Future uncertain: Boeing union rejects contract changes

The future of the 777X construction in Puget Sound is thrown into question.
Ray Conner of Boeing

Ray Conner of Boeing John Stang

Machinists union leader Tom Wroblewski

Machinists union leader Tom Wroblewski John Stang

On Wednesday night Boeing's Machinists union decisively rejected contract changes which would have guaranteed that the assembly of its planned 777X airliner happened in the Puget Sound region.

"This wasn't a contract. It was a corporate shakedown," said union member Neal Jacobson, after the vote results were announced.  

Machinist Dan Kuehl said Boeing rubbed union members the wrong way by popping a brand new, non-negotiated, eight-year deal on the table when the union's current contract had almost three years left to go. "They just presented it to us and said here," said Kuehl. "We didn't think that was in good faith or honorable."

Tom Wroblewski, president of the International Association of Machinists and Aerospace Workers Local No. 751, did not speak to the press on Wednesday evening. Nor was the exact vote tally available. But rank-and file membere said the split was 67-33 percent against the proposed contract.  Local 751 has roughly 30,000 members.

Boeing will now assess its options for 777X assembly and wing construction, and Gov. Jay Inslee vowed that Washington State would continue to compete aggressively to win the work. The governor told reporters that, beginning Thursday, Boeing would invite other company sites to bid on the work.

"We are very disappointed in the outcome of the union vote," said Boeing Commercial Airlines CEO Ray Conner in a press release. "... But without the terms of this contract extension, we're left with no choice but to open the process competitively and pursue all options for the 777X."

"It's a bluff," said veteran union member Kelly Burrus, about Boeing's response to the vote. "It's bullshit. We're just asking for the same (benefits and pension set-up). We're not asking for more. Don't touch my pension. Don't touch my benefits."

In a separate statement, the Washington State Labor Council sited the hurried nature of this contract process: "Rank-and-file members of the Machinists union voted down a complex Boeing proposal before them one week ago. ... The vote is also a reflection of having to respond to the complex set of issues on one week's time — issues that will have a significant impact on the well-being of tens of thousands of family members and hundreds of thousands of community members." 

Whatever Washington's chances in an open competition, it was clear that the state had lost an opportunity to secure thousands of jobs on the new plane for years, probably decades to come. Many union members and some industry analysts have maintained that Boeing has huge incentives to keep the work in Washington, because the existing 777 work is already based in the state. 

The no vote follows a three-day special session in which the Washington Legislature handed Boeing the largest state tax break package in American history: $8.7 billion. Gov. Jay Inslee signed the bill into law on Monday. 

Robert Mak gathered reaction at the Machinists union hall.

After the union vote, Inslee praised state lawmakers and spoke up for the tax incentives package, calling it one of the big assets the state will bring to the 777X competition. "This was the right thing, a bipartisan decision," he said. "I stand by it."

The governor did not comment directly on the Machinists' decision, but allowed that when union representatives gave him the results, "I expressed the fact that we could have won" without other parts of the country having a chance to compete. "This was an unparalleled opportunity for us," he said.

But Inslee maintained a determined, confident posture. "We have strong assets that we intend to bring to this competition," he said, including including the tax incentives and transportation packages being negotiated by legislators from both parties, and what he called the best aerospace workforce in the world. "We will continue to compete morning, evening and night to win this airplane."


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Comments:

Posted Thu, Nov 14, 7:35 a.m. Inappropriate

The IAM has spoken, putting their jobs on the line as a matter of principle. There's something brave and almost noble about that, sort of like the guy standing in front of the tank in Tienanmen Square. Whatever happened to that guy, by the way? Anyone seen or heard from him?

I agree that Boeing has been very high-handed in this particular round of concessions-wrangling, both with the Legislature and the union. I also understand that Boeing has the upper hand, now that they've established a presence in South Carolina. In addition, it might be worth noting that Rick Perry has already tweeted about the right-to-work conditions and healthy economy going on in Texas right now.

This is not your parents' or grandparents' Boeing. These people knew what they were doing when they moved their corporate office to Chicago and they knew what they were doing when they opened shop in Charleston. Ever since Harry Stonecipher and the McDonnell Douglas crew effectively took over Boeing in 1997, corporate has slowly but steadily been moving their operations out of this area...these are NOT Seattle people, nor do they feel any sense of obligation to Seattle beyond how the cost of doing business here pencils out with their accountants. As soon as they can move into facilities where their labor force doesn't kill their delivery schedule by regularly going on strike, they will.

Boeing isn't bluffing and they won't blink. There are too many politicians in right-to-work states elsewhere willing to hand them what they want and they know it. It's three years until the current IAM contract ends...the real "fun" will begin in 2016.

To end this on a positive note, Charleston IS a less-expensive place to live than Seattle (check out the real estate market there) and the weather's a lot nicer in December. I'm sure they've even got a Starbucks.

Posted Thu, Nov 14, 8:48 a.m. Inappropriate

Years ago, the employees should have taken their bonuses and purchased Boeing stock so they'd have a good block of employee ownership. Instead, the union sold them down the river years ago by allowing Boeing to de-skill many of the jobs.also agree the MDD "takeover" was the beginning of the end for Boeing in Seattle. How it was allowed that an essentially failing company's (MDD at the time) management took the lead is beyond me.

Seasoned

Posted Thu, Nov 14, 7:53 a.m. Inappropriate

Our state legislators – led by the democrats – absolutely shafted the individuals and families here who will have to pay extra regressive taxes to make up for the diminished revenue that will result from the staggeringly-huge tax breaks those lawmakers handed Boeing earlier this week.

This is how democrats here have been abusing their powers for the last couple of decades – tax the poor and give huge tax breaks to rich corporations.

Why, exactly, was exempting Boeing from billions of dollars of taxes it otherwise would pay so important?

If the democrats around here were not sociopaths about imposing excessive regressive taxing this vote would terminate their calls for immediately hiking regressive taxes for transit even higher. Problem is, they will keep on trying to punish financially the individuals and families with the least means even though their rosy prognostications of day-long traffic jams everywhere aren't credible. It's all they know in terms of "governing".

crossrip

Posted Thu, Nov 14, 8:55 a.m. Inappropriate

One would assume that the concept of the 777x was leveraging the existing manufacturing setup and adding a new wing and engine.

If they are moving the manufacturing, might as well just design an all new CFRP 10 abreast aircraft.

Aside from Emirates, there is no indication that the market will embrace the 777x anymore than the 747-8 or the A380. Boeing may well be about to embark on a fool's errand.

Posted Thu, Nov 14, 9:17 a.m. Inappropriate

I believe in reality this was a no win for the IAM, either you take the contract and thus allow Boeing to return in a year with a “new” contract with worse pay and benefits, or, you say no and Boeing moves. Either way you have lost. Boeing knew this would result in a no vote. I believe they wanted the no vote so the IAM would look foolish when Boeing moved production elsewhere. Which I am sure they already have made plans for. Boeing manipulated the union and got exactly what they wanted. When you have a house payment, children to see through school and all the other goodies of “middle” America, losing these via your own hand (voting for this contract) is hard to do. One woman who voted no put it best: “Boeing will do whatever they want to do; our vote means nothing to them except as window dressing.” Unfortunately, she hit the target dead on.

Posted Thu, Nov 14, 10:27 a.m. Inappropriate

If Boeing does leave they'll have a hard time finding the necessary skills in the chosen community.

Where ever Boeing lands the locals will know that Boeing doesn't believe in family wages and benefits because the jobs are temporary, subject to the mood of management.

Djinn

Posted Thu, Nov 14, 3:15 p.m. Inappropriate

I think the leaders of Puget Sound governments should heed the lesson of Detroit and other declining Mid-West cities: diversify your economy before its too late and don't depend on one major industry.

Puget Sound has already made good progress in that direction, but leaders should now start planning for a future without Boeing, since Boeing, as a global corporation, is obviously already planning for a future without Puget Sound.

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