NEW YORK (Reuters) — Boeing and its engineering union said on Wednesday they struck a tentative deal to extend labor contracts for more than 20,000 workers by six years.
If ratified, the agreement would end contract negotiations months ahead of an Oct. 6 deadline and ensure a key part of Boeing's workforce cannot strike as the world's biggest plane maker brings its new 777X jetliner into service by 2020.
The agreement marks a win for Boeing and new Chief Executive Dennis Muilenburg after the company soured relations with machinists in 2014 by offering a contract that phased out pensions. It comes as Boeing is under pressure for moving thousands of jobs out of Washington state after securing $8.7 billion in industry tax incentives.
"This tentative agreement recognizes the significant contributions of our engineering and technical workforce and reinforces Boeing's commitment to the Puget Sound region," said Boeing Commercial Airplanes CEO Ray Conner in a statement.
The union said its executive board unanimously endorsed the deal and its two bargaining unit councils, which have dozens of members each, overwhelmingly recommended it.
That suggests members would likely ratify the contracts by a wide margin, said Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace (SPEEA).
The vote by engineers and technical workers is set for Jan. 27 to Feb. 10. The contract would take effect Feb. 11.
Engineers' salaries would be pegged to 115 per cent of an industry index for high-tech workers, and technical workers' salaries to between 122 per cent and 117 per cent of the index.
Both sides wanted a strong compensation package, Boeing spokesman Doug Alder said. "We're trying to attract the best workforce, and this contract allows us to do that while still remaining competitive."
The agreement would make it more costly for Boeing to move work outside the bargaining unit. Workers whose layoffs are not caused by cyclical downturns or unexpected shocks would receive 120 days notice, up to 60 weeks of pay and six months of subsidized dental and medical coverage. Boeing also agreed to make "extraordinary efforts" to place those workers in other SPEEA-represented jobs.
"The costs are high enough that there's a genuine impact to Boeing for moving work," Goforth said.
SPEEA is pursing unfair labor practice charges and backs state bills to tie the $8.7 billion in incentives to job and wage targets. Those issues were set aside in negotiations, Goforth said.
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