WASHINGTON — The union representing almost 2,500 machinists at three Boeing Defense factories has voted to reject the company’s latest contract offer and strike beginning Aug. 1.
The International Association of Machinists and Aerospace Workers District 837 said in a release issued Sunday talks broke down over what it saw as an inadequate 401(k) plan.
“We cannot accept a contract that is not fair and equitable, as this company continues to make billions of dollars each year off the backs of our hardworking members,” the union said in the release. “Boeing previously took away a pension from our members, and now the company is unwilling to adequately compensate our members’ 401(k) plans.”
In an email to Defense News, Boeing said it planned to keep its factories operating if the strike takes place next week.
“We are disappointed with Sunday’s vote to reject a strong, highly competitive offer,” the company said in an email. “We are activating our contingency plan to support continuity of operations in the event of a strike.”
The union and Boeing have a pre-existing agreement to allow a seven-day cooling off period before the strike officially begins, during which negotiations could continue, union spokesman DeLane Adams told Defense News.
Jody Bennett, chief of staff for the union’s aerospace department, told Defense News the union is not satisfied with Boeing’s proposal to phase out its automatic contributions to machinists’ 401(k)s, which take place without employees needing to contribute.
Bennett said the 401(k) that replaced the defined benefit pension in 2014 first had the company making its own automatic contributions of 9% of a worker’s salary, which was then gradually reduced over the next few years until reaching its current level of 4%.
Boeing offered to increase the matching contribution — which is now 75% for the first 8% employees contribute from their own salaries — to a 100% match of a 10% contribution, Bennett said. But while that makes the matching contribution more generous, he said, Boeing’s proposal would drop the 4% automatic contribution in 2023 in favor of 2% lump sums at the end of the year for employees on the payroll on the last days of 2023 and 2024. After that, Bennett said, those lump sums go away entirely.
Bennett said the union wants Boeing to keep the 4% automatic contribution, as well larger increases to employees’ salaries along the pay scale. He said the union and Boeing are currently not talking.
The strike would cover Boeing’s locations in St. Louis and St. Charles, Missouri, and Mascoutah, Illinois. The St. Louis facility is where aircraft such as the T-7A Red Hawk trainer, F-15 and F/A-18 fighters and the MQ-25 Stingray unmanned refueling aircraft are built, and the St. Charles facility produces weapons such as precision-guided Joint Direct Attack Munition kits.
Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.