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Boeing Machinists in Seattle Approve Contract; No 777X in St. Louis

"Tonight, Washington state secured its future as the aerospace capital of the world."
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From: Boeing

From: Boeing

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SEATTLE (KMOX/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.

It also means that Missouri’s hopes for landing production of the aircraft — with thousands of jobs — are over.

Governor Jay Nixon released this statement:

“I want to thank the members of the General Assembly, our community colleges, and our local partners in business, labor and government for putting together a nationally-recognized proposal that made Missouri one of the finalists for production of the Boeing 777X,” Gov. Nixon said. “These efforts have demonstrated once again that with an outstanding business climate, strong schools and a highly-skilled workforce, Missouri is ready to compete in the 21st century global economy. Boeing’s recent decision to bring more than 700 research and technology jobs to St. Louis is proof positive that Missouri is a top destination for high-tech jobs and investment.  I look forward to continuing our long-standing partnership with this global aerospace leader and building on this solid foundation of growth.”

Lawmakers called into a special session by Nixon worked quickly in December to give bipartisan approval to tax incentives that could be worth up to $1.7 billion over more than two decades, depending on the number of new jobs Boeing would bring. St. Louis County also approved an incentive package, which could raise that total to about $3.5 billion.

But Boeing’s first choice was always its hometown: the Puget Sound.

The offer there fractured the union and drew unusual pleas from politicians who said the deal was necessary to support the area’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 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.

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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Associated Press writer Mike Baker in Seattle and photographer Elaine Thompson in Everett contributed to this report.

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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