Union Rejects Second 777X Contract Offer

By Guy Norris guy.norris@aviationweek.com
Source: AWIN First
December 13, 2013

A second attempt to negotiate a contract extension with Boeing machinists in Puget Sound, Wash., has foundered, boosting the hopes of other states around the U.S. bidding for assembly of Boeing’s 777X follow-on twinjet.

Boeing says that on Dec. 12, “in response to a proposal presented yesterday by the union to secure 777X work in the Puget Sound region, Boeing presented a best and final counterproposal. That offer was rejected by the union leadership.”

The manufacturer, which saw its first proposal rejected by the International Association of Machinists & Aerospace Workers (IAM) union last month, also reveals it has received bids from a startling 22 states, many of which submitted multiple sites for consideration. Boeing says 54 sites are now being evaluated in the run-up to a decision which is expected early in 2014.

In a statement, Boeing Commercial Airplanes President Ray Conner says, “We’ve listened to the union leadership and had an open dialogue in hopes of moving toward each other. Unfortunately the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership.”

IAM District 751 President Tom Wroblewski says despite wanting to offer the manufacturer 16 years of guaranteed industrial “peace,” the price Boeing demanded “was too high. Our senior leadership team could not recommend Boeing’s counteroffer.” However, reports from Everett indicate there also appears to be less of a united stand among the union’s rank and file over Boeing’s newest proposal, with some members believed to have requested a vote on the proposal.

Boeing initially reached a tentative agreement with the IAM on Nov. 5, which it hoped would help clear the way for assembly of the 777X and its composite wing in the Puget Sound area. However, the provisional agreement, which aimed to secure a long-term contract extension from 2016 to 2024, was voted down by the Machinists on Nov. 13, triggering Boeing’s ongoing nationwide search for an alternative site for 777X production outside of the state.

Boeing’s site requirements specify the supply of either a subsidized or “no-cost,” single, $7 billion-to-$10 billion, 4.2 million-sq.-ft. facility which would house both final assembly and wing construction under one roof, or two sites – one to house the final assembly line and the other the 114-ft.-long composite wing. Divided up, the requirement calls for a primary 3.1 million-sq.-ft. facility costing between $4 billion and $6 billion for fuselage and final assembly, and a secondary 1.1 million-sq.-ft. site for the wing costing between $2 billion and $4 billion.

The request for proposals, which was originally issued to around 15 states but has risen to 22, notes that work would begin on building the facilities in November 2014, with the aim of starting the production process in July 2016. This timeline coincides with Boeing’s schedule for the new twinjet family, which calls for detailed design in 2016 and final assembly beginning in 2017. First flight of the 777-9X is expected in 2018, with first delivery targeted for 2020.

At the recent Dubai Airshow, senior Boeing management discounted the likelihood of further attempts to return to the negotiating table with the union. But a new series of talks began around Dec. 9. This time, Boeing’s improved offer included an additional lump sum bonus of $5,000 per employee in addition to the previous $10,000 signing bonus originally offered. The revised offer also included additional benefits and retained the current rate in which employees accelerate to the top of the pay scale. Boeing adds that had the deal been agreed to, it “would have committed to placing final assembly of the 777X, as well as the fabrication and assembly of the airplane’s composite wing, at a Boeing location in the Puget Sound area.”


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