Speaking of the issues
Pay proposals
August 26, 2008 – click here to read second offer highlights
August 22, 2008 – click here to read first offer highlights
August, 19 2008: - Incentive plan – potential days of pay based on performance against targets
On July 21, Boeing began subcommittee discussions with the IAM on an incentive plan that could provide employees with cash payments each year if Boeing achieves targets for financial performance (as measured by Economic Profit, or EP), Quality (as measured by the Cost of Rework, Repairs and Scrap, or CoRRS) and Safety (as measured by Lost Work Day Case Rate, or LWDCR). Boeing has now presented more details, which are summarized in this fact sheet. We have also created a presentation that managers should share with their teams in meetings.
This plan awards days of pay based on performance against all three targets. If targets are met, the plan will provide 10 extra days of pay each year. If targets are exceeded, the plan will provide between 11 and 20 extra days of pay annually. If targets are not met, the plan will provide between 0 and 9 days of pay annually. The first potential payout would be in early 2011 based on next year’s performance.
The entire bargaining unit will have the same targets, which will be set, evaluated and adjusted as needed each year. Targets will be shared with the union and employees when the targets are finalized.
August 4, 2008: Minimum pay rate increases proposed
Boeing has offered to increase the minimum pay rate by $1.28 per hour. Employees who earn less than the proposed minimum rate - after the application of COLA and any general wage increases - will automatically move to the new minimum rate.
Boeing and the IAM will discuss general wage increases later in the negotiations process.
The proposed minimum pay rate increases for labor grades 1-11 are listed below. Pay rates for labor grade A (Factory Service Attendant) are being discussed separately. This offer is consistent with the priorities outlined in Boeing’s Platform for Discussions, which was presented to the IAM on May 9, 2008.
Labor Grade |
Current Minimum |
Proposed Minimum |
1 |
$9.72 |
$11.00 |
2 |
$10.72 |
$12.00 |
3 |
$11.72 |
$13.00 |
4 |
$12.72 |
$14.00 |
5 |
$13.72 |
$15.00 |
6 |
$14.72 |
$16.00 |
7 |
$15.72 |
$17.00 |
8 |
$16.72 |
$18.00 |
9 |
$17.72 |
$19.00 |
10 |
$18.72 |
$20.00 |
11 |
$19.72 |
$21.00 |
July 21, 2008 – Proposed Team Leader Enhancements
The Team Leader program has helped create and maintain a team environment as well as coordinate operational issues. Boeing proposed that a few enhancements be made to this program:
- Boeing proposed to increase the premium each Team Leader is paid beyond his or her base pay from $1.75 to $2.00 per hour.
- Boeing listened to the IAM’s concerns about how Team Leaders are selected, and proposed a process that the union can use to appeal (1) the company’s decision to discontinue the assignment of any bargaining unit employee selected for a team leader position; (2) a team leader progress review; and (3) the duration of a temporary team leader assignment.
Team Leaders bring great value to Boeing’s ability to compete and become more productive.
July 21, 2008: Incentive pay plan introduced
Boeing announced its intent to introduce an incentive plan with achievable goals that rewards employees with a cash payment for their contributions to the company. Boeing is convinced that rewarding employees for productivity gains is the right thing to do. It also would give employees a distinct line of sight on how their performance impacts overall financial performance, quality and safety by paying out extra days of pay if targets are met or exceeded each year. Like most incentive plans, this plan would provide reduced payments if we fall short of our targets. Many employees already are familiar with our proposed plan metrics:
- Financial performance = economic profit Economic profit is the standard metric Boeing uses to measure financial performance. It is calculated by subtracting the capital charge (“cost of capital” associated with holding inventory and equipment needed to support the business) from net operating profit after taxes. This is the metric used in determining other incentive payouts such as the Employee Incentive Plan and executive compensation for salaried employees.
- Quality = cost of rework, repair and scrap (CoRRS) CoRRS is a standard metric used to measure the cost of unplanned manufacturing efforts in terms of rework, repair and scrap in relation to the total manufacturing touch labor cost.
- Safety = lost work day case rate (LWDCR) The LWDCR is the actual number of lost workday cases in a year for every 100 employees. A lost work day case is defined as an occupational injury or illness that results in one or more days away from work.
During subcommittee meetings and discussions with the joint Boeing/IAM steering team, Boeing will continue to talk about possible ways for the payouts to be calculated and awarded.
