage.”
Dugovich said the agreement arose out of routine discussions with the company and were kept secret because the union leadership didn’t know if the talks would lead anywhere.
The union’s members will vote on the agreement by mail, with counting set for Feb. 10.