Contract Extension Proposal Questions and Answers

Updated December 2nd – 3pm

General Questions and Answers

Q1: How did this come about?
Q2: Why didn’t you announce this?
Q3: What does this “contract extension” mean?
Q4: Why is the union leadership recommending this contract extension?
Q5: Who was involved in these discussions?
Q6: What happens if this gets voted down?
Q7: When where and how do we vote?
Q8: How will we be notified of the results?
Q9: If we have further questions, who should we talk to?

Q10: What happened to all the other provisions of the contract?
Q11: When will the Ratification Bonus be paid by?

Incentive Plan

Q12: What is this new incentive plan?

Health and Benefits
Q13: When do the co-pays, premiums, wellness go into effect?
Q14: There is now a monthly premium added for the Traditional Medical Plan, why is that?

Q15: What is the 10% escalation factor?

Q16: What improved in Health Care Benefits?
Q17: What is formulary vs. non formulary?
Q18: What is the member pay the difference on prescriptions?

Q19: What is the deal with the Wellness Program?

Q20: What about the Cadillac Tax?
Q21: What about Retiree Medical premiums?

 

New Joint Union/Boeing Council

Q22: What is it?
Q23: What is the meaning of “ability to utilize non-Boeing labor for certain types of work”?

 

Job Security

Q24: How can we be confident the 737 MAX will be built here?

Q25: What other Job Security is there in the proposal?

Q26: What is the Supplier Warranty Work piece?

 

Misc. Questions

Q27: If I am on a leave, can I still vote?

Q28: If I’m on a leave of absence do I qualify for the ratification bonus?
Q29: What happened to the Holidays (Independence day, Memorial day and Labor day 2012? – NEW
Q30: The Incentive plan language refers to attachment B, where is attachment B?
- NEW
Q31: The wellness plan seems to be an invasion of my privacy, how can the Company require us to take this wellness assessment?
– NEW
Q32: What happened to Education benefits?
- NEW

 

 

 

 

General Questions and Answers

 

Q1: How did this come about?

A: As you know, we meet regularly with Boeing executives. As a result of these meetings, Company executives approached us to ask if we could discuss next year’s negotiations. We agreed to listen to what they had to say, to see if we could come to an agreement on a proposal to put forth to the membership for a vote.

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Q2: Why didn’t you announce this?

A: We all know what happens when outside influences get involved in our business. Whether it be politicians, the media or the general public at large, the public discussion about our Boeing contract talks muddies the water and makes it hard to take care of the business at hand. So, this time, we decided to see if we could just talk about the issues important to both sides and to see where the talks would lead.
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Q3: What does this “contract extension” mean?

A: Should you vote to accept it, the current contract and all the provisions in it will be extended -- with negotiated modifications in several key areas, like compensation, benefits and job security.

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Q4: Why is the union leadership recommending this contract extension?

A: Because our job is to negotiate fair and equitable contracts for you, our membership and when we believe we have an offer that does just that, we will always recommend it.

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Q5: Who was involved in these discussions?

A: As soon as we determined that Boeing was willing to talk particulars about a contract extension, we brought in all our experienced negotiators from various committees to meet with the Company’s representatives. The discussions for the IAM were lead by GVP Rich Michalski, Aerospace Coordinator Mark Blondin, District President Tom Wroblewski for 751, Assisting Directing Business Rep Rob Petroff for W24 and District 70 District President Steve Rooney.

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Q6: What happens if this gets voted down?

A: In the short term – nothing. The contract between the IAM and Boeing will remain in place, and we will start all over in 2012 to negotiate a contract through our normal process. Keep in mind that could very well jeopardize our securing the 737MAX for this region. However, we believe that we were able to address the issues you identified in the survey with this proposal while preserving a future for you and other members at Boeing for many years to come. We trust you and the rest of our membership will see this package as a good thing and vote to accept it.

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Q7: When where and how do we vote?

A: How – Members in good standing will be sent an “eligibility card,” which will go in the mail Friday.

When - On next Wednesday, December 7th, members will be able to stop by any Puget Sound Union Hall and cast a ballot to either accept or reject. There is no strike vote this time.

Where – Our Union Halls in Auburn, Everett, Renton and Seattle will be open from 5 a.m. until 6 p.m. Fredrickson site will be voting at Pierce County Skills Center

16117 Canyon Rd. E., Puyallup, WA  98375 (enter parking lot off of 160th)

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Q8: How will we be notified of the results?

A: We’ll post results on our Web site (www.IAM751.org), send them to home e-mail addresses and distribute them via our social media sites, like Facebook and Twitter. We’ll also work to get the results out through the news media.

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Q9: If we have further questions, who should we talk to?

A: You’ll receive a summary of the proposed contract extension online and copies will be available at Union Halls. Union Representatives will be briefed on what all the changes are and what they mean as soon as possible. If you have specific questions, write them down and get them to your Business Rep so he/she can get you answers.

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Q10: What happened to all the other provisions of the contract?

A: This is a contract extension. Any language currently there remains unless otherwise mentioned in our synopsis of changes.

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Q11: When will the Ratification Bonus be paid by?
A: Although the Company initially committed to pay the ratification within 30 days, we pressed as a show of good faith if they could get it to our members before the holidays. The Company has indicated to us that they will be able to pay it on December 15th the normal pay day for our members should they ratify the extension on Wednesday.

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Incentive Plan

 

Q12: What is this new incentive plan?

A: It is similar and modeled after the IAM/Boeing plan St Louis has which has paid out almost every year. It will be jointly developed and administered with fine tuning by the IAM and Boeing through a joint committee. The basic parameters are already established and measured on three basic principles for the entire bargaining unit, Productivity, Lost Work Days Case Rate and Quality. The Target is set at 2% but has the potential of 4% of gross wages, however it also has the potential of $0 if identified targets are not met. Based on the average wage of our membership being $59,000/yr, there is a potential of $1,100 (2%) to $2,360 (4%) payout. If our members worked a lot of overtime during the plan year, the potential payout would be even greater. If this joint committee doesn’t establish all the details of a transparent plan and subsequently it doesn’t get implemented by July 2012, there is a guaranteed payout of 2% each year until such time as a plan is established. 

 

In addition, if after implementation Boeing terminates the Incentive Plan for any reason prior to Sept. 8, 2016, eligible employees will receive a 2% lump sum payment for each performance period that includes or is after the termination date of the Incentive Plan and precedes the termination of this Agreement.

Again, this plan is modeled after the plan in the IAM/Boeing contract in St. Louis. Below is the average yearly payout since 2000; again it is based on the individual members’ earnings and amounts vary depending on pay, overtime, etc.

 

Keep in mind , St. Louis wages are a little lower in comparison to our bargaining unit here.

 

History of St Louis plan payouts:

2000 payout: $1280

2001 payout:  $1365

2002 payout:  $886

2003 payout:  $1093

2004 payout:  $1256

2005 payout:  $1508

2006 payout:  $1503

2007 payout:  $1499

2008 payout:  $1209

2009 payout:  $1141

2010 payout:  $1727

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Health and Benefits

 

Q13: When do the co-pays, premiums, wellness go into effect?

A: Premiums - Over a year from ratification (Jan 2013) (i.e. 20/40/60 on TMP)

Co-pay increases – Over a year from ratification (Jan 2013)

Wellness Program – Over a year from ratification (Jan 2013)

Note - Members will have a chance to choose what plan they want to be in during open enrollment (November 2012) before different premiums take affect.

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Q14: There is now a monthly premium added for the Traditional Medical Plan, why is that?

 

A: The Company told us what their top needs were and we told them what our top needs were. One of Boeing’s “must haves” was sharing of ever increasing health care costs. Our members have had access to a zero-out-of-pocket premium plan for years. That’s largely due to strike action settlements, which resulted in “back to book” benefits, which meant we held on to no premiums for one plan, but also meant there haven’t been any improvements in benefit levels for 10 years. This proposal increases benefit levels in some areas and also increases out-of-pocket costs in other areas. Currently the company states they are paying on average over $16,000 per year per member to provide health care benefits. Our member’s share of that number was roughly 8 percent, taking into account deductibles, co-insurance, etc. As part of the overall package, Boeing said it needed us to pay more of our health care costs if it was even going to consider job security commitments.  So there was give and take on that.

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Q15: What is the 10% escalation factor?

 

A: Beginning in 2014, there will be an additional health care escalation factor added to whatever you individually are paying in the form of a premium rate. For example: If you are single and in the Traditional Medical Plan paying $20 per month, beginning in 2014 you will then be paying $22 per month. As you know Health Care costs have been going up every year and having this costs-sharing escalation factor is something the Company insisted on as a trade-off for our job security language. This still means that Boeing will have had to eat the costs of increases in 2012, because our monthly premium contribution would not go into effect until 2013.

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Q16: What improved in Health Care Benefits? - Revised

A: Increased Vision coverage for contacts to $120 (was $105) increase coverage for frames to $90 (was $70), Dental coverage increased to $2,000/yr (was $1,750), Class I (preventative care) increased to 100% coverage (used to be 70% to 90% depending on whether or not you got your teeth cleaned every year). Class II increased to 80% coverage (was 70%), Class III increased to 60% coverage (was 50%). Revised – Hearing aid benefit increased to $800 (was $600)

 

NOTE: CORRECTION: There is no change at all to the prepaid dental. Everything remains as current language. Original summary noted $10 co-pay and co-pay varies were incorrect.
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Q17: What is formulary vs. non formulary?

A: Doctors often have several drugs to choose from when treating a medical condition. They are classified into 3 groups:  generic, brand formulary and brand non-formulary, Generally, non-formulary drugs are those “exotic” drugs, the “latest and greatest” drug that just hit the market and you see advertised on TV allot. They are often the most expensive because the pharmaceutical company has to recoup their development costs and pay for the advertising. That’s why they cost you more. .. Formularies are name brand drugs that have been around for awhile but are still protected by their patent.  Formulary drugs are effective and cost you less when a generic is not yet available.

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Q18: What is the member pay the difference on prescriptions?

 

A: Currently members are using “generic” drugs at the rate of 74% when all others are at 97% usage. Brand name drugs are much more expensive than their generic substitute thus driving up the cost of health care. Much of this is due to lack of knowledge of what is available or due to the Doctor prescribing a certain name brand drug not knowing there is a generic available. Name brand drugs are priced by the pharmaceutical company and they can charge whatever they want for it. Name brand drugs go through a patent protection period (usually 20 years), but once that protection is lost, other pharmaceutical companies can produce the drug and make it available at a much lower cost. The pharmaceutical company doesn’t send out a bulletin necessarily telling the doctors when a generic is available, so the doctor often continues to prescribe what they become used to  instead of a less expensive but equally effective generic drug. So, this “member pay the difference” language says basically we need more people to ask for the “generic equivalent” when getting a prescription. If there is no generic available, then the name brand is covered at the normal co-pay rate.

 

Good example – Lipitor is a name brand formulary drug whose patent just expired yesterday, Nov. 30. As a result, today there are generics available which takes the cost of each pill dramatically lower.

 

If members are adamant about wanting the name brand drug when there is a suitable and effective generic available, they will now have to pay the generic copay plus the difference between the cost of the name brand and what the generic would have cost.

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Q19: What is the deal with the Wellness Program?

 

A: In an effort to help reduce the rising costs of health care, the Company has asked us to help promote the use of the wellness program assessment questionnaire.  Studies show that if you are aware of your health status it can help to reduce preventable diseases such as diabetes and heart disease (the silent killer), which ultimately reduces the need for costly prescription drugs.  

First off, be assured that we have negotiated the right to work with the Company to ensure the “required” assessment questions are more pertinent to health related questions rather than what is your income, do you ride a motorcycle, or smoke? (as is in the current questionnaire).

 

As you may already know, it is currently being offered at Boeing to take voluntarily with a $50 gift card incentive. 

 

What it means to you?

 

In 2013, if you choose to participate, it will result in no additional increase to your monthly premium. We highly encourage you to participate because:

1)      You only have to answer the “required” health related questions (agreed upon by the Company and the Union)

2)      You do not have to know the answers to your health questions. You can guess (there is no wrong answer)

3)      You will not be required to do follow up screenings or take phone calls from a health coach (only if you choose to).

Bottom line, all you have to do is answer the required questions. There are protections in place that no one will be held accountable for wrong or no answers. Once you do the survey, the third-party wellness group Boeing contracts with will notify Boeing that you qualify for no additional premium, but they are not allowed to share ANY of your personal data with Boeing. Also the Company is not legally allowed to know how you answered the questions (per HIPPA laws).

 

Keep in mind, the Joint Committee on Cost and Quality (IAM/Boeing) will be jointly revamping the online survey from where it is today. The goal for the company is a healthier workforce which will result in significant savings in health care costs overall. The goal for the IAM is to protect our members’ privacy, ensure proper security of information is in place, questions being asked are pertinent to wellness within reason and easy enough to avoid any additional charges. Yes, it would be great to have healthier members and it will save lives, but we are there to ensure the information is as secure as possible and will not be used for inappropriate reasons.

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Q20: What about the Cadillac Tax?

A: We, our members will pay nothing on any "Cadillac tax". The Company only would be responsible for that and only IF it got so high to the threshold of 27,500/yr for a family in 2018. $10,200 for individual not including vision, dental etc. Boeing is not even close. Those thresholds also increase every year.

 

This is on them (the Company), not us. But we will be working with the company through the Joint Committee on Cost and Quality (IAM/Boeing) to reduce costs so the company never gets to that threshold so they don't later complain about a need to "share" those costs too.

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Q21: What about Retiree Medical premiums?
A: Retiree medical premiums will remain unchanged from where they are today.

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New Joint Union/Boeing Council

 

Q22: What is it?

A: This will be a committee made up of the highest level of Company and Union leaders, including top Boeing vice presidents from Longacres and Chicago, and senior IAM leaders from both the International and District 751. The committee will meet on a monthly basis to address concerns at the highest level – something that’s never been done before.

 

The goal is to keep the communications lines open so that leaders on both sides can focus on problems quickly and get them resolved.

We believe that, over time, this will foster a better working relationship between the Company and the Union.

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Q23: What is the meaning of “ability to utilize non-Boeing labor for certain types of work”?


A: There is a situation where a vendor would have a proprietary process or patented system where only they and their respective employees would have the ability to do a certain process on Boeing property. That is all this particular piece is referencing. Relates to less than 10 people currently.

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Job Security

 

Q24: How can we be confident the 737 MAX will be built here?

 

A: The Machinists, through this process landed a commitment for the 737MAX to be built in Renton. In this agreement, the Boeing Co. clearly states that “with approval of the contract extension, the Company will produce the 737NG models and 737 MAX models in Renton.” That’s a commitment in writing. If that’s not enough, the company has made public announcements, issued news releases and basically told the world where the plane is going to be built -- in Renton. It also has made public statements that it will make significant capital investments to support the 737 program in Renton soon after ratification.

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Q25: What other Job Security is there in the proposal?

 

A: A commitment that the supporting shops for the 737MAX will be in Puget Sound, doing the same kind of work they now do for the 737NG. The contract says “(737) fabrication work currently being performed…will be continued in their current and existing facilities in Puget Sound and Portland…”

 

In addition, Tanker work “will be performed in the Company’s current and existing facilities in Puget Sound,” in the event the Company decides to place Tanker work now done in Wichita someplace other than Wichita

P-8 Production Work “will continue” in Puget Sound.

And as for, Everett Wide Body work, Boeing says it “intends to continue production of wide body airplanes in its Everett facilities”.

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Q26: What is the Supplier Warranty Work piece?

 

A: Boeing suppliers have hired a bunch of people to do what is called “warranty work” on the 787 in Everett. Those suppliers hired workers through a company called PlaneTechs to fix the mistakes their own workers made. Members have complained that these PlaneTechs workers should not be doing this work, but Boeing’s suppliers have always had the ability to bring in their own people to fix their mistakes. What’s different this time is that the suppliers have hired one company to do all the warranty work, instead of sending their own people.

 

In any case, Company has committed to reducing the amount of workers from PlaneTechs to a minimal number by June 2013.

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Miscellaneous


Q27: If I am on a leave, can I still vote?
A: Yes at any of the voting locations as long as your membership status is up to date.
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Q28: If I’m on a leave of absence do I qualify for the ratification bonus?
A: Only if the leave is less than 90 days. Or military leave per 6.6(b).

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Q29: What happened to the Holidays (Independence day, Memorial day and Labor day 2012? - NEW

A: Nothing. They are captured in our current contract up to September 2012. This would be a contract extension so the remaining holidays after September 2012 would be captured in this extension.
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Q30: The Incentive plan language refers to attachment B, where is attachment B?- NEW

A: Attachment B is currently in draft. It is up to the Joint Committee IAM/Boeing to finalize this document to include the transparency, measurable and deliverable targets. Although its modeled after the St. Louis program, there is still some minor tweaking that needs to be accomplished jointly to fit this Corporate wide agreement. Keep in mind, if the Joint Committee do not agree and subsequently a plan is not implemented by July 2012, there is an automatic guaranteed 2% lump sum of gross earnings paid until a plan is implemented.
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Q31: The wellness plan seems to be an invasion of my privacy, how can the Company require us to take this wellness assessment? - NEW

A: The Company cannot require you to participate in this program. It is voluntary. Although there is an additional premium should you choose not to take the assessment beginning in 2013. However, through the Joint Committee on Cost and Quality (IAM/Boeing), we have reserved the right to make changes from the current wellness assessment you would see if you went to it today through Total Access. There are many questions on it currently we will be removing or modifying because they are not pertinent to the goal. The committee will also be making changes to the terms and conditions of this program as the current terms and conditions are absolutely unacceptable in protecting our member’s privacy. This was the mutual understanding at the table.

The IAM’s goal of that committee is to make it as easy as possible and as secure as possible while still meeting the goals of the wellness initiative.
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Q32: What happened to Education benefits?- NEW
A: Nothing, they remain fully in tact. This is another positive under this contract extension. While others have lost their education benefits or are severely limited, we were able to preserve these through this contract extension.
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More Q and A’s to come as we receive feedback from members.