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Boeing settles on second try.

Members of the Seattle Professional Engineering Employees Association, in a second ratification vote, accepted the same 3-year collective bargaining agreements they rejected last December. The pacts covered about 15,000 scientists and engineers and 13,400 technical employees in California, Florida, Oregon, Texas, Utah, and Washington.

Wages, cost-of-living adjustments, medical benefits, and job security were key bargaining issues in the negotiations. The union had sought salary adjustments to bring engineers' and technical workers' pay up to industry averages, full cost-of-living protection, improved health care coverage, an agency fee provision requiring nonunion workers to pay for the services the union must provide as their bargaining agent, time and one-half or double-time for overtime, and career development for professional employees.

Terms of the contract for the technical unit called for general wage increases of 4 percent in the first year and 2 percent in each of the following 2 years, as well as selective salary adjustments (potential merit pay increases) of 5 percent in the first year and 3 percent in each of the following 2 years. The agreement for the professional unit provided selective wage adjustments of 3 percent in December 1992 and June 1993, followed by four semiannual adjustments of 2.5 percent. In addition, both contracts continued cost-of-living clauses and included, in the first year, a lump-sum bonus equal to 6 percent of an employee's qualified earnings.

Boeing agreed to continue to pay the full costs of medical and dental coverage for employees and their dependents, with no change in deductibles. Negotiators made several changes in medical and dental benefits, some involving cost-containment measures. They agreed to offer a preferred provider organization health care plan with 100-percent coverage after the employee reaches the deductible. The parties increased emploee copayments for health insurance benefits from 20 percent to 30 percent of costs for nonpreferred provider physicians and hospitals in areas with preferred provider organizations, with maximum out-of-pocket expenses of $1,000 for individual coverage and $2,000 for family coverage. Negotiators established a preferred pharmacy drug card program, with reimbursement at 90 percent for purchases of generic drugs and 80 percent for brand name drugs when the drug card is used and 70 percent when the drug card is not used; instituted a new referral service for substance abuse, mental health, and eating disorders, effective in May 1993; and enhanced dental benefits by updating the covered benefit amounts and increasing the annual dental maximum from $1,500 to $2,000 and the lifetime orthodontic maximum from $1,500 to $1,700.

The parties negotiated several changes in other benefit areas. Employees would be paid for half of unused sick leave accrued at the time of retirement or death. They also would receive the highest retirement benefits calculated by the basic benefit formula, the current alternate formula, or the pre-1989 alternate benefit formula. Employees opting for basic formula benefits would receive $35 a month, up from $30, for each year of credited service. Participants in the Voluntary Investment Plan would have more flexible rollover options to contribute to, or withdraw from, IRA's and other qualified plans, would be able to borrow up to 50 percent of the total vested value of their accounts, and would be eligible to carry two loans against their accounts at one time.

Other terms retained the maintenance of membership clause, but with one open period instead of two; provided 36 holidays over the term of the contract; eliminated the union's right to grieve jurisdictional disputes; established a joint committee on Oversight of Cooperative Initiatives, such as career enhancement, alcohol and drug abuse, and performance management; removed the labor grade reduction provision in the professional unit's contract; and enhanced union security provisions.

Boeing recently completed a year-long program cutting 9,000 jobs through attrition and layoffs. The company also recently announced that it would cut between 15,000 and 20,000 additional jobs this year and expects to eliminate more next year. The reductions result from the elimination of three missile programs, the scaling back of production of the B-2 stealth bomber, and cutbacks in the production of the 737 commercial jet.
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Title Annotation:acceptance of collective bargaining agreement
Publication:Monthly Labor Review
Date:May 1, 1993
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