The International Federation of Machinists and Aerospace Workers said overnight negotiations resulted in Boeing’s new offer and workers would vote on Wednesday on whether to accept it.
Under the new contract offering, employees can elect to receive a lump sum payment of $8,000 – net of tax withholding – at ratification or have the full amount paid into a 401(k) plan. The company is dropping its revised 401(k) compliance proposal.
Boeing said in a statement on Saturday: “This new offering builds on our previous strong, highly competitive offering and directly addresses the issues raised by our employees. We hope they will vote yes on Wednesday.”
The tentative deal doesn’t necessarily mean the threat of a strike is over. A number of companies have struck deals with union leaders, only to see ordinary workers reject the proposed contract and force a strike. Such was the case at John Deere, where 10,000 members of the United Auto Workers union went on strike in October after rejecting a tentative deal. They remained on strike for five weeks, rejecting another tentative agreement in the process, before voting on a third agreement and returning to work.
Union members at Boeing’s three defense plants overwhelmingly rejected the company’s previous offer a week ago.
Workers at the three plants in Missouri and Illinois build the F-15, F-18, T-7A trainers and the MQ-25 unmanned tanker. Boeing said on July 24 it would activate a contingency plan in the event of a strike. But CEO Dave Calhoun told investors during a conference call this week that a strike would delay shipments to military customers.
The standoff began after the union criticized Boeing’s 401(k) payments in the contract and workers rejected the offer.
“Boeing previously took a pension away from our members and now the company is unwilling to adequately compensate our members’ 401(k) plan,” the union said on July 24.
Boeing’s earlier 401(k) offer on Sunday included a company adjustment to employee contributions of up to 10% of employee salaries, plus an automatic contribution of 2% for 2023 and 2024. Boeing had also offered a $3,000 ratification bonus.
Boeing currently provides a 4% corporate contribution and a 75% subsidy on the first 8% of an employee contribution.
Boeing has posted deep losses for each of the past three years, with net losses in excess of $18 billion since the beginning of 2019. However, those losses were primarily related to the airliner business, which was impacted by the 20-month grounding of the 737 Max in It began in March 2019 after two fatal accidents and a sharp drop in demand for air travel caused by the pandemic. The company’s defense, space and security divisions have generated profits of US$1.5 billion in each of the last two years. But Boeing reported a $929 million loss at its defense business in the first quarter of this year after a series of special charges, including a $660 million charge related to the refurbishment of two 747 jets that will serve as the new Air Force Ones are to be used. Boeing made a narrow profit of $71 million in the second quarter.
— Chris Isidore of CNN Business contributed to this report