November 06, 2013
Boeing has reached a tentative agreement with the International Association of Machinists and Aerospace Workers union that, if ratified, will help clear the way for the final assembly of the Boeing 777X and its composite wing in the Puget Sound area of Washington.
The provisional agreement—which aims to secure a long-term contract extension from 2016 to 2024—is expected to be voted on by the machinists around Nov. 13. In a related development, further influence to keep the work in the Seattle area was also brought to bear on Boeing by Jay Inslee, governor of Washington, who announced a tentative deal to give up to $8 billion in tax incentives to the company through 2040.
Both moves are designed to prevent Boeing from setting up a 777X production line at alternative out-of-state sites where the company already has extensive manufacturing facilities. Leading contenders for the 777X line outside of Washington include Charleston, S.C., where the manufacturer has established a second 787 assembly line, and Long Beach, Calif., which will see production of C-17 military transport aircraft end in 2015.
The deal would also answer the much-debated question about where the 777X’s all-composite wing will be assembled. Local union officials have been concerned that the wing, which will be based on a scaled-up version of the design adopted for the stretched 787-9, could also be fabricated at a location other than Everett.
The 787’s wing is assembled in Japan and flown to Everett, while the current 777 wing is assembled locally.
Boeing’s 777X, which is widely expected to be officially launched at the Dubai air show later this month, will enter service around 2020. To be produced in two versions, the 777-8X aircraft will succeed the current 777-300ER and compete with the Airbus A350-1000, while the larger -9X variant will open up a new sector for twinjets in the 400-plus-seat market.
Although the 777X builds on many of the technologies developed for the 787, Boeing plans to retain a far greater proportion of the design and development of the 777X in-house. As a consequence, the company says it needs to find cost savings that otherwise might have been gained by out-sourcing. The negotiations with unions have therefore focused on reducing the cost base, including changes to health plans and other benefits.
The eight-year contract extension would freeze pensions for current employees and establish an alternate company-funded retirement plan. Assuming the new terms are agreed upon, all members would also receive a $10,000 bonus. The deal echoes similar negotiations between Boeing and its unions in 2011, which helped retain work on the 737 MAX at Boeing’s facility in Renton, Wash.
Last week Boeing announced that detailed design on the 777X will be carried out by company engineering teams at sites in Charleston; Huntsville, Ala.; Long Beach; Philadelphia and St. Louis. Boeing’s design center in Moscow is also scheduled to be involved in the 777X work.