By Alwyn Scott
SEATTLE, Feb 26 (Reuters) - Boeing's engineering union has
decided to drop its demand that its labor contract include a
pension for new workers, a move that could hasten a deal as the
two sides resume bargaining on Wednesday.
The decision comes after one bargaining unit last week
narrowly accepted Boeing's contract offer without the
pension for new hires. The other unit narrowly rejected the
contract, sending them back to the bargaining table.
"The pension is dead," said Tom McCarty, president of the
executive board of the Society of Professional Engineering
Employees in Aerospace (SPEEA), in an interview with Reuters.
"We're not going to try to breathe new life into it."
The pension became the key flash point in talks between
SPEEA and Boeing that began in April. Boeing is now reeling from
the grounding of its 787 Dreamliner nearly six weeks ago, a rare
event that has halted delivery of the new plane to customers and
is costing Boeing an estimated $200 million a month in lost
income and potential compensation to airlines.
SPEEA's technicians and Boeing will resume bargaining
Wednesday to replace a four-year agreement for 23,000 workers
that expired in October. An extension ran out in November,
leaving the union free to strike, if members authorize it.
In February, as the crisis with the 787 deepened, SPEEA
offered to extend the current contract, which includes 5 percent
annual raises, for four more years. Boeing agreed, but insisted
on its proposal to eliminate the pension for employees hired or
re-hired starting March 1.
SPEEA members already have a 401(k) plan that pays a match
up to 6 percent of their annual salary. Boeing's offer would
enhance that plan, while cutting out the pension.
The union said this change would reduce the value of a
worker's compensation by about 40 percent over the span of a
career.
"It's a lot less than the existing pension and 401(k),"
union executive director Ray Goforth said in an interview.
Boeing says controlling pension costs is crucial to future
investments in new jet designs and products.
"The retirement portion of the offer is incredibly important
for the company and that has not changed," as a result of the
vote, said Boeing spokesman Doug Alder.
Current employees would keep their pension, and it would
grow by 10 percent over the four-year life of the contract, he
said.
"We just need to get a grip on future hires so we can get a
grip on future investment," Alder added.
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