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Nine months before their current contract is due to expire, members of the International Association of Machinists & Aerospace Workers (IAM) in Washington, Oregon and Kansas have approved an agreement extending their contract to September 2016.
The contract, ratified by 74 percent of those casting ballots, builds on a new spirit of cooperation between Boeing and the IAM and places production of the 737 MAX in Renton. It also continues fabrication work for the Next-Generation 737 and 737 MAX in other Puget Sound facilities and Portland, Ore.
To date, Boeing has received more than 700 commitments from customers for the 737 MAX. The new airplane is expected to enter service in 2017.
"This contract will help secure a better future for our employees, our customers, our communities and our company," said Jim Albaugh, president and CEO of Commercial Airplanes. "It reflects an effort on the part of the company and the union to find a better way to work together and achieve common ground. It's a balanced agreement that makes us more competitive and ensures that the 737 --the best single-aisle airplane in the world -- continues to be built by the people who know how to do it best."
The contract calls for wage and pension increases in each of the four years of the agreement, along with a one-time ratification bonus of $5,000, which will be paid on Dec. 15, the last hourly employee paycheck before the holiday break.
The contract also introduces an incentive pay plan for hourly employees. The plan tracks performance on such things as safety, quality and productivity. The individual scores of teams get rolled up into a single score for all of the hourly employees, which determines the incentive payout.
Adjustments to health care plans include improvements in key benefits balanced with modest cost increases that reflect a desire to make benefits more comprehensive while moving toward a market-based plan that shares costs between the company and employees.
The agreement also establishes a Joint Council for the company and union to regularly discuss issues including workforce, market, competition and performance.
For Boeing, the agreement reflects a new era in relations with its largest labor union, as the company and the IAM work together on issues of safety, quality and competitiveness. It also adds stability as the company continues to ramp up its production rates across all programs.
"Commercial Airplanes has unprecedented opportunities and challenges ahead as we deliver new airplanes to our customers, increase production rates and meet a new generation of competitors," said Albaugh. "With this vote, we commit to work together for our mutual success."