Why Boeing Workers Rejected a New Contract: Retirement Benefits

A large majority of more than 33,000 striking union members voted against a contract that included big raises but not the restoration of a frozen pension plan.

A decade ago, Boeing stopped offering the gold standard of pension plans — one that pays out guaranteed sums to retirees. The loss of the pension still angers many members of the company’s largest union.

On Wednesday, the union’s members voted by a large margin to reject an improved contract proposal from management largely because the agreement would not restore the pension. The vote will prolong a five-week strike that is frustrating the jet maker’s efforts to recover from years of crisis.

Retirement benefits have become the biggest sticking point in the impasse between Boeing and its workers after the company came close to meeting the union’s demands in other areas, including offering raises of nearly 40 percent over the life of the new four-year contract.

Retirement and labor experts say reaching a compromise on the issue could be difficult. That’s because Boeing is highly unlikely to want to shoulder the much higher cost of a traditional defined-benefit pension plan compared with the defined-contribution plans that have become standard in much of corporate America. Members of the union, the International Association of Machinists and Aerospace Workers, seem just as determined not to back down from their demands for greater retirement security.

“I believe all workers deserve a defined-benefit pension,” Jon Holden, president of District 751 of the union, which represents the vast majority of the workers, said Wednesday after 64 percent of those voting rejected the offer. “It wasn’t right to take it away, and it’s a righteous fight to try to retrieve it back.”