Boeing to Give $600 Million in Bonuses; Union Employees Will Get Double Last Year’s; and None of it Has to Do with the Tax Cuts

By Sahid Fawaz

Boeing employees in Washington, especially union employees, got some great news today.

The Seattle Times reports:

“Boeing employees across Washington state will receive bonuses totaling nearly $600 million in the coming weeks, the largest annual bonus payout in company history.

The total includes payouts to white-collar employees, Machinists on the factory floor and managers, but not executives.

Boeing’s nearly 66,000 current employees in the state will be eligible for the bonuses. More than 6,000 more who worked at least part of last year before leaving the company will get a partial bonus, prorated according to how long they worked last year.

A year ago, based on 2016 performance, white-collar employees in the state received a total of $170 million, while Machinists were paid a total of $63 million in bonuses. The figure for managers was not separately released.

The larger bonuses this year are a result of a blockbuster 2017, when Boeing made a profit of $8.2 billion, up from $4.9 billion a year earlier, and employees delivered a record number of commercial airplanes and reached new productivity highs.

“This just shows us that when we all work together, we can’t be beat,” said Kevin McAllister, chief executive of Boeing Commercial Airplanes, in a statement. “When we all work to drive safety, quality, flow and productivity, we all share in the value.”

The white-collar bonuses are based on a weighted average formula that measures the company’s financial performance against a preset target for three metrics: revenue (25 percent), core earnings per share (25 percent) and free cash flow (50 percent).

In 2017, the financial performance came in 87 percent above the set target. The result is unconnected to the tax windfall Boeing received from the cut in corporate taxes passed in December . . .

Members of Boeing’s engineering union, the Society of Professional Engineering Employees in Aerospace (SPEEA), will receive a bonus equal to 18.7 days of extra pay, or 7.2 percent of their annual salary including overtime pay, roughly double what they received last year, according to SPEEA spokesman Bill Dugovich . . .

SPEEA data shows that the average annual salary for a Boeing engineer, without overtime, is $132,000, which would provide a bonus of $9,500.

The data shows the average annual salary for a Boeing technical staffer, without overtime, is about $100,000, which would provide a bonus of $7,200.

In addition, Boeing and the union mutually agreed to adjust upward the 2018 salary increases for engineers beyond what the SPEEA contract requires, so that they get a bigger raise rather than a one-off lump sum . . .

Members of the International Association of Machinists (IAM) union at Boeing have a separate incentive plan that’s based on metrics assessing quality, productivity and safety.

Based on their performance, Machinists will receive a bonus equal to 5.5 percent of their annual earnings last year including overtime, just shy of the 6 percent maximum payout allowed under the IAM contract.

That’s more than double last year’s bonus, which was 2.6 percent of annual earnings.”

For the rest of the story, check out the full article at the Seattle Times here.

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