Boeing, IAM Negotiators Reach Tentative Agreement; Vote Planned for Wednesday

SEATTLE, Dec. 11, 1995 - Boeing Chairman and Chief Executive Officer Frank Shrontz announced today that negotiating teams for Boeing and the International Association of Machinists and Aerospace Workers (IAM) reached agreement on all issues for a new four-year contract.

"While neither the company nor the union achieved all of their objectives, this proposal balances the interests of employees and shareholders while providing the opportunity for each of us to continue meeting customer expectations," said Shrontz.

"We encourage the employees represented by the IAM to seriously consider the provisions of this offer. We hope they understand that this proposal represents the limits of a prudent contract. For these reasons, we urge all IAM- represented employees to vote and to ratify this proposal," Shrontz said.

The ratification vote is scheduled for Wednesday, Dec. 13. If ratified, employees may return to work beginning with their first regular shift the following day.

Contract Term

Four-year contract through Sept. 1, 1999.

Wages:

1st year:

• Lump sum wage payment of 5% payable Dec. 22, 1995;
• A 5% strike-settlement incentive payable beginning Dec. 22, 1995;
• 30-cents-per-hour COLA will be pre-paid.

2nd year: Lump sum payment of 4.5% calculated from December1995 to December 1996 and payable by Dec. 20, 1996.

3rd year: General wage increase (GWI) of 3% in October, 1997.

4th year: General wage increase (GWI) of 3% in October, 1998.

The current cost-of-living adjustment formula remains unchanged.

Health Care Benefits

The following changes to group insurance benefits are effective July 1, 1996:

Optional Health Plans (OHPs)

A positive incentive is provided to encourage employees to enroll in the OHPs. Employees who enroll in an OHP will receive a payment of $600 in 1996, $400 in 1997, and $200 in 1998 (a total of $1,200 if an employee enrolls and stays in an OHP).

OHP co-payments for office visits have been reduced to $5 from $10.

OHP co-payments for prescription drugs have been reduced to $2 from $5 for generics and to $5 from $10 for name-brand drugs.

Boeing Medical Plan

Employees who choose to stay in the Boeing Medical Plan will pay no contributions before July 1, 1998. Contributions will be made only if the cost of the Plan increases more than the rate of medical inflation. In no event will contributions exceed $10 for an individual or $30 for a full family.

Boeing Medical Plan deductibles will be $125 for an individual (or .2% of annual pay), $250 for an employee and spouse or children (or .4% of annual pay), and $375 for a full family (or .6% of annual pay).

Job Security and Subcontracting

The parties agree that subcontracting and offset commitments are matters which could affect the job security of employees. Accordingly, the parties agree that at least twice a year they will meet and discuss the impact of subcontracting and offsets on planned layoffs with the intent of reducing, where possible, the impact on bargaining unit jobs. As part of the review, the company will provide an overview of its policies and plans for subcontracting and offset commitments. The union's leadership and senior company Operations managers will attend these reviews.

The company and the union agree that employees should not be laid off because of subcontracting. Employees whose work is subcontracted out will be reassigned, or retrained, for available work.

The union will be given 90 days advance notice if subcontracting would eliminate 50 or more bargaining-unit jobs in Puget Sound or Wichita; 30 or more bargaining-unit jobs in Portland or Spokane. In addition, the union can call for meetings at any other time to discuss subcontracting issues.

Job Rights

Downgrade/lateral/transfer rights will be earned in 90 days and will last for as long as seven years.

Other Provisions

The company and the union agreed to continue previous proposals on layoff benefits, dental, retirement, retiree medical and the Voluntary Investment Plan.