* Move ends talks, puts offer to vote as Boeing faces 787
* Ballot may include strike plan with walkout by
* Boeing agrees to extend some terms of expired contract for
* Healthcare plan remains same with no rise in employee
By Alwyn Scott
SEATTLE, Jan 17 The union representing 23,000
Boeing Co engineers and technical workers urged members
to reject the company's latest contract offer on Thursday, a
move that ended negotiations and positioned the union a step
closer to calling a strike even though the two sides earlier
appeared close to a deal.
Boeing on Thursday said its "best and final" proposal would
mostly extend the existing contract for four years, something
the union had proposed on Wednesday. However, Boeing's offer
would eliminate a defined-benefit pension plan for new hires,
replacing it with a 401(k) plan.
"Agreeing to this contract as soon as possible will allow
all of us to focus our time and energy on the immediate
challenges facing the company," Boeing said in a statement.
Those challenges come in the form of a global grounding of
the company's new 787 Dreamliner, which is being investigated by
regulators and safety officials around the world after an
escalating series of malfunctions.
A team of experts from U.S. aviation authorities and Boeing
arrived in Takamatsu in western Japan on Friday to inspect a 787
jet that was forced to make an emergency landing on Wednesday
because of a battery problem, the second in two weeks.
The Dreamliner setback for Boeing has strengthened the
negotiating position for engineers, who are considered by
aviation experts to be crucial to the global safety review.
Bill Dugovich, a spokesman for the Society of Professional
Engineering Employees in Aerospace (SPEEA), said union leaders
would meet next week to formally approve a vote on Boeing's
offer and decide whether to include a strike authorization on
Union members then have 10 days to vote. If they reject the
contract and authorize a strike, a walkout could not occur until
seven days later following a "cooling off" period, or around
mid-February at the earliest, he said.
Dugovich said the value of the 401(k) match that Boeing
proposed for new hires was about 40 percent less than what
members currently receive in their pensions.
Boeing said the offer gives current employees everything the
"Our offer for new hires would lead the market among peer
companies," Boeing spokesman Doug Alder said.
Boeing's offer would cap the company's pension liabilities,
which run into the billions under standard accounting rules,
said Scott Hamilton, an analyst with Leeham Co, an aerospace
consulting firm in Seattle.
"Assuming the Boeing best-and-final is what its press
release says it is, we believe this to be a reasonable
compromise with both sides getting wins," Hamilton wrote in a
Boeing's proposal extends the 5 percent annual raises
included in the current contract for four more years. Healthcare
plans would remain in place with no increase in employee
contributions and the pension's basic benefit would be
increased, Boeing added.
Professional engineers would receive, on average, $84,071
more in pay and performance-based incentives under the
agreement, Boeing said, while technical workers would receive
about $64,515 more, on average.
In response, the union said that although Boeing's offer
contained improvements, "both the professional and technical
negotiation teams unanimously recommend rejection."
"While the company agreed to extend parts of the existing
contracts, the offers put retirement benefits for all 23,000
engineers and technical workers, including retiree medical, at
SPEEA's own "best and final" contract offer to Boeing on
Wednesday proposed extending the current contract for four years
without altering the pension. The union said that would avert a
strike and allow the company to focus on addressing safety
concerns with the Dreamliner.
The negotiations with SPEEA began in 2012 and the previous
contract expired in October. A 60-day extension ran out in
November. Federal mediators joined the talks in December when
the two sides appeared to be at an impasse.