ST. LOUIS (Reuters) — Boeing Co's machinists' union in St. Louis approved a seven and a half year contract extension that will keep the company's unionized employees away from a defined benefit retirement plan.
The company's contract with the more than 2,300 unionized workers, represented by the International Association of Machinists and Aerospace Workers, now expires in July 2022.
The workers will shift from a defined pension to a 401(k)-style retirement benefit system on January 1, 2016, Boeing said in a statement on Sunday.
The agreement will provide wage increases in 2016, 2018, 2020 and 2022 along with lump-sum payments in 2017, 2019, and 2021. Workers will also receive an $8,000 signing bonus.
Boeing said it expects the changes in the retirement plan to result in non-cash pension curtailment charges of about $80 million to first-quarter GAAP earnings.
Boeing builds the F/A-18E/F and F-15 fighter jets, the EA-18G electronic attack aircraft, along with weapons and support programs at its St. Louis site.
"In coming months, Boeing will bid for work that could extend some of those or bring in new projects. The contract extension improves its competitive position for those bids," Boeing said.