The Boeing Company (NYSE: BA) just reached a tentative agreement with its 20,500-member engineering union, the Society of Professional Engineers in Aerospace (SPEEA). This puts to rest the labor woes that cast a shadow over the company beginning in September. On November 1, Boeing settled a 54 day strike with its 27,000 member machinists union. And today, Boeing looks like it will avert a strike with SPEEA if the parties sign a contract by December 1.
In the negotiations, SPEEA wanted a specific limit on subcontracting engineering work and Boeing wanted to make sure that contract improvements would be affordable if there was a slowdown and that it would have outsourcing flexibility to stay competitive. Boeing initially asked engineers to pay more of their health care costs and for new engineers to accept a 401(k)-style retirement plan rather than the current defined-benefit pension program.
Boeing engineers are well-paid. 13,000 of them in Washington state, Oregon, Utah and California make an average of $88,000 a year, and its 7,000 technical workers average $67,000. But SPEEA wanted more -- 10% annual raises through 2011, more vacation days, higher overtime rates, a restoration of early retiree medical benefits and changes to the health-care and pension plans.
The terms of the tentative agreement are not yet clear. But Boeing should be happy that if SPEEA signs, it will be able to focus on building aircraft rather than negotiating with its workers.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, will be published by Portfolio on December 26, 2008. He has no financial interest in Boeing securities.
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Reader Comments (Page 1 of 1)
11-14-2008 @ 8:56PM
Uri said...
By what metric is $88k well paid? The national average for many fields of engineering are considerably higher than that, without even comparing to other professions with comparable intellectual and educational requirements (law, medicine, finance, etc). Compared to other employees in the area, like Google and Microsoft, the pay looks even worse. Designing airplanes has to be more difficult than writing applications.
Engineers tend to shy away from using unions to enforce pay but I can see why Boeing engineers would consider the walkout. There aren't many other places for those employees to work. The only way to establish fair pay is through refusal to work.