January 04, 2014
Machinists union members accepted an improved contract proposal from Boeing by the narrowest of margins on Jan. 3, guaranteeing the company’s new long-range 777X and its all-composite wings will be built in Everett and nearby facilities around the Puget Sound area of Washington state.
Of the 24,000 ballots cast, 51% were in favor of approval. The outcome ends two months of speculation over where the assembly work will take place and draws a line under Boeing’s search for alternate sites that attracted bids from 22 states as well as Japan. The vote by the majority of the 32,000 members of the International Association of Machinists (IAM) District 751 also lays the foundation for a decade of industrial peace as it extends the current contract by eight years, through 2024.
Expressing relief at the outcome, Boeing Commercial Airplanes President and CEO Ray Conner says “we’re proud to say that together, we’ll build the world’s next great airplane—the 777X and its new wing – right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.” Boeing adds that the work includes fuselage build, final assembly and the fabrication of major components such as interiors and wires.
IAM District 751 President Tom Wroblewski and his team led an ardent campaign calling for a rejection of Boeing’s offer. This ‘best and final’ contract offer was proposed on Dec. 12 but rejected by the leadership without offering members the opportunity to vote. On Dec. 21, in response to calls from some of the membership within District 751, the union’s national leaders overruled the leadership of the local branch and scheduled the vote for Jan. 3.
As well as the baseline contract extension the offer includes a 4% general wage increase over eight years, plus cost of living allowances. Members will also receive a $10,000 signing bonus with immediate effect and another $5,000 bonus in 2020. Most contentiously, the deal ends pension-plan accruals in 2016 and replaces them with a defined-contribution savings retirement plan. However it also retains the current 401(k) plan and increases the company match by 2% to 6%, as well as maintaining the system of wage progression known as “zoom.” Under this system, new hires can move to the top of their grade’s pay scale after six years.
State political leaders who in November approved up to $8.7 billion in tax breaks for Boeing in return for building the 777X aircraft at or close to its traditional locations have also expressed approval at the outcome of the vote. “Now that the state and union have delivered, it is time for Boeing to hold up its end of the bargain,” says Rep. Rick Larsen (D-Wash.) “Washington has shown that we stand behind a strong aerospace industry. Boeing should make the same commitment to our state.”
With the success of the new contract vote, Boeing is expected to start construction in November of the new 1.1 million square foot wing manufacturing site at a yet-to-be-announced location in the Puget Sound area. The site, which will require up to $4 billion in new investment and employ up to 3,000 workers, will be matched with expansion work at the current Everett site which will house the 777X final assembly line.
Boeing’s original ‘greenfield’ specification called for a 3.1 million square foot facility costing between $4 billion and $6 billion for fuselage and final assembly. However it is not known at this stage how these figures will change with the decision to locate at Everett and modify the existing facility. Production of major parts is due to start in mid-2016 with final assembly beginning in 2017. First flight of the 777-9X is expected in 2018 with first delivery targeted for 2020.