Boeing Co. union workers on Nov. 4 voted to ratify a new union contract, with the majority voting to accept the company's latest contract proposal that includes general wage increases totaling 38% over four years and an employer 401(k) match of 100%, up from 75%, of the first 8% contributed.
The package also includes a special company retirement contribution of 4% into the 401(k) and a $105 pension multiplier per year for those vested in the pension plan.
The new proposal does not restore Boeing’s $16.3 billion defined benefit plan that has been frozen to benefit accruals since Oct. 31, 2016. The pension plan had been closed to new hires since Jan. 3, 2014.
The union in its announcement credited acting U.S. Secretary of Labor Julie Su, working on behalf of the Biden administration “to help restart and reach a positive resolution to negotiations that had previously stalled.”
“Working people know what it’s like when a company overreaches and takes away more than is fair,” said IAM District 751 President Jon Holden and IAM District W24 President Brandon Bryant in a joint statement issued on Nov. 4. “Through this strike and the resulting victory, frontline workers at Boeing have done their part to begin rebalancing the scales in favor of the middle class.”
Before the vote, Holden and Bryant called the now ratified proposal “a new standard for the industry on wages and other key protections, including key wins on job security, safety, healthcare costs, retirement, bonus pay and more.”
In a message to all employees after the union vote, Boeing CEO Kelly Ortberg said, "We were pleased to reach a ratified agreement with IAM 751 and W24 tonight."
"We will only move forward by listening and working together," Ortberg said. "There is much work ahead to return to the excellence that made Boeing an iconic company."
The machinists are not the only union in recent months to ask employers to reinstate defined benefit plans, industry insiders noted.
While the new contract does not reinstate Boeing's defined benefit plan, more employee unions have been asking companies to bring back the plans over the last six months, said Jane Jacobs, a partner in the labor and employment practice of law firm Tarter Krinsky & Drogin. The firm represents management in labor disputes but is not involved in the Boeing labor matter.
In 2023, IBM reopened its defined benefit plan by scrapping its 401(k) corporate match and replacing it with a cash balance component called a retirement benefit account. However, Jacobs does not think many other companies would be interested in reinstating or launching a defined benefit plan because “the downside risks are huge.”
Instead, Boeing and other companies, such as Ford and General Motors, have agreed to beef up their 401(k) matching contributions rather than reinstate their pension plans.
