Machinists accept contract offer; land Boeing's 777Xon January 3, 2014 @ 7:32 am (Updated: 11:09 pm - 1/3/14 )
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Boeing released a statement Friday night:
Under the terms of the eight-year contract extension, the 777X and its composite wing will be built in the Puget Sound area by Boeing employees represented by the IAM. This work includes fuselage build, final assembly and major components fabrication such as interiors and wires.
"Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter," said Boeing Commercial Airplanes President and CEO Ray Conner. "We're proud to say that together, we'll build the world's next great airplane-the 777X and its new wing - right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come."
"Tonight, Washington state secured its future as the aerospace capital of the world," Governor Jay Inslee tweeted moments after the announcement.
Inslee acknowledged the issue was difficult for union members, and said he wanted to thank "each machinist, no matter how they voted."
The offer has fractured the union and drawn unusual pleas from politicians who say the deal is necessary to support the Puget Sound region's economic future. Boeing has been exploring the prospect of building the 777X elsewhere, a move that could trigger a steady exodus of aerospace jobs from a region where Boeing was founded.
Local union officials spent weeks urging their 30,000 members to oppose the deal, arguing that the proposal surrenders too much at a time of company profitability. They have opposed taking a vote at all but were overruled by national leaders in the Machinists union. A Boeing worker at the Everett plant Friday told KIRO Radio's Tim Haeck he thinks the division between the local union and international is hurting the union.
"I think that the union leadership has been divided and has sent the wrong message. I think the division between the international and the local is detrimental to the union itself. I figure with the amount of money I pay every month for my union dues that I would see stronger leadership on both the local and the national level."
One worker in line voting yes said he believes Boeing will move the work elsewhere with a no vote.
"They threatened it before, and they moved the 787 to South Carolina. I know [Boeing CEO Jim] McNerney is very anti-union and he'd like nothing better than to break up this union. So moving all the work away from here would definitely affect this union."
Another worker voting no says that Boeing would be the one hurting if they moved the 777X work away from the Northwest.
"I think the company is really into threats. You get what you pay for. Look at South Carolina. They've hired people non-union that don't have the skills required to build the airplane."
Washington state has always been the most natural place for Boeing to build the 777X, since most of the company's production is still done in the Puget Sound area. Boeing has offered to keep the 777X in the region but sought two big deals: An extension of tax breaks all the way to 2040 and a new contract with the Machinists union that would transition workers away from traditional pensions.
In November, state lawmakers swiftly approved the tax benefits, valued at some $9 billion, but the Machinists rejected a proposed contract shortly afterward. After the initial contract rejection, Boeing immediately began soliciting bids from other states. The company said it received submissions for 54 locations in 22 states. Boeing improved its offer the second time around. An initial plan to slow the rate that workers move up the pay scale was tossed while the company also offered an additional $5,000 signing bonus and improved dental coverage.
Opponents of the contract opposed the idea of freezing the pension and moving workers to a defined-contribution savings plan. They also decried increased health care expenses and slower wage growth.
Boeing Co. began offering the 777X in May, and company officials have said they need to move swiftly to decide where the plane will be built.
Boeing recently received orders for 225 new 777X planes from three airlines at the Dubai Airshow.
Boeing has said the 777X is expected to carry as many as 400 passengers and be more fuel efficient than the current 777.
The Associated Press contributed to this report.
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