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Boeing engineers approve six-year pact, averting labor showdown

Thursday, February 18, 2016 - 14:26

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Boeing Co won't face labor strife later this year after engineers and technical workers approved a six-year contract extension that brings a salary boost and more job security.

[CHICAGO] Boeing Co won't face labor strife later this year after engineers and technical workers approved a six-year contract extension that brings a salary boost and more job security.

The contract takes effect immediately and extends to October 2022, the company said in a statement on its website. A tentative agreement was hammered out last month during formal talks between Boeing and the Society of Professional Engineering Employees in Aerospace, well in advance of Oct 6, when the contract covering the union's 20,100 members expires.

It is the latest of several long-term pacts struck by Boeing and its collective bargaining units as the planemaker breaks from short-term contracts that had left the company at risk of frequent unrest and strikes.

The effort to avert a showdown gained momentum after new Boeing chief executive officer Dennis Muilenburg met last October with Ray Goforth, the union's executive director.

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"This agreement recognizes and rewards the contributions of engineers and technical workers who are vital to our continued leadership in aerospace, and it will help ensure Boeing's competitiveness in our second century of business," Mr Muilenburg said in the statement.

Relations between Boeing and the employees have been strained since the last contract agreement in 2012 as the company shifted engineering work to other states along with 6,000 jobs from its traditional Seattle-area base.

Ray Conner, who heads Boeing's commercial unit, warned employees in a Feb 10 webcast that more job losses may lie ahead as the planemaker works to cut costs in a brutally competitive environment.

While many of the affected workers found comparable work at Boeing, "job security has been an ongoing issue with our Puget Sound workforce," Todd Zarfos, an engineering leader for Boeing's commercial airplanes division and one of its chief negotiators, said in a Jan 13 interview.

The new deal attempts to relieve some of that anxiety. The company committed to help affected engineers find new assignments, while guaranteeing between 26 and 60 weeks of severance pay plus six months of medical coverage to those who lose their jobs.

Union members would also receive average 5 per cent pay raises through 2021 and a 4.5 per cent gain in the contract's final year, Mr Zarfos said.

The contract would also swap traditional defined-benefit pensions for members hired before March 2013, replacing them with a new company retirement contribution and enhanced 401(k) transition contributions at the start of 2019.

New hires represented by the union already participate in the program.

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