With the grounding of the 787 Dreamliner still in the headlines, Boeing on Thursday gave its white-collar employee union its "best and final" offer -- a proposal that union negotiators immediately rejected.
Boeing said the contract offer to the 23,000 Puget Sound workers represented by the Society for Professional Engineering Employees in Aerospace provides for 5 percent average annual salary increases, no new increases in employee health care contributions and higher pension benefits for current employees.
The proposal would put new SPEEA employees into a 401(k)-style retirement plan rather than the current pension system.
SPEEA's negotiating team unanimously recommended against the offer, said Ray Goforth, the union's executive director. Ballots could go out next week, he said, and members would then have two weeks to vote on Boeing's proposal and on authorizing a strike.
Goforth said the union opposed Boeing's final offer largely because it would eliminate the traditional pension plan for new employees and would increase pensions for current employees at a lower rate than the previous contract.
"We just think it's profoundly disappointing The Boeing Co. is choosing to provoke a crisis with its engineering and technical work force at the same time it has a crisis with its premiere product," Goforth said.
Boeing said that under its proposal, wage pools for SPEEA members would rise 5 percent annually. Over four years, the average engineer would see $84,071 in additional salary and incentive pay, while the average technical employee would get $64,515.
Newly hired engineers earn less than $70,000 a year, while veteran engineers can earn more than $200,000. The average Boeing engineer's salary is $110,000.
"Agreeing to this contract as soon as possible will allow all of us to focus our time and energy on the immediate challenges facing the company," said Mike Delaney, vice president of engineering, Boeing Commercial Airplanes, in a press release.
Goforth said that under Boeing's proposal, engineers would only be guaranteed a 2 percent salary increase annually and technical professionals a 2.5 percent increase annually. They'd be eligible for additional raises based on merit, he said.
Nonetheless, the annual 5 percent average represents an increase from what Boeing proposed last Friday: a combination of 5 and 4 percent increases for engineers during a four-year contract, and 4 percent increases plus two 1 percent lump-sum bonuses for the other professionals.
SPEEA and Boeing management have been negotiating since April. The existing contracts for the 15,550 engineers and 7,400 technical workers represented by the union expired Nov. 25, and talks grew more strained late last year.
In October, SPEEA members overwhelmingly rejected Boeing's initial offer, and the two sides have been at loggerheads over raises and changes to pension and medical benefits.
Including salary and medical plan changes, Boeing's initial offer raised compensation 3 percent annually for engineers and 2 percent annually for technical professionals, raised the basic monthly pension benefit from $83 per year of service to $91 per year of service, and moved new hires starting in 2013 to a 401(k) plan. That proposal also asked employees to contribute more toward the costs of medical plans.
Its latest proposal, said Boeing, keeps the health plans in place "with no increase in employee contributions."
The pension basic benefit for current SPEEA-represented employees would be increased. Boeing spokesman Doug Alder said the proposal also provides survivor pension benefits to married gay employees, a condition the union had in exchange for extending the previous contract.
He dismissed the notion that the 787's grounding prompted the company to change its position on wage increases and medical benefits.
"Our main goal all along has been to reach an agreement as soon as possible," he said. "We made it clear that today's offer was our best and final (offer), so the ball really is in their court at this point."