Boeing Co. gained a decade of labor peace after its largest union voted to accept contract concessions — including moving to a defined contribution plan — in exchange for a promise to base production of the new 777X jet and three other models at the company's Seattle hub.
Machinists' union members late Jan. 3 voted 51% in favor of ratifying the new agreement, which is effective through 2024. The deal would freeze pensions starting in 2016, something Ray Conner, who heads Boeing's commercial airplane unit, had said was non-negotiable.
The new contract is an eight-year extension to 2024 and includes $15,000 per member in bonuses and retention of a seniority system letting workers reach the top of the pay scale within six years. In exchange, workers agreed to freeze pension contributions in 2016 and shift to a defined contribution plan.
“Boeing got what it wanted,” said Richard Aboulafia, an aerospace analyst with Teal Group, a Fairfax, Va., consulting firm. “This probably takes care of a host of problems for years to come.”
Union leaders, who had urged members to reject the concessions, vowed to make Boeing keep a pledge to retain in Washington the thousands of jobs that would accompany the 777X's final assembly line and a new facility to make the jet's composite wings, the largest ever made by the company.
Boeing offered the bonuses and the pay scale after the union rejected the company's initial contract proposal in November. Boeing also pledged to continue making the 737 Max, KC-46 military tanker and P-8 submarine hunter in the Pacific Northwest for a decade, Doug Alder, a spokesman, said by e-mail.