Boeing, Machinists open contract talks

Tom Buffenbarger, the powerful national president of the International Association of Machinists (IAM), is optimistic about his union's chances for agreement with Boeing in the contract negotiations that formally kicked off Friday.

Buffenbarger said he believes the company understands what the union wants, and that Boeing Commercial Airplanes chief executive Scott Carson is someone he can engage with.

"Boeing has certainly indicated to us, without tipping their hand, that they want a successful conclusion to the negotiations," said Buffenbarger. "Chances are good we're going to find our way to getting a contract our members will feel good about."

Speaking at his Seattle waterfront hotel before the opening ceremony for the contract talks, Buffenbarger said that in addition to negotiating wages and benefits, the union will press for contract language on job security and will reject a company proposal to give new hires a 401(k)-style retirement plan instead of a pension.

He insisted he's not out to exploit Boeing's vulnerability to a strike this year.

"I'm about getting good contracts for our members," Buffenbarger said. "I'm not about taking advantage."

Yet he knows as well as anyone that Boeing, whose profits are soaring, cannot afford to trigger a strike in September while it struggles to get the first 787 into the air by the next month. In 2005, the union struck for a month.

Boeing's top labor negotiator, Doug Kight, said Friday afternoon that Boeing will offer a pay package that raises entry-level wages but will seek to negotiate alternative forms of additional compensation for higher-paid employees in lieu of a wage hike.

Boeing will also suggest an incentive pay scheme to reward employees for productivity gains.

The company said IAM-represented employees currently earn an average base wage of nearly $27 per hour, or nearly $56,000 annually before overtime, plus benefits valued at more than $24,000 annually. Boeing estimated average total Machinist compensation — including overtime pay, lump-sum wage payments and benefits — at around $91,500 per year.

But Buffenbarger dismissed out of hand one of Boeing's top goals: a proposal to switch new hires from Boeing's traditional pension plan to a 401(k)-style retirement plan.

He said that idea, outlined recently by Kight, meddles with union members' "very sacred benefits."

He said the move would simply transfer risk from Boeing to employees.

"We are not interested on gambling our pension plans on Wall Street," he said.

Boeing also proposes ending early-retiree medical benefits for new hires, an idea the union rejected in 2005.

Kight said both sides Friday reiterated their commitment "to listening to each other in a spirit of openness" on such issues.

Buffenbarger said the union also will press Boeing to include some job security in the contract.

He wants the company to provide more extensive in-house training for Machinists, backed with contract language that provides "a reasonable expectation that a person can take this skill they've developed through to their retirement years."

In past negotiations, the company has balked at assurances of job security. This time, Kight pointed to a company proposal to "stabilize employment and mitigate layoffs," intended to even out the huge employment swings in the cyclical airplane-building business.

Kight said that could be "a win for Boeing and for employees."

Boeing's global outsourcing strategy will also come up in the talks.

Citing production problems with outsourcing on the 787, Buffenbarger said the union will push hard to have Boeing build its next plane right here. "This is where the best aircraft makers in the world come from," he said. "Why would you abandon that to take a gamble on an unproven site?"

Buffenbarger heads a union that represents some 435,000 working Machinists and more than 200,000 retirees. It has a strike fund of some $150 million.

In January, the IAM and Boeing rival Lockheed Martin concluded a contract that Buffenbarger called "the best [contract] we ever got in 75 years and one of the few times we did it without a strike."

Such an outcome here this summer might satisfy both sides.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com