Boeing and its largest union have failed to reach agreement on all non-economic issues before entering a two-week period of intense negotiations on a new labour contract.
Resolving the non-economic issues early has been a key goal for both sides since Boeing took the unprecedented step of starting discussions with the International Association of Machinists nearly a year ago.
But Doug Kite, Boeing VP of labour relations, says he remains "optimistic" about the outcome of contract talks despite the lingering non-economic questions and an apparently wide gap with union officials on salary and pension issues in the next three-year contract.
"We had a goal to reach agreement by the time we got to the hotel" on Thursday, where contract negotiations will continue until a planned vote on 3 September, Kite says. "We're not all the way to the goal, nor did we expect to be."
Of four labour-management subcommittees discussing non-economic issues, only one has reached an agreement, Kite says. He adds that two other subcommittees just need to hold one more meeting and the last group "has certain aspects close to being completed".
Overall, Boeing and IAM negotiators are in full agreement on 50% of the terms of the contract, Kite says.
But there appears to be a huge gap between Boeing and the union on certain critical economic issues as the "main table" round of negotiations begin on Thursday.
Kite says Boeing is unable to estimate the distance between the two sides's proposals because IAM has yet to make a full counter-offer.
However, the one economic issue where both sides have disclosed their proposals reveals a wide gulf. Boeing has offered a $1.28 raise for the minimum hourly pay, and the IAM has countered by demanding a $4.50 raise.
"I don't worry about it because the economic aspects of the contract have to be looked at in total," Kite says.
Boeing also proposes to eliminate pensions for new-hires, and instead offer them defined contribution plans with company matches.
IAM leaders have informed Kite to expect to receive a full counter-proposal in a few days, he says. Negotiations will continue to go back and forth through next week. Boeing is committed to submitting a best and final offer before next weekend, which coincides with the start of the Labour Day holiday in the USA.
"We will have a best and final offer before the Labour Day holiday so they have ample time to review it, assess it, study it, talk it over with their families and their co-workers so they can make a thoughtful decision," he says.
The union vote on the new contract is scheduled for 3 September, and the current contract expires at midnight.
Kite says Boeing is willing to wait on the union vote if the members need more time to weigh the final offer.
"You just tell us when you want to vote the contract," Kite says. "We'll back it off several days. There's nothing magic about September 3 to us."
Source: Air Transport Intelligence news
