UPDATE: Boeing machinists OK contract tied to 777X

By: Associated Press
By: Associated Press
Boeing machinists narrowly approved a contract Friday that would concede some pension and health care benefits in order to secure assembly of the company

Credit: Boeing

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SEATTLE (AP) -- Boeing machinists narrowly approved a contract Friday that would concede some pension and health care benefits in order to secure assembly of the company's new 777X airplane for the Puget Sound region, solidifying the aerospace giant's presence in the Seattle area for many years to come.

The offer fractured the union and drew unusual pleas from politicians who said the deal was necessary to support the area's economic future.

"We faced tremendous pressure from every source imaginable in deciding how to vote," said Jim Bearden of IAM District 751. "Politicians, the media, and others who truly had no right to get into our business were aligned against us and did their best to influence our folks' vote."

Boeing has been exploring the prospect of building the 777X elsewhere, a move that could trigger a steady exodus of aerospace jobs from the place where Boeing was founded.

"Tonight, Washington state secured its future as the aerospace capital of the world," Washington Gov. Jay Inslee said late Friday night.

Local union officials, meanwhile, urged their 30,000 members to oppose the deal, arguing that the proposal surrenders too much at a time of company profitability. They had opposed taking a vote at all but were overruled by national leaders in the Machinists union.

Tina Shrader, a Boeing worker for eight years, said she was voting no.

"I don't want to mess with my pension. I'm here for my paycheck and for my pension," Shrader said.

Bob Dennis, an inspector at Boeing for six years, said he was voting for the contract because it represented the best chance to keep the 777X jobs in Washington state.

"I don't think Boeing had to come back to the table. We forced them that way. But at the same time, I think this is our last opportunity to keep those jobs in the state," he said.

Wichita votes despite little stake in contract

Also voting Friday were some Wichita workers. The Machinists union represents about 200 Wichita Boeing workers.

District 70 President, Frank Molina, says about 50 percent of those workers cast a ballot. He says that is a bit surprising given the holidays and that there is nothing really in the contract for Wichita.

He says the vast majority voted against the contract.

He says back in November, when workers soundly defeated the initial contract proposal, 80 percent of Wichita Machinists union members voted.

Molina says he hoped for some new Boeing work for Wichita to be included in the contract that was adopted. But that's not the case.

The plan is still for Boeing to close its Wichita site. Molina said that could happen as early as March.

Molina says the bonuses many Seattle area workers will see with the newly-adopted contract do not extend to those workers in Wichita, Molina said.

Washington state a likely home

Washington state has always been the most natural place for Boeing Co. to build the 777X, since most of the company's production is still done in the Puget Sound area. Chicago-based Boeing 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.

The competition has underscored Boeing's commanding bargaining position in an economy where top-notch manufacturing jobs remain scarce and elected officials feel obligated to aggressively pursue such opportunities.

Boeing has improved its offer since the last vote by machinists. An initial plan to slow the rate that workers move up the pay scale was tossed while the company is also offering $5,000 in additional bonus money and improved dental coverage.

Opponents of the contract oppose the idea of freezing the pension and moving workers to a defined-contribution savings plan. They also decry increased health care expenses and slower wage growth. However, some machinist would likely see their base salaries rise above $100,000 if the deal passes.

Boeing began offering the 777X in May, and company officials have said they need to move swiftly to decide where the plane will be built.

Production of Boeing's 777X would likely bring thousands of well-paying jobs to whatever region wins the work. The plane is a new iteration of its strong-selling 777, and the company 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.

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