Boeing gives ‘best and final offer’ to striking union workers

Boeing said Monday it made a “best and final offer” to striking union machinists that includes bigger raises and larger bonuses than a proposed contract that was overwhelmingly rejected.

The company said the offer includes pay raises of 30 per cent over four years, up from the rejected 25 per cent raises.

The new offer — and labeling it a final one — demonstrates Boeing’s eagerness to end the strike by about 33,000 machinists that began Sept. 13. The company introduced rolling furloughs of non-unionized employees last week to cut costs during the strike.

The strikers face their own financial pressure to return to work. They received their final paychecks last week and will lose company-provided health insurance at the end of the month, according to Boeing.

The company said its new offer is contingent on members of the International Association of Machinists and Aerospace Workers ratifying the contract by late Friday night, when the strike will be a little over two weeks old.

The union, which represents factory workers who assemble some of the company’s best-selling planes, said it was reviewing the offer.




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“Employees knew Boeing executives could do better, and this shows the workers were right all along,” Brian Bryant, the union’s international president, said in a statement. “The proposal will be analyzed to see if it’s up to the task of helping workers gain adequate ground on prior sacrifices,”

Boeing’s latest offer includes upfront pay raises of 12 per cent plus three annual raises of six per cent each.

It would double the size of ratification bonuses to $6,000. It also would keep annual bonuses based on productivity. In the rejected contract, Boeing sought to replace those payouts with new contributions to retirement accounts.

Boeing said average annual pay for machinists would rise from $75,608 now to $111,155 at the end of the four-year contract.

The new offer would not restore a traditional pension plan that Boeing eliminated about a decade ago. Striking workers cited pay and pensions as reasons why they voted 94.6 per cent against the company’s previous offer.

Boeing also renewed a promise to build its next new airline plane in the Seattle area — if that project starts in the next four years. That was a key provision for union leaders, who recommended adoption of the original contract offer, but one that seemed less persuasive to rank-and-file members.

The strike is likely already starting to reduce Boeing’s ability to generate cash. The company gets much of its cash when it delivers new planes, but the strike has shut down production of 737s, 777s and 767s. Work on 787s continues with nonunion workers in South Carolina.

On Friday, Boeing began requiring thousands of managers and nonunion employees to take one week off without pay every four weeks under the temporary rolling furloughs. It also has announced a hiring freeze, reduced business travel and decreased spending on suppliers.

The money-saving measures are expected to last as long as the strike continues.

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