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Aerospace industry update.

Aerospace industry update

A new 3-year contract, covering 6,000 employees in the Eddystone, PA, area, was reached between Local 1069 of the United Auto Workers and Boeing Helicopters, a leading producer of military rotorcraft. The pact is similar to one Boeing Helicopter's parent company, The Boeing Co., negotiated with the Machinists earlier. (See Monthly Labor Review, February 1990 for terms of that settlement.) The Boeing--Machinists settlement, the first in the 1989 round of negotiations in the aerospace industries, was expected to influence subsequent settlements in the industry.

The Boeing Helicopter--Auto Workers contract provided for a 4-percent wage boost retroactive to October 5, 1989, and 3-percent increases in October of 1990 and 1991. In addition, employees received a lump-sum payment in December 1989, equal to 10 percent of their earnings during the preceding 12 months, to be followed by a similar 5-percent payment in December 1990 and a 4-percent payment in December 1991.

Other provisions include:

* A new cost-of-living formula providing quarterly adjustments at the rate of 1 cent an hour for each .075-percent change in the Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers.

* An increase in the noncontributory retirement plan's monthly pension rate to $30 for each year of credited service for employees retiring on or after January 1, 1990. (Under the prior contract, rates were $22 for years of credited service earned prior to 1987, $24 for 1987 and 1988, and $26 for 1989.) Also, on January 1, 1990, the monthly pension rate increased by $1 for each year of credited service for retirees who left the company between January 1, 1984, and December 1, 1986, and by $2 for each year of credited service for retirees who left prior to 1984.

* Several improvements in medical benefits, including a reduced number of in-patient surgical procedures requiring a second opinion, expanded coverage for well-baby care, and increased benefit limits for substance abuse. Other medical plan changes include coverage for nutritional guidance, infusion therapy, organ donor expenses, routine physical examinations for active employees and their spouses, and certain eating disorders.

At Boeing in Seattle, WA, members of the Seattle Professional Engineering Employees Association rejected a tentative accord covering about 15,000 engineers and scientists, and accepted a contract for 12,000 technical employees. Negotiations on the two contracts had resulted in settlements which met most of the association's demands, except for general wage increases, lump-sum payments, and cost-of-living allowances. Even after the association scaled back its demands, the company's final money package presented to association memebers for ratification reportedly was below that in the Boeing--Machinists settlement.

The association's proposal for the technicians called for a 14-percent general wage increase in the first year, followed by selective adjustments every 6 months thereafter; improvements in the cost-of-living adjustment (COLA) provision; and a modification in the wage structure.

Boeing's counter proposal, which was accepted by the association, provided for a general wage increase of 3 percent retroactive to December 2, 1989, and 2-percent increases in December of 1990 and 1991; lump-sum payments equal to 10 percent of an employee's earnings in the preceding 12 months, payable in December 1989, followed by a similar 5-percent payment in December 1990 and a 4-percent payment in December 1991; selective adjustments of 2 percent in June of each year; and no modification of the present COLA clause or the wage structure.

While the Seattle-based engineers were rejecting the tentative settlement at Boeing, 1,700 engineers at the company's Wichita, KS, facility, represented by the Machinists, ratified a new 3-year contract that provides essentially the same terms as the Seattle Professional Engineering Employees Association agreement for the technicians.

The Machinists contract also calls for a package of job protection provisions in anticipation of a shift from military to commercial aircraft production. Under this provision, laid-off engineers are eligible for retraining to perform commercial aircraft structures work. The union defeated a company proposal to change the current layoff retention language, which provides for placement of employees in four groups for retention rating by supervisors in event of layoffs. In addition, a special grievance procedure was added to hear retention disputes. Although this special procedure includes only the first two steps of the regular grievance procedures, Boeing supervisors, for the first time, must reveal the reasons for an employee's retention rating.

The money package includes a lump-sum payment in December 1989, equal to 10 percent of the employee's earnings during the preceding 12 months; a 3-percent general wage increase retroactive to December 2, 1989; and six 2-percent semiannual selective adjustments. (The selective adjustments, which are based on merit, are made at the company's discretion.) The union also tightened contract language for selective salary adjustments. Under the prior agreement, the semi-annual adjustment money pool was offset by any increase in the bargaining unit's average salary. The new pact calls for distribution of the entire money pool without an offset.

Other terms include:

* A "me-too" clause, which provides that any more favorable terms negotiated by the Seattle-based engineers be extended to the Wichita engineers.

* Improved pension benefits for active employees equal to the greater of a $30 (was $24) monthly pension rate per year of service, or average earnings in the highest 60 months of the last 120.

* Increased monthly pension benefits for retirees equal to the greater of $1 per year of credited service or a percentage increase based on the number of years of retirement.

* Improved medical benefits for both active employees and retirees, including new coverage for routine physicals and well-baby care and extended coverage for vision care, hospice care, alcohol and drug abuse treatment, and eating disorders.

Elsewhere, McDonnell Douglas and the Machinists settled for 8,000 workers in six facilities in three States. The 3-year agreement reportedly includes wage increases of 5.5 percent retroactive to October 23, 1989, and 3 percent in the second and third year. Employees will receive lump-sum payments in each of the 3 years, calculated at 4 percent of earnings in the preceding 12 months. The monthly pension rate increases by $6, to $29, for each year of service. The accord also calls for a 20-cent-per-hour increase (to 50 cents) in the differentials for working the second shift and for being an elected team leader. The shift differential is retroactive to October 23, 1989, while the team leader differential became effective December 18, 1989.

Meanwhile, negotiations between Lockheed Aeronautical Systems and the Machinists, which had broken off in October, resumed in December. The contract talks are for some 6,200 employees at three of the company's facilities in southern California. The major issues in dispute reportedly are wages, increased employee contributions for health care premiums, and the COLA formula. The employees are currently working under a day-to-day extension of the contract. The union has stated that it does not consider the Boeing--Machinist contract as a standard for a settlement at Lockheed.
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Title Annotation:Developments in Industrial Relations
Author:Cimini, Michael H.
Publication:Monthly Labor Review
Date:Mar 1, 1990
Words:1146
Previous Article:Traditional labor relations.
Next Article:Detroit newspapers - five unions.


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