The Machinists union at Lockheed Martin Aeronautics overwhelmingly approved a new contract Saturday that will keep the stealthy F-35 joint strike fighter rolling down the milelong assembly line uninterrupted for nearly six years.
International Association of Machinists and Aerospace Workers District Lodge 776 voted 1,496 to 372 to ratify a labor agreement that will hike their wages 16 percent and locks in healthcare coverage and pension benefits for employees until April 2022.
The union represents 2,600 workers at Lockheed’s plant west of Fort Worth as well as 300 at Edwards Air Force Base in California and Patuxent River, Md. It is the largest labor group at the plant, where about 14,000 people go to work every day.
Paul Black, president of Machinists Lodge 776, said after negotiating with Lockheed for months, the deal was about as good as it was going to get. He met with his membership at the Will Rogers Auditorium for about two hours Saturday. The old contract expires Sunday.
I feel like it was the best deal to be had,
Paul Black, president of Machinists Lodge 776
“I feel like it was the best deal to be had,” Black said. “When we surveyed the membership, and in our monthly meetings, what we heard was that they wanted their healthcare choices maintained, they wanted their costs contained … and we accomplished that.”
Lockheed, which kicked off negotiations with the union early in March, is pleased that the IAM members decided to accept its last, best and final offer, said Tom Simmons, the company’s vice president and general manager for Aeronautics Operations.
“We offered an industry-leading agreement that balances the affordability demands of our customers with rewarding our excellent workforce,” Simmons said in a statement. “Our employees perform a critical task for our customers and the nation through their work supporting critical aircraft production programs.”
Reaching an agreement without a work stoppage is quite a change from four years ago, when a bitter strike lasted about 10 weeks. Pentagon officials said that they had talked “openly and frankly” about the importance of sticking with the promised production schedule.
The plant is supposed to deliver more than 50 stealth fighters this year and gear up to build 17 a month by the end of the decade. Lockheed is in the midst of a $1.2 billion plant upgrade to make that possible and plans to start hiring 1,000 additional assembly-line workers next year.
“It was pretty clear to me that the company wanted a new agreement from the beginning,” Black said when asked about the pressure from the Pentagon. “That is not to say that they were going to give up the ship. … But we were able to work through most of the issues.”
New day, new deal
Under terms of the contract, which runs until April 2022, Machinists receive a lump-sum payment, or signing bonus, of $4,000. Union workers also get a 3 percent raise this year, then 2.5 percent raises annually from 2017 to 2020, and another 3 percent in 2021.
While there are many employee classifications and pay scales in the union, the largest category is aircraft assembler, with 730 workers, according to Lockheed officials. The minimum pay earned by an assembler under the old contract was about $41,000 a year, with someone at the top of the scale earning about $73,000. The average pay for an assembler working now at the plant was $55,000.
We offered an industry-leading agreement that balances the affordability demands of our customers with rewarding our excellent workforce,
Tom Simmons, Lockheed’s vice president and general manager for Aeronautics Operations.
A handout distributed by the union’s negotiating team states the average annual income for one of its members before the new contract was $68,640, based on $33 an hour salary. By 2021, the average salary will climb to be $83,380. The union has said it takes almost 20 years for a machinist to reach the top of the pay scale.
All members would get $800-a-year cost-of-living increases, or $4,800 over the life of the contract, according to the document posted on the union website. Originally, Lockheed was not offering this supplemental pay to anyone hired after July 2016.
Labor negotiators also fought hard to keep pension benefits from being frozen as has happened at other major corporations. Under the new contract, veteran employees will earn $100 per month per year of credited service, representing a $10 increase. That amounts to an 11 percent boost, or $36,000 per year upon retirement, for those who work at the plant 30 years.
When the union went out on strike in 2012, it was unable to get new hires included in the existing pension plan. Instead, they are covered by a 401(k). In this contract, those employees can contribute $65 a week with a 60 percent match from Lockheed. The value over the life of the contract is about $36,000, according to the union handout.
The company also agreed to make quarterly payments of $43 to employees hired after 2006 for the Basic Benefit plan.
During the negotiations, union members expressed a strong interest in maintaining their healthcare choices, something Lockheed wanted to change. In the end, the union was able to preserve those choices for the veteran employees, but not for new hires.
Current employees will still be able to get their medical care from an HMO, a point of service provider or a company healthcare plan called LMHealthWorks, a plan many of the union members dislike because they say it has higher co-pays, deductibles and out-of-pocket costs.
New hires will only be eligible to be covered by LMHealthWorks, although Lockheed has agreed to pay 90 percent of the premium, up from 87 percent. To reduce expenses, Lockheed will put $250 into a fund for individuals, and $500 for families, each year.
What Lockheed got
In return, Lockheed gets a longer, more agile contract that will help it boost production of the F-35. At $379 billion, the F-35 program already has suffered ample turbulence during its development.
Still, the company wanted to change some language in the agreement, altering provisions that had been in place for years. For example, they wanted to toughen an attendance policy that allowed an employee to receive additional unscheduled time off.
In return for some of its economic concessions, Lockheed gets a longer, more agile contract that will help it in the production of the F-35. At $379 billion, the F-35 program already has suffered ample turbulence during its development.
While there is no set timetable, Lockheed also worked in the option of putting some machinists, who now all work eight hours Monday through Friday, on a work schedule where they get every other Friday off.
Under such a schedule, called a 9/80, employees work nine days and earn 80 hours over two weeks by working nine-hour days the first four days of the first week and eight hours on Friday. The second week, they work four nine-hour days and get Friday off.
About 11,000 of the Fort Worth plant’s 14,000 employees already work the 9/80 schedule, and Black said they also have the 9/80 schedule at other facilities. While the company wants to start it in Fort Worth in the first quarter of 2017, the union president isn’t convinced it will happen.
“We’re not convinced they are actually going to be able to do it here based on the nature of the business,” Black said. “They seem to think they can. Those kind of details have not been worked out yet. We don’t know what it is going to look like. We’ll work it out.”
Employees sound off
Union members expressed praise and frustration with what they had heard and were asked to ratify Saturday. Those initially leaving the Will Rogers Auditorium had glum looks on their faces, expressing concerns about the cost of insurance and the possibility of working a new schedule.
Clifford Fuller, 48, an assembler at the plant for 14 years, said he has a family of four — including a daughter with scoliosis — and he’s worried about the healthcare costs going up. He and others said that most of the raise they will receive will be eaten up in higher insurance costs.
“Everything they are giving us they are going to take it away in insurance,” Fuller said. “That is the main benefit of the company. They are selling each jet out there, at $100 million a copy, and every time we come to this point they take something. ... Every time we come to this point, I lose.”
Everything they are giving us they are going to take it away in insurance
Clifford Fuller, an assembler at Lockheed
Wesley Musselwhite, 45, voted against the contract because he doesn’t want a different work schedule.
“I don’t want to work 9/80. We’ve been fighting that forever.” said Musselwhite, an assembler at the plant for about 15 years. “They want us to vote on it when they don’t have the details worked out. You can’t put stuff past Lockheed.”
An assembler at the plant for 34 years, James Moffett, 67, said he voted against the deal because he doesn’t like the idea that new hires don’t get the same pension and benefits.
“I voted against it. I’m helping these young people,” he said.
But inside, those up on the auditorium’s stage, were happy with the outcome.
“Overall, it’s a decent contract. Could there have been some things that were better? Of course. We could always get better. But we could always get worse,” said Daniel Poole, 55, an assembler who has worked at the plant for 14 years. “The things that a lot of people are complaining about are things that you’re not going to get the company to change on, no matter how long we strike.”
Does the contract have everything in it that Black wanted? No, but it’s close.
“You always walk away thinking it could have been a little bit better ... What did I leave behind? But all in all, we’re happy with it,” Black said.
This story contains material from the Star-Telegram archives.