Boeing

SEATTLE, May 9 /PRNewswire-FirstCall/ -- Boeing (NYSE: BA) and the International Association of Machinists and Aerospace Workers (IAM) today began negotiating a new labor contract for more than 26,000 employees, largely in the Seattle area, Portland, Ore., and Wichita, Kan.

"Boeing is committed to providing employees with outstanding pay and benefits, and we intend to reward employees for generating productivity improvements that help us meet our commitments to customers and win new business," said Doug Kight, the Boeing vice president of Human Resources responsible for these negotiations. "Working with the union, we've agreed to start discussions much earlier than usual. This will allow us to spend more time listening, understanding each other's positions, and resolving issues early.

"We intend to move away from focusing on last-minute bargaining and instead conduct these negotiations in an open and transparent manner," Kight added. "That way, employees -- and their family members -- can fully understand the issues and the value of the contract when they vote on the company's offer in September."

During today's opening session, Boeing outlined key areas for negotiations, including:

  -- Providing wages for manufacturing employees that are well-positioned
     relative to the market. This could include increasing minimum pay
     rates, providing general wage increases that won't change maximum wage
     rates, and finding alternate ways to provide additional compensation
     for employees earning maximum pay rates.
  -- Sharing the company's success through a performance-based incentive pay
     plan that rewards employees for productivity gains.
  -- Providing pension increases for current employees at rates that can be
     sustained over the long term. Since 1999, pensions for IAM-represented
     employees have increased at an average of more than 7 percent per year,
     to the point where IAM-represented employees now have the opportunity
     to earn more in retirement than while working. Boeing believes this
     rate of increase is unsustainable.
  -- Establishing a new retirement program for employees hired in the
     future. Designed to attract the next generation workforce, this plan
     would vest immediately, be portable for individuals who change
     companies during their career, and provide excellent opportunities for
     financial security for individuals who spend their entire career at
     Boeing. It would not affect pensions of current employees.
  -- Continuing to offer excellent medical, dental and vision care benefits
     at costs to employees significantly below market levels. This would
     include offering at least one plan in Washington, Oregon, Kansas and
     California without monthly premiums. This would also include exploring
     ways to modestly increase health care costs paid by employees. Boeing
     will continue paying the vast majority of total health care costs.
  -- Continuing to offer early-retiree medical coverage for current
     employees who choose to retire before the age of 65. Discontinuing
     early-retiree medical coverage for individuals hired in the future,
     while adding a plan that enables these individuals to save for
     long-term medical expenses on a tax-advantaged basis.
  -- Working with the union to study ways to stabilize employment and
     mitigate layoffs through the market cycles. This could include
     approaches such as flexible job rules that allow Boeing to keep
     employment levels stable and cost effective during market downturns and
     periods of slow growth.
  -- Creating greater stability for employees, customers and communities by
     negotiating a contract longer than three years.
  -- Negotiating a separate contract for the approximately 750
     IAM-represented employees in Wichita. To ensure that Boeing Wichita is
     positioned to gain new business, the company believes that wage rates,
     benefits and work rules need to be better aligned with competitors in
     the military aircraft-modification business.
  -- Continuing to spend approximately $14 million annually on IAM/Boeing
     Joint Programs that enhance employee health, safety and job skills, and
     promote employee engagement.

Boeing also is proposing to maintain much of the existing contract without changes, including more than 150 articles, subsections and letters of understanding.

"Today, the IAM provided us with proposals that we will study carefully," Kight said. "The information we exchanged today is a starting point for thoughtful, productive discussions. Throughout the summer, we'll focus on reaching agreements that are in the best interest of employees, our company, our customers and all Boeing stakeholders."

Full details of the information Boeing exchanged with the union today is available online at http://www.boeing.com/2008negotiations.

Currently, IAM-represented employees earn an average base wage of nearly $27 per hour, or nearly $56,000 annually before overtime. In addition, they receive benefits valued at more than $24,000 annually. Combined, total compensation for IAM-represented employees -- including overtime pay, lump-sum wage payments and other benefits -- is valued around $91,500 per year.

A new contract with the IAM is anticipated to be in place by Sept. 4.

Boeing will negotiate new contracts with its two largest unions this year. Formal negotiations for more than 20,000 engineers and technical employees in Washington and Oregon represented by the Society of Professional Engineering Employees in Aerospace begin later this year, with new contracts anticipated to be in place by Dec. 2.

SOURCE: Boeing

CONTACT: Tim Healy of Boeing Commercial Airplanes Communications,
+1-206-321-3936

Web site: http://www.boeing.com/