Boeing Co. has reached agreements on new contracts with union locals representing almost 5,000 workers at plants in California and Oklahoma, including the company’s Long Beach aircraft factory.
Long Beach workers, who build commercial passenger jets and C-17 military cargo planes, ignored their leadership’s recommendation and voted Sunday to approve a new three-year pact that provides wage increases but also calls on them to pay more of their own medical insurance costs. The pact, which covers about 2,900 Boeing employees, was approved by a vote of 710 to 630.
Separately, negotiators for Boeing and the United Automobile, Aerospace and Agricultural Implement Workers of America have given preliminary approval to a new four-year contract covering 2,000 workers who make defense and commercial aircraft products in Paramount and Santa Susana and in plants in Oklahoma. The union had been working without a contract for the last year. Terms of the new agreement will not be disclosed until the union membership’s ratification vote.
The contract settlements come as Boeing faces stiff competition for commercial plane orders from Europe’s Airbus and for military work from rival Lockheed Martin Corp.
Boeing has laid off or fired about 39,000 workers in its civilian aircraft divisions because of a downturn in demand for passenger jets since the 2001 terrorist attacks hurt airline traffic.
It was against that background that UAW members at the Long Beach plant refused to follow their leadership’s recommendation to reject the new three-year contract.
“It doesn’t necessarily mean a weakening of the union,” said Ron Seeber, professor of labor relations at Cornell University in New York. “Health insurance is the issue in most contracts these days, and a lot of contracts have give-backs on this issue because employees want to keep their benefits and are willing to pay more to keep them, rather than seeing them reduced.”
The Long Beach agreement includes 3% annual raises in the first and third years of the contract, and pays workers a $2,000 lump sum in the second year. But it also boosts their annual medical insurance premiums by 10%.
“I hope our members understand that this is going to raise their out-of-pocket expenses for healthcare,” said Bill Schultz, president of Local 148 of the United Auto Workers, which represents Boeing workers at the plant.
Boeing spokesman Rick Sanford said the contract was good for employees and customers, calling Sunday’s vote “a strong acknowledgment of a commitment to get it right.”