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Boeing's bad year means no bonus checks for SC workers

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Dennis Muilenburg (copy) (copy)

Boeing CEO Dennis Muilenburg said he would give up his bonuses in the wake of two deadly accidents and the ongoing grounding of the aerospace giant's 737 Max planes. Boeing's non-union workers also won't be receiving bonuses this year. AP Photo/Andrew Harnik/File

Boeing CEO Dennis Muilenburg isn't the only employee at the aerospace giant who won't be getting a bonus this year — neither will most of the company's other non-union workers.

"The majority of Boeing employees, including teammates in South Carolina, operate under an incentive plan that will not payout a bonus for 2019," said company spokeswoman Libba Holland, who added that annual bonuses are not guaranteed.

"Incentives have to be earned by meeting set objectives each year," she said.

The bonus pool is dry primarily because of the fallout from two deadly crashes of 737 Max planes that Boeing builds in Washington state. The accidents — which jave grounded the planes since March — sparked criticism that federal regulators have become too cozy with the planemaker, allowing Boeing to certify most of its own work.

They also put a spotlight on other Boeing plants, including the 787 Dreamliner campus in North Charleston, which was hit with allegations that shoddy and unsafe work is being ignored to meet scheduling deadlines.

Boeing's finances have plummeted since the 737 Max crashes, with third-quarter commercial airplane sales down 21 percent, deliveries off by 67 percent and earnings 41 percent lower than the same period a year ago.

On Thursday, Southwest Airlines — the largest operator of 737 Max planes — said it reached a deal with Boeing for compensation over the model's grounding. It didn't disclose terms of the deal, but said it would share $125 million from the confidential settlement with its employees. 

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In the wake of harsh criticism from lawmakers on Capitol Hill this year, Muilenburg announced he would forgo all of his bonuses, which make up most of his annual compensation. Last year, he received a $13.1 million bonus and stock awards totaling $7.3 million.

Boeing's global sites started telling workers in October that they, too, will have to do without the bonuses many have grown accustomed to during the company's better days.

Last year, for example, Boeing workers shared in a nearly $900 million bonus pool after the company reported a record $101.1 billion in revenues, free cash flow of $13.6 billion and $16.01 in core earnings per share. The average bonus per Boeing worker for 2018 was 8.3 percent of annual pay.

Bonuses were even higher for 2017 because of a different set of criteria that were used to calculate the awards.

Boeing workers who are represented by a labor union negotiate their own bonuses and will receive them regardless of what their non-union counterparts get.

An incentive plan for West Coast Boeing workers who belong to the International Association of Machinists is based on safety, quality and productivity metrics rather than the company's financial performance. The payout for this year has not been calculated.

That can be a positive for union workers when Boeing is down, but the reverse is also true. Last year, when Boeing's non-union workers were getting an average 8.3 percent bonus, IAM workers received 5.6 percent.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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