February 18, 2016 / 6:04 AM / 2 years ago

Boeing engineers overwhelmingly back new labor contracts

Boeing employees march up and down stairs entering and exiting Boeing 737 MAX during a media tour of the Boeing 737 MAX at the Boeing plant in Renton, Washington December 7, 2015.Matt Mills McKnight

(Reuters) - Boeing Co's (BA.N) engineers' union ratified six-year labor contracts by a wide margin on Wednesday, a vote that ensures stability during a period when the planemaker is bringing out new versions of its two most profitable jetliners, the 737 and the 777.

More than 70 percent of voters backed the agreements for two bargaining units of the Society of Professional Engineering Employees in Aerospace (SPEEA) that cover 20,100 workers, the union said. The deals mark a sharp shift from contentious negotiations over the last contract in 2012.

The agreements take effect immediately, replacing a contract due to expire in October. They govern 14,100 professional engineers and 6,000 technical workers, mostly in the Puget Sound area, but including some in California, Oregon, Utah and Florida. The new contracts expire in October 2022.

Professional workers voted 6,085 to accept and 2,460 to reject, while technical workers voted 2,825 to accept and 1,030 to reject, the union said.

The new contracts improve wages, vacation, layoff and retirement benefits, the union said. Boeing agreed to pay 15 percent more than the national average of wages for professional engineers, as determined by a Mercer benchmark for high-tech workers. Technical workers will be paid 22 percent above the benchmark, with the percentage falling to 17 percent by 2022.

The agreements "grew from a strong desire on both sides to find common ground and negotiate contracts that work for SPEEA members and Boeing," said Ryan Rule, president of the union. "It was a unique opportunity that allowed these early contract talks," he added. "We're glad it worked."

In a statement, Boeing thanked the workers. Commercial Airplanes Chief Executive Ray Conner said the agreement "helps position us for continued success in a highly competitive landscape". Conner oversaw the contract talks, Boeing said.

The agreement is seen as signaling a change in tone from two years ago, when former Chief Executive Jim McNerney quipped on a conference call that workers would "still be cowering" after he turned 65 later that year, a remark for which he later apologized.

Asked about the new relationship with labor, current Chief Executive Dennis Muilenburg said in January that the company faces tough competition. "And at the same time, we want to recognize this great team and treat them with the respect they deserve."

Reporting by Alwyn Scott; Editing by Muralikumar Anantharaman

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