Boeing wants to drop pensions for new hires

/ Source: The Associated Press

When Boeing Co. and unions representing machinists and aerospace engineers sit down to hammer out new contracts later this year, the airplane maker says it plans to talk about changes to retirement benefits for new hires.

Boeing spokesman Tim Healy said in an interview Friday that the company will propose to offer new union hires 401(k)-style plans, and not the more traditional pension plans.

The change is "about attracting a new generation of employees that may not have the same appreciation for the value of the traditional pension," Healy said. "The new generation may not be willing or have a desire to stay at the same company for 30 years," and would instead favor a more portable retirement plan.

Healy added that the proposal is at an early stage, and is just one item on the agenda for upcoming talks with the International Association of Machinists and Aerospace Workers and the Society of Professional Engineering Employees in Aerospace.

The IAM contract applies to 27,000 workers and is scheduled to expire Sept. 3. The SPEEA contract covers about 21,000 employees and will expire Dec. 3. Negotiations are set to start months ahead of time.

While Boeing said it has broached the subject with both unions, comments made by top labor negotiator Doug Kight and published in Seattle-area newspapers Friday seem to have taken both by surprise.

"They have never come out and said, it is our goal," said Tom Wroblewski, president of Machinists Union Local 751, in an interview. "I'm pretty upset about it."

Wroblewski said the company's plans would shrink new employees' retirement savings and leave them more vulnerable to market swings. He also said part of the union's philosophy was to protect future employees.

Both Wroblewski and Ray Goforth, SPEEA's executive director, said if Boeing insisted on an unacceptable change to retirement benefits, the unions would not hesitate to strike.

"If the employer wanted to restructure the retirement package in a way that didn't take money away from the employees, we're open to discussing anything. But what they're trying to do is take money away from employees and put it in their pockets," Goforth said.

Chicago-based Boeing's stock added $1.75, or 2.3 percent, to close at $78.66.