The Machinists union on Wednesday overwhelmingly rejected a labor contract with Boeing to ensure work on the 777X jet stays in Washington state. The vote was 67 percent against the eight-year labor agreement.
Boeing Commercial Airplanes immediately made good on its promise to look elsewhere if the labor agreement failed.
“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,” the Chicago-based aerospace giant said in a statement shortly after the results were announced around midnight Eastern time.
The International Association of Machinists lauded the vote’s outcome.
“We preserved something sacred by rejecting the Boeing proposal,” said IAM leader Tom Wroblewski, almost a week after he reportedly tore up a copy of the contract proposal at the end of a union meeting in Seattle.
“We’ve held on to our pensions, and that’s big,” he said in a written statement after cancelling a scheduled press conference following the vote. “At a time when financial planners are talking about a ‘retirement crisis’ in America, we have preserved a tool that will help our members retire with more comfort and dignity.”
Wroblewski also said he hoped Boeing would not overlook the union’s skills when it decides where to build the 777X.
Washington Gov. Jay Inslee, who signed legislation Monday to provide Boeing with $8.7 billion in tax breaks through 2040 if it builds the new airplane in the Puget Sound area, was disappointed with the outcome but said Boeing ensured him the Evergreen State is not out of the running.
“We could have won this without any competition. We didn’t even win it before the race started. Now ... the game is afoot,” Inslee said in a press conference following the vote. “(Today) the competition starts, and we intend to be there when the bell goes off.” The union’s rejection does not mean production on the new aircraft will automatically come to South Carolina, one of the states mentioned as a possible alternative.
A report in The Seattle Times cited an internal analysis by Boeing that shows the Palmetto State is not among the top three contenders.
Though the plane-making company is amassing more land near its 787 Dreamliner campus at Charleston International Airport for an undisclosed use, the Seattle newspaper said leading candidates include Long Beach, Calif.; Salt Lake City, Utah; and Huntsville, Ala.
Long Beach has a skilled workforce where the C-17 cargo jet is made, but the plant will be mothballed in 2015, leaving it open for a possible new use.
A Boeing facility in Salt Lake City makes horizontal stabilizer parts for the 787-9 Dreamliner. Huntsville doesn’t make airplanes for Boeing, but it heavily supports the company’s aerospace ventures.
“Boeing South Carolina is unlikely to be chosen because that complex needs all its resources to try to get the 787 Dreamliner on track,” the newspaper said.
Hints that the nonunionized plant in North Charleston was not in the running came out last week when local and state officials disclosed that no one in the Palmetto State has been talking incentives for Boeing to land the 777X project in North Charleston.
State Senate Finance Chairman Hugh Leatherman, who controls the state’s money flow to a great degree and was heavily involved in previous deals to lure Boeing to South Carolina, said no one from the company has approached him seeking inducements for the new plane work. If Boeing comes calling, the state stands ready, he said.
Boeing’s top official reiterated the company’s stance Wednesday to look outside the state of Washington to produce its next generation of wide-body jets if the 31,000-member union in the Pacific Northwest killed the labor agreement.
Speaking at a lecture at the University of Montana, Boeing CEO Jim McNerney said, “We will consider other alternatives if the vote goes negatively,” KING-TV station reported.
The eight-year contract called for union concessions on pension and health care benefits, but it offered members a $10,000 signing bonus and other carrots to accept the deal. The agreement would have ensured no strikes through 2024. The current contract expires in 2016.
Washington’s governor hoped Boeing and the union will meet again soon at the bargaining table.
“Ultimately, we will ask the parties to continue talking for some resolution on the agreement,” Inslee said.
Boeing South Carolina top executive Jack Jones would not comment Tuesday during a ground-breaking ceremony for a new jet-propulsion plant in North Charleston on the Palmetto State’s prospects of landing work for the 777X except to say some of the detailed design work will be done locally.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.