SEATTLE — Boeing will pay its machinists an annual bonus of 3.1 percent of their total 2014 gross wages in their Feb. 19 paycheck, the company said Friday.
The average payout to individuals will be $2,294 for a total of $77.9 million in additional pay for the nearly 34,000 eligible machinists, the company said.
Despite Boeing’s recent announcement of record profits in 2014, the payout falls short of the maximum 4 percent bonus the machinists received last year.
Boeing said worker safety performance brought down the bonus rate.
The bonus announcement came after the local leadership of the International Association of Machinists tried at the last minute to raise the payout for its members.
However, Boeing spokesman Doug Alder insisted that “there were no negotiations” over the bonus.
Last week, Boeing executives disappointed their nonmanagement, salaried employees — including engineers — when they announced bonuses substantially lower than a year earlier.
The machinist union has a separate incentive plan, based not on financial performance but on preset targets to improve productivity, quality and safety.
On Wednesday, IAM District 751 president Jon Holden in a message to his members said the union was talking with management “to identify ways to raise the (bonus) payout.” He wrote that “the last estimate we had from the Boeing Co., in November,” was that the bonus for 2014 would be just 2.8 percent.
“We feel that it’s essential that the (bonus) payout adequately reward our members for the outstanding work they did in 2014,” Holden’s message added.
Boeing said the targets that determine the size of the bonus are set early in the year and are agreed to by the union and management.
“There is discussion to set the parameters, but at the end, the numbers are what the numbers are,” said Alder. “There have been no negotiations over the number.”
He said Boeing each month does provide the union with a projection of the expected bonus rate and he confirmed that the company estimate in November was 2.8 percent.
“Obviously we had a good December,” said Alder.
In a message to employees Friday afternoon, Boeing said the machinists achieved the maximum payout for quality improvement and a near-maximum payout for productivity improvement, but that the safety performance was “significantly under target.”
The gross wage, averaging $74,000, includes overtime pay but excludes the signing bonus IAM members received in January 2014 for ratifying the contract extension that secured the 777X for the Everett factory, located outside Seattle.
Record profit
Last year, the machinists incentive plan paid out a full 4 percent bonus. In 2013, the first full year of the incentive plan, it paid out a 3.1 percent bonus.
Soon after Boeing reported to Wall Street a record $5.4 billion net profit last week, management announced the bonus for engineers and nonunion salaried staff and drew a rush of internal disapproval.
Based on pre-set economic profit targets, that plan will pay out between 12.25 and 12.75 days’ extra pay this year, compared to 16 to 17 days’ extra pay last year.
Commercial Airplanes boss Ray Conner, in an internal message to employees, said “many team members have reached out to me expressing disappointment.”
Conner said the company’s 2014 performance, though surpassing the preset targets, did not “far exceed” the targets as it did in 2013.
Combining the two incentive plans for the salaried employees and machinists, Boeing will pay a total of $269.3 million in additional pay to employees in Washington state and Portland.
This total does not include managers who this year for the first time have a separate incentive plan.
