8/22/2014

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Boeing

Boeing: No more negotiating with machinists union until 2016

Boeing: No more negotiating with machinists union until 2016
SEATTLE - The Boeing Co. said Thursday it will not negotiate with the machinists union regarding a new labor contract until prior to the current contract expiration in 2016.

The aerospace giant made the announcement after machinists in the Puget Sound region voted late Wednesday to reject a contract proposal that would have exchanged concessions for decades of secure jobs building Boeing's next generation 777 plane.

Members of The International Association of Machinists District 751 rejected the proposal with 67 percent of the votes. Union members who called for a no vote did so in protest of Boeing's push to end a traditional pension plan and increase their health care costs. Workers would have received a $10,000 signing bonus if they approved the deal.

In response to the "no" vote, the Boeing Co. said it will begin a bid process to find a home for its 777X production line. That process got under way Thursday. A spokesman for Utah Gov. Gary Herbert said Boeing officials called him to begin talks that could bring the work - and thousands of jobs - to that state.

Michael Sullivan said Gov. Herbert received a call from Boeing officials Thursday afternoon and has begun preliminary discussions with Boeing leaders on the 777X line.

Boeing has had operations in Utah for 25 years, and is getting close to opening a new 850,000- square-foot factory in a Salt Lake City suburb. The company employs 575 people and is expecting to hire 100 more at the new West Jordan factory.

Boeing Co. spokesman Doug Alder declined to specify where the company is now looking, saying there is no short list and that there are many places both within Boeing's current operations and outside that are being explored.

"Everything is back on the table," he said. He also added that Boeing is not interested in opening negotiations with machinists over the contract.

"There are no plans to re-engage with the union regarding contract negotiations until prior to the current contract expiration," Alder said.

Boeing has helped anchor western Washington state's economy for decades, but that relationship began to fray about 15 years ago. In 2001, the company moved its headquarters from Seattle to Chicago.

In 2003, Washington state lawmakers approved a broad package of tax breaks for Boeing in hopes of securing long-term work on the company's new 787 airplane. While that plane is being built in the Puget Sound, Boeing has since developed a new production line in South Carolina and placed wing production in Japan.

Alex Pietsch, who serves as Gov. Jay Inslee's leader on aerospace issues, said Thursday he now expects fresh competition for the 777X line from places like South Carolina, Texas, southern California, Utah, Alabama and Georgia.

"This is arguably the most significant prize in commercial aviation history," Pietsch said.

The governor's office is hopeful that Boeing and the machinists can come back together in the near future to explore a potential compromise - perhaps when both sides have had a chance to cool down from the recent contract battle, Pietsch said.

The long-range, twin-aisle 777 holds about 365 passengers, making it Boeing's second-biggest plane. Since its first flight in 1994, it's been a best-seller for Boeing, which has sold more 777s than any of its other current large planes.

In May, it began offering the revamped 777X. Boeing is still finalizing plans for the plane, but it has said it is expected to carry as many as 400 passengers and to be 20 percent more fuel efficient than the current 777.

Instead of the current all-aluminum wing, the 777X wing is expected to be made from composites, the same high-tech plastic that makes up most of Boeing's new 787. Boeing is aiming to deliver the first 777X by the end of this decade.

The 777X is meant to compete with the new Airbus A350, which is undergoing flight testing now. It's also going to compete with Boeing's slightly larger 747-8 Intercontinental, which has seen sluggish sales even before the 777X has been formally launched.
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