Boeing, Machinists union in talks over 777X

Reuters and The Seattle Times are reporting that the Boeing Co. and the International Association of Machinists and Aerospace Workers (IAM) are in until-now-secret talks to extend the IAM contract, place final assembly of the 777X in Everett and do carbon-fiber-composite wing fabrication elsewhere in the Puget Sound region (Fredrickson?).

If true, this is huge. The fear that the high cost of labor in Washington might prompt Boeing to do this work somewhere like North Charleston, S.C., has been freaking out state leaders for months.

If a deal happens, there is precedent, as you probably know. A similar deal in 2011 assured 737 Max final assembly in Renton.

“The talks are aimed at a multi-year extension to the existing machinists’ contract expiring in 2016, said one source familiar with the talks,” Reuters says. “Another source said the contract would run until the middle of next decade.

“Under the deal being discussed, machinists could receive a bonus payment if the talks result in an agreement approved by the IAM membership, one of the sources said. However, Boeing has warned union leaders that it will open talks with other potential locations if the discussions break down, the source added.”

Reuters was unable to get the company or the union to comment, but The Seattle Times says a state official has confirmed the talks. Alex Pietsch, director of the governor’s aerospace office, told the Times: “We’re aware negotiations are happening. We are hopeful the parties can come to an agreement.”

Adds the Times: “One person said Tom Buffenbarger, national head of the International Assocation of Machinists (IAM), was in Seattle last week for the talks. Ray Conner, head of Boeing Commercial Airplanes, is leading the management side of the negotiations.”

If you are feeling whiplashed, it’s no wonder. Last week, Boeing said it would distribute 777X engineering among six sites — and perhaps Everett. And aerospace analysts have been proffering scenarios that put 777X final assembly almost anywhere but Everett.

The formal announcement of the 777X program’s launch is expected at the Dubai Air Show Nov. 17-21. The plane will be a major makeover. While the fuselage will be aluminum like the original model built today at Paine Field, the wings are to be made of carbon-fiber composite material, among other improvements.

Nothing says Boeing has to settle all the design and manufacturing plans before the formal program announcement in Dubai, of course, but those kinds of decisions are no longer trivial to airline buyers of a new jetliner after the debacle of the 787 program.

To cite just one data point, the vaunted business friendliness of South Carolina might be indisputable, but the actual productivity of the line there is disputable. By now Boeing had hoped North Charleston would be producing three airplanes a month, but the actual rate is 1.5 per month.

If Boeing wants to ensure the 777X can be built efficiently, or even at all, it has to be thinking of ways to avoid building another factory from scratch somewhere else. For Boeing, talking to the IAM is a no-brainer. For Washington aerospace boosters, it is a happy surprise.

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