Boeing is raising its offer to end the strike

By Chris Isidore and Vanessa Yurkevich, CNN

New York (CNN) — Boeing announced Monday that it raised its offer to the International Association of Machinists (IAM) union as the strike against the company enters its 11th day.

The new offer would give members a 30% raise over the four-year life of the contract, including an immediate 12% raise, up from the 25% in overall raises and an immediate 11% raise that membership voted almost unanimously against on September 12, just before walking off the job at Boeing plants on the West Coast.

“We heard your feedback,” said a statement from Boeing to union members on its website. “We’ve made significant improvements to provide more money in key areas.”

The new offer also doubled a signing bonus to $6,000, and increased the money that Boeing would contribute to 401(k) plans of union members to match contributions they make themselves. But it did not restore the traditional pension plan that union members lost 10 years ago in a previous labor agreement.

The strike, which has brought production of commercial jets to a near-halt, is the first at the troubled aircraft maker in 16 years. Despite its many problems – including the loss of more than $33 billion over the last five years – Boeing is still a major force in US manufacturing and vital to America’s air transportation system. It is the country’s largest exporter, and by its own estimates contributes $79 billion to the US economy, supporting 1.6 million jobs directly and indirectly at suppliers spread across all 50 states.

In a decision that took place just before the strike began, 95% of union members voted against the previous tentative labor agreement. The company said the new offer was contingent on a contract being ratified by September 27.

But the union said the new offer “does not go far enough to address your concerns, and Boeing has missed the mark with this proposal.”

The union said there will not be a ratification vote by the rank-and-file by the September 27 deadline because there is not enough time to educate members about the offer and because it was a unilateral offer from the company, not something reached through the process of negotiation.

It also criticized Boeing for announcing the highlights of the offer while it was still being considered by the union’s bargaining committee.

“They are trying to drive a wedge between our members and weaken our solidarity with this divisive strategy,” the union said. “This tactic is a blatant show of disrespect to you – our members – and the bargaining process. Boeing does not get to decide when or if you vote.”

“It is vital that we negotiate a successful resolution to this strike,” the union said in its statement late Monday. “We contacted the company to demand they engage in either direct talks or a mediated discussion. The company has refused to meet for further discussion; therefore, we will not be voting on the 27th.”

And by Tuesday afternoon, the company backed off the timeline, saying it was giving the union more time to consider the proposal, as well as offering logistical support for a potential vote.

Boeing said that it shared the offer with employees in the name of being transparent.

“We have bargained in good faith with the IAM since formal negotiations began in March,” the company said in a statement.

“After an unsuccessful federal mediation last week, we presented a best and final offer that made significant improvements and addresses feedback from the union and our employees,” it added. Boeing did not address if or when it will return to the bargaining table.

‘Rather laughable’

Earlier in the day, the union, which has more than 33,000 striking union employees, issued a statement saying it was still reviewing the new offer. It said the improvements in the offer from the previous tentative agreement shows that members were right to reject the previous offer and demand better.

“This news validates every step that hardworking Boeing employees have taken on the picket line thus far,” said Brian Bryant, IAM’s international president. “Employees knew Boeing executives could do better, and this shows the workers were right all along. The proposal will be analyzed to see if it’s up to the task of helping workers gain adequate ground on prior sacrifices.”

Brandon Felton, who only started work at the Boeing plant in Everett, Washington, in June, told CNN he would vote again against this new offer, which he described as “rather laughable.”

Felton said the 40% raises originally demanded by the union was “not unreasonable” and a minimum of what he would vote to accept. He said he also wants to see a return of the pension plan.

“It would be nice to have a guaranteed retirement considering the wear and tear this job puts on your body,” he said.

Union members have expressed anger over the concessions they have given up since the last strike in 2008, such as the loss of pension plans, which they agreed to only after Boeing threatened to move production of two new aircraft to non-union plants. The company had already moved production of the 787 Dreamliner to a nonunion plant in South Carolina. That plant continues to operate during the strike.

While Boeing may not lose any sales due to the strike, the inability to assemble and deliver planes already ordered by airlines cuts off a vital source of cash. Boeing gets most of its payment only upon delivery of an aircraft to an airline.

The company has announced that many of its non-union staff will be furloughed without pay one week out of every four during the duration of the strike, and that it will cut back purchases to suppliers and vendors in an effort to save cash. It said it will also reduce pay of top executives.

This story has been updated with additional reporting and context.

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Correction: An earlier version of this story incorrectly stated the start date for Boeing employee Brandon Felton. He started in June.