SPEEA Contract Offer - Questions and Answers

Contract Overview

Q. How would Boeing summarize its contract offer?

A. We’ve offered an outstanding pay and benefits package that recognizes and rewards the contribution our SPEEA-represented employees have made to the current success of the company. It allows the company to remain competitive and enables us to attract and retain the talented people who design, build, support and improve the world’s finest aerospace products.

Q. What’s in it for employees?

A. This is a market competitive package that rewards employees with salary and pension increases and improved health care at a slight increase in cost. It also includes significant changes to the contract language pertaining to use of non-Boeing labor to address the union’s desire for a dialog in the process and Boeing’s need to retain the flexibility necessary to run its business. Boeing also agreed to include in this contract the approximately 100 SPEEA-represented engineers who work in Utah, which was of considerable importance to the union.

The contract offer includes:

  • A salary adjustment fund of 5 percent in each year of the contract for both professional engineers and for technical workers. For the Professional Unit, every member of the bargaining unit is guaranteed a 2 percent increase in their annual salary in each year of the contract; for the Technical Unit, each member of the bargaining unit is guaranteed a 2.5 percent increase in their annual salary in each year of the contract.. For both groups, the remainder will be distributed annually, in the spring, as part of the annual salary review process.
  • An overtime premium of $15 per hour for professional engineers who exceed the limit of 144 hours of overtime per quarter – through the end of 2010.
  • An improved vacation plan that awards 40 hours of vacation immediately on hiring.
  • A limited vacation accrual payout option for employees who have reached their banked vacation maximum – through the end of 2010.
  • Boeing’s industry-leading pension increases to $81 per month for each year of service in years one to three of the contract and $83 per month for each year of service in year four (an 18 percent overall increase). Many SPEEA-represented engineers and technical workers retire under an alternate benefit formula that pays more than the basic benefit.
  • Improvements to our already outstanding health care programs, including enhanced wellness, vision and mental health provisions, while still offering a plan that requires no payroll deduction from employees.
  • Continued participation in the Employee Incentive Plan (EIP).

Q. Why is Boeing’s offer for four years?

A. SPEEA proposed a four-year contract. Also, Boeing believes that a longer contract adds to long-term stability for Boeing, its employees, customers, suppliers and communities.

Q. What is the expiration date for this contract?

A. This four-year contract expires at the end of Oct. 6, 2012.

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Pay

Q. When will the new alary adjustment funds be distributed?

A. The salary adjustment funds will be distributed annually, in the spring, as part of the annual salary review process.

Q. What does Boeing mean when it says it pays “market-based wages”?

A. We mean that our salary structure is based on a market-based salary analysis to ensure that our salary and benefits packages allow us to attract and retain the talent the company needs to succeed in our competitive business environment.

Q. Why is Boeing offering an overtime premium for someone who works in excess of 144 hours of overtime in a quarter?

A. One hundred forty-four hours of overtime is the contractually agreed upon amount of overtime that the company can require a SPEEA member to work in a quarter. When Boeing is in the developmental phase of new programs, engineers (professional unit) may be needed for more than 144 hours and can volunteer to work the extra. In recognition of this extra effort and sacrifice, Boeing is offering to pay a premium: time plus $15 per hour for all hours worked in excess of 144 hours per quarter through the end of 2010. The first 144 hours of overtime will continue to be compensated at the rate of time plus $6.50 per hour.

Q. What is a “vacation accrual payout”?

A. Currently, an employee can carry unused vacation credits from one year into the next. However, when the balance in his or her vacation bank reaches two years of credits, the award of additional vacation stops until the employee uses some of the existing credits. Under Boeing’s proposal, rather than stopping the award of vacation credits when an employee reaches the maximum, Boeing instead will pay out these unaccrued credits through the end of 2010. This improvement is meant to recognize SPEEA members who have reached the maximum vacation accrual but have been unable to take vacation because of their dedication to supporting Boeing’s current business demands.

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Q. How much has the EIP paid out?

A. The EIP has paid out 41 additional days of pay since 2005.

Voluntary Layoff with Benefits

Q. How does Boeing’s proposed voluntary layoff with benefits program work?

A. Boeing and the union agreed The Company will establish a voluntary layoff pilot program. The program would only be used in situations where it makes business sense and approved by the business unit and functional skill leaders.

The voluntary layoff process supports the company’s business strategy and employment stabilization goals and integrates with the redeployment process. It’s designed to be fair and equitable to employees while balancing the loss of skilled midcareer employees and new hires. Employees who are eligible for voluntary layoff will receive one week of severance pay for every two years of completed service, up to a maximum of 13 weeks, plus continuation of health care benefits for up to 90 days from the layoff effective date.

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Health Care

Q. What’s changing in the health care plans?

A. SPEEA expressed interest in benefit enhancements, particularly around improved preventive care and improved prescription drug benefits in the Traditional Medical Plan. Boeing listened to the union and proposed improvements in these two particular areas, along with other enhancements. The company will continue to pay the majority of the cost increase from the enhancements but is proposing slight cost increases for employees. For details, see the Contract Offer Summary.

Q. Is Boeing still offering a plan with no monthly payroll deduction?

A. Yes. We have agreed to offer two plans in each location that do not require a payroll deduction from employees. In Washington, the Traditional Medical Plan, which currently requires no payroll deduction, will remain the no-contribution plan for the life of the contract. The new PPO+Account also will be offered as a no-contribution plan in Washington.

Q. How much extra is Boeing asking employees to pay for health care?

A. For Washington participants in the Traditional Medical Plan, the deductible is going up by approximately $25 per year for an individual; $75 for family coverage. For participants in the other plans, the monthly payroll deduction may increase as the cost of the plan increases, but the payroll deduction remains at 12 percent of the cost.

The increases will pay for significant improvements including wellness enhancements. For details, see the Contract Offer Summary Boeing offers excellent health care benefits to all our employees. The company’s health care costs are expected to grow by 7 percent in 2008, and Boeing intends to cover the majority of the increase. This contract offer would only slightly increase the cost to employees for health care and insurance coverage during the life of the contract. (The exact amount depends on the medical plan employees choose and their health care needs.) Still, Boeing employees would pay significantly less for their health care than employees at similar companies.

Q. Why are employees being encouraged to use generic prescription drugs?

A. Boeing is offering the Generic Incentive Program because it wants employees to use generic prescription drugs. Generics contain the same active ingredients as name-brand drugs and typically are less expensive for both the employee and for Boeing.

Q. How does the Generic Incentive Program work?

A. To encourage the use of generic drugs, if a brand-name drug is purchased when a chemically equivalent generic is available (for both retail pharmacy and mail service), you’ll pay the generic coinsurance or copayment plus the cost difference between the brand-name drug and generic drug. See fact sheet

If your prescription drug does not have a generic equivalent, this program does not apply to you.

If your doctor wants you to take the brand-name drug, he or she can request a coverage review. The prescription drug service provider will review your doctor’s request. If coverage is approved, you simply pay the copayment for the brand-name drug and Boeing pays the rest. This Generic Incentive Program will go into effect on July 1, 2009.

Q. Why is Boeing proposing changing the plan year, and how will it work?

A. Boeing and employees both stand to benefit from a move to a calendar plan year. For employees, a calendar year will allow them to better plan for funds they may direct into their flexible savings accounts, which are administered on an annual basis. For Boeing, it’s more efficient to have health plans administered on a calendar year, as with most of the company’s other health plans.

To make this transition, there will be a six-month plan period from July 1, 2009, to Dec. 30, 2009. Employees will have an annual enrollment period in the spring of 2009 for the six-month plan. Employees will have another annual enrollment period in the fall of 2009. Then, they'll be on a calendar plan year starting Jan. 1, 2010.

Effective Jan. 1, 2010, the benefit year will change from July 1 through June 30 to a calendar year, Jan. 1 through Dec. 31. For the six-month plan year from July 1, 2009, through Dec. 31, 2009, highlights of the transition plan will include:

  • The medical plan out-of-pocket maximum will be half the annual maximum.
  • For the medical and dental plans, the deductible will be half the annual deductible amount.
  • Employees will have enrollment opportunities before the July 1 and Jan. 1 plan effective dates.

Pension and Retirement

Q. How much will the pension benefit increase?

A. An increase to the basic pension benefit boosts it to $81 per month for each year of service in years one to three of the contract and $83 per month for each year of service in year four. That makes it one of the best pension benefits in the aerospace industry.

Base pay increases and the incentive plan payments in this contract offer will generate additional pension increases for employees who retire under the alternate, pay-based formula.

Employment Security and Non-Boeing Labor

Q. How has Boeing addressed SPEEA’s concerns about the use of contract labor?

A. Changes to the contract

  • Recognize that Boeing’s direct technical and engineering team is the foundation of our competitiveness.
  • Recognize that it is in the best interest of the company, the union and employees to understand the nature of Boeing’s business strategies and plans regarding the use of non-Boeing labor.
  • Give SPEEA regular opportunities to provide input on the use of non-Boeing labor.

Note: These questions and answers are intended to summarize portions of the contract. The most accurate and complete information is the contract language itself, and Boeing encourages you to review the contract as your best source of information.

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