At the heart of the Boeing strike, an emotional fight over a lost pension plan
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At a rally this month in Seattle, machinists union vice president Gary Allen addressed a hall full of striking Boeing workers.
“When I'm out on the picket line, I ask everybody, what is the strike about to you?,” he said.
Allen didn’t even have a chance to answer his own question before the machinists in the room interrupted.
“Pension! Pension! Pension!,” they chanted.
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Pensions are a major sticking point between Boeing and the union. The machinists want the company to restore the traditional pension plan they lost a decade ago. But Boeing hasn’t budged.
The strike is now in its seventh week after union members rejected the company’s latest proposal. The union said late Sunday night it's "been in communication with the U.S. Department of Labor in an effort to spearhead getting back to the table." The work stoppage has hobbled production at Boeing’s airplane factories in the Pacific Northwest, contributing to a $6 billion dollar quarterly loss for the company.
On some issues, the two sides have moved closer to an agreement. But when it comes to the pension plan, they remain very much at odds.
“Definitely the loss of that pension is still there right at the heart of this for many,” said Jon Holden, the president of the International Association of Machinists and Aerospace Workers District 751, after members voted down the company’s latest offer last week.
The union says Boeing pushed members to give up their pension plan in 2014, in part by threatening to move production of new planes elsewhere if they didn’t. The company replaced that pension with a 401(k) retirement plan. A decade later, many workers still feel cheated.
“The 401(k) program is gambling on our retirement,” said Kat Kinckiner, a union steward who has worked at Boeing for close to 15 years. “To take away the pension and not compensate us enough to cover it? It's just another takeaway, and there's nothing unreasonable about wanting it back.”
Boeing is hardly the only company that’s eliminated traditional pensions, which are increasingly rare, especially in the private sector.
“It's a very costly and risky benefit to take on,” said Craig Copeland with the Employee Benefit Research Institute in Washington, D.C.
“The employee is promised a benefit and the employer must come up with that money to pay for it,” Copeland said. If the company’s investments don’t perform well, it’s still on the hook for pension payments. “So therefore, it could push them towards bankruptcy.”
By contrast, 401(k) plans are cheaper and easier for employers. But critics say they push all of the risk and responsibility onto workers.
“There's now a real recognition that workers want both good wages and good pensions,” said Karen Friedman, the executive director of the Pension Rights Center. “There's a growing appetite for secure pensions, and I think we're going to see more of it, honestly.”
Lately, more unions have been trying to bargain to get these benefits back. But so far, none of them has succeeded.
“If they did, they would be kind of turning back history for a lot of different people,” said Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations.
The United Auto Workers union tried to get a traditional plan pension back in a strike last year.
That didn’t happen. But the union did push the Big Three automakers to offer better retirement benefits and wages. And Wheaton understands why the Boeing machinists union is making the same ask.
“If you had it for decades and you gave it up in the last negotiations, it's not unreasonable to ask to get it reinstated,” Wheaton said. “But I don't think it's achievable.”
Boeing has improved its offer to the union on wages and other issues, but not on pensions.
The head of the machinists union local, Jon Holden, was asked last week what happens if the impasse continues.
“If they're not willing to give it, we've got to get something that replaces it and we haven't gone that far,” Holden said. “So it does come down to wages. It does come down to the 401(k) plan.”
What Holden is describing looks a lot like the deals that have ended other recent strikes. Boeing might hold the line on pensions. But it would have to pay even more in wages and retirement benefits than it’s been willing to offer so far.
KUOW's Casey Martin contributed reporting from Seattle, and Joel Rose reported from Washington, D.C.
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