High stakes poker game between Boeing, Washington and union
Boeing has its poker face on with the 777X in the middle of the table. Will Washington and the Machinists fold?
Boeing is dangling the 777X, its composite wings, the thousands of jobs and the billions of dollars this program would mean to the state right out in front of the legislature and its union Machinists. But if they want it, they are going to have to pay for it.
Boeing is asking its Machinists for an unprecedented eight year contract that would ensure labor peace through 2024. The deal includes a massive change to the retirement plan that would end the current pension system. It also includes increases in monthly healthcare costs.
“Today, we are at a crossroads,” the IAM letter to its members reads. “Together we must choose what is best as a union, as individuals and as a family.”
Boeing also wants the state to come up with a transportation improvement package, fewer restrictions on permitting and the extension of current tax breaks through 2040, in exchange for building the plane in this state.
Gov. Jay Inslee has called a special session of the Legislature beginning Thursday, Nov. 7, to approve that legislative package.
Inslee said he wants lawmakers to approve the package in one week.
“If we can do this in the next seven days, we can be certain that Washington’s aerospace future will be as bright as its past,” said Inslee said at a news conference in Olympia.
That might be a very tall order because the legislature has been haggling over the transportation package for eight months.
The transportation package will cost about $10 billion over ten years, and it will likely include a gas tax increase of to $0.10. That’s something voters will also likely have to weigh-in on. So every voter will get a chance to decide if keeping the 777X in Washington is important to them.
Inslee says not approving the incentives would cost the state billions of dollars and thousands of jobs.
“So the only thing that’s going to cost the state of Washington is if we do not produce a bi-partisan package to make sure that we get this airplane in this state.”
According to the governor’s office, the aerospace industry in Washington generated $76 billion in economic activity last year. The 777 generated $20 billion in economic activity and supports 56,000 jobs.
A news release from the International Association of Machinists and Aerospace Workers (IAM) District 751 says members will vote on the proposal by Boeing that would guarantee the 777X wings and fuselage will be built in the Puget Sound region.
“Securing the Boeing 777X for the Puget Sound means much more than job security for thousands of IAM members,” said District 751 Directing Business Representative Tom Wroblewski. “It means decades of economic activity for the region and will anchor the next generation of wide-body aircraft production right here in its historic birthplace and will complement the 737 MAX narrow body.”
The agreement would pay all workers a $10,000 signing bonus in exchange for extending a new contract through 2024, but it also would spell the end of the current pension plan and include higher healthcare costs.
“Only a project as significant as the 777X and the jobs it will bring to this region warrants consideration of the terms contained in Boeing’s proposal,” said Wroblewski. “While not all will agree with the proposal’s merits, we believe this is a debate and a decision that ultimately belongs to the members themselves.”
The effort is similar to successful negotiations that led to a landmark extension of the union’s contract with Boeing two years ago. That led the company to agree to build the new 737 MAX in Renton.
So what are the Machinists going to do? Aviation analyst Scott Hamilton put it this way, “It’s better to have 50-percent or 80-percent of something than 100 percent of nothing.”
Hamilton expects the union to swallow this bitter pill and take the deal. We’ll find out next Wednesday when the ballots are counted.
Report by MyNorthwest.com’s Josh Kerns and KIRO Radio’s Chris Sullivan