Boeing, Engineers Contract Talks Make Progress

Plane maker's contract talks with its engineers' union will move into high gear his week, and may get a boost from a tentative settlement with the Machinists union.

SEATTLE (AP) -- Boeing Co.'s contract talks with a second union -- its engineers -- will move into high gear later this week, and may get a boost from a tentative settlement to end a 52-day Machinists union strike that has closed Boeing's commercial jet factories, lowered its profits and delayed airplane deliveries.

Boeing hopes to avoid a second strike, this one by its white-collar union, which represents 21,000 scientists, engineers, manual writers, technicians and other hourly workers.

The Society of Professional Engineering Employees in Aerospace includes workers without whom Boeing could not deliver airplanes because they certify the planes' airworthiness. The union surprised the business and labor world in 2000 with a 40-day walkout.

SPEEA's two current contracts expire Dec. 1. One covers about 14,200 scientists, engineers and other professionals with average salaries of $82,666 and the other covers nearly 6,700 manual writers, technicians and other hourly workers paid an average of $68,157. About 550 are in Utah, California and Oregon and the rest are in the Seattle area.

Committees from Boeing and SPEEA have been meeting since March to discuss specific issues, and an agreement has been reached on about half of the contract, "the less controversial pieces," said Doug Kight, vice president for human resources at Boeing Commercial Airplanes and the company's chief negotiator in both sets of talks.

The full negotiating teams now move into a hotel to try to come to terms that can be submitted for union ratification in mid-November.

Late Monday, the fifth day of federally mediated talks in Washington, D.C., negotiators for Boeing and the International Association of Machinists and Aerospace Workers reached a tentative agreement to end a strike that began Sept. 6, both sides said. The union said the four-year agreement included wage increases totaling 15 percent and provisions to enhance job security.

SPEEA talks had been scheduled to begin Tuesday afternoon but were postponed until Wednesday. Boeing requested the delay earlier Monday because two of its negotiators, who are also involved in talks with the Machinists, were back in the nation's capital, Boeing spokesman Tim Healy said.

SPEEA spokesman Bill Dugovich said the union agreed to the delay.

Last week, the Chicago-based company reported a 38 percent drop in third-quarter profit, resulting in net income of $695 million, or 96 cents per share. The results included a 60-cents-per-share erosion in earnings as the strike and a shortage of key parts lowered Boeing's airplane deliveries.

Key issues for SPEEA include the same ones for the Machinists union -- job security and outsourcing, pay, retirement benefits and health coverage -- plus jurisdictional issues.

Voting is by mail. If either unit rejects a contract and approves strike authorization, union leaders can call a walkout by that unit after the contracts expire Dec. 1.

"We have a work force that is frustrated, concerned, they feel ignored. They feel that their expertise has been marginalized," said Ray Goforth, the engineering union's executive director.

Kight said health and pension issues "will be challenging, for sure," as well as "our use of non-Boeing labor."

In the past, he said, Machinists union strike settlement terms on retirement and medical care were largely transferred over to the SPEEA contracts.

Healy said it was unclear how the settlement would affect bargaining with SPEEA on outsourcing and other critical non-economic questions. When the talks turn to pay, retirement and medical care, "then I think they help to give some clarity to those issues," he said.

Battles over SPEEA representation for 64 employees in Utah and as many as 200 in California "are going to play an inordinate role in these negotiations," Goforth said, saying that Boeing is trying to weaken the union by claiming that, especially in California, workers in civilian and military operations should be covered by different contracts.

"It could be a strike issue," he said.

The white-collar union struck for 40 days in 2000 in a walkout that saw the union win gains in pay, retirement benefits and medical care over the company's last pre-strike offer.

A strike by SPEEA would make six by the two unions against Boeing in two decades, following walkouts by the Machinists of 48 days in 1989, 69 days in 1995, 28 days in 2005 and the current walkout.

In a related development, members of another IAM unit voted Sunday to ratify a 3½-year contract covering more than 500 Boeing Integrated Defense System workers who handle parts production and distribution, aircraft testing and research and development in Huntington Beach, Torrance and Edwards Air Force Base, all in Southern California.

The pact, which runs through April 28, 2012, includes a $2,500 signing bonus and pay increases totaling 6 percent, maintains a cost-of-living adjustment formula and boosts monthly retirement benefits to $75 per year of service.

In addition to pay raises, the tentative agreement for commercial airplane production workers who were paid about the same rates as the Southern California employees before the strike also includes bonuses totaling at least $8,000 in the first three years, similar COLA provisions and a boost in retirement benefits to $83 per year of service.

More in Supply Chain