Los Angeles Times
SEATTLE — By the slimmest of margins, aerospace giant Boeing Co.’s largest union approved a controversial contract proposal that cut benefits in exchange for decades of work in Puget Sound on a new jetliner.
It is the second time in two months that the union voted on a proposal by Boeing, the biggest private employer in the state with about 82,500 employees and a crucial part of the regional economy. Even though the local union leadership flatly turned the proposal down in December, the union’s national leadership scheduled the Friday vote.
After the union voted down the deal the first time, the company opened a nationwide sweepstakes to find a potential home for the program. Boeing said it has received incentive-laden proposals from 22 states, including California, in case the union deal didn’t come through.
“We faced tremendous pressure from every source imaginable influencing how to vote today,” said the union local’s chief of staff Jim Bearden at a press conference. “The politicians, the media and others — who truly had no right to get into our business — were aligned against us and did their best to influence our peoples’ vote.”
This contrasted starkly with IAM International President Tom Buffenbarger, who lauded the deal, saying: “Despite individual differences, I believe this vote preserves thousands of good-paying IAM jobs, while assuring the success of the 777X program.”
Moving the assembly line out of the Puget Sound area would have been staggering to the Seattle area, where Boeing was founded in 1916. It is estimated that the 777X would be responsible for 10,000 jobs.
The new aircraft would be the latest version of the twin-aisle 777, one of Boeing’s best-selling models. Versions of the plane have been built in Washington since the early 1990s.
“For Boeing, it’s a long, long campaign to effectively neuter the IAM. If the contract is passed, the IAM can’t potentially strike until 2024,” said Scott Hamilton, an aviation industry consultant and managing director of Leeham Co. in Issaquah, Wash., before the vote. “Boeing will come back to the union when the next airplanes are ready for launch and do this all over again: offer a contract extension, reduced terms and conditions, in exchange for building the airplane here.”
The labor dispute drew attention of Southern California lawmakers still reeling from Boeing’s decision in September that it would close the C-17 Globemaster III cargo jet plant in Long Beach in 2015. The plant was talked about being a potential home for the 777X program.
“Obviously, California would have loved to bring the 777X program home,” said Assemblyman Al Muratsuchi, D-Torrance, chairman of the Assembly’s Select Committee on Aerospace. “But we’ll continue to reach out to Boeing to try and bring manufacturing jobs to Long Beach.”
The union hall closest to Boeing’s biggest manufacturing operation swarmed with activity Friday afternoon, as hundreds of machinist union members queued up to vote on the aerospace giant’s latest contract.
The line of would-be voters snaked through the union hall parking lot in the chilly afternoon as clouds massed overhead. Volunteers in orange vests tried to direct foot and vehicle traffic. Police cars with swirling lights stood by, along with at least one television satellite truck.
Although Friday’s voting followed an angry anti-contract rally a day earlier, and the Everett voting site was decked with signs urging union members to vote no, the machinists were clearly not of one mind.
Those who had voted yes were loath to broadcast that fact.
Neal Jacobson, an inspector on the 787 in Everett, said: “We’re gonna take it in the tailbone.”
Jacobson, 61, comes from a three-generation Boeing family. His father, who has since died, retired from Boeing in 1989. His brother works for Boeing. So does his son.
When asked how he cast his ballot, he looked briefly stricken. Finally, he leaned in and whispered: “I voted for it. I’m not proud of that.”
The eight-year contract, which begins in 2016, will cut some pension and healthcare benefits.
In addition, conventional pension plans for newly hired machinists will be converted to a 401(k)-type of retirement program. Boeing will contribute 10 percent the first year, 10 percent the second, 6 percent the third and 4 percent for each year up to the end of the contract.
For the new vote, Boeing said it sweetened its offer with an additional lump-sum signing bonus of $5,000 for each union member in 2020. That is on top of the previously offered $10,000 bonus. Employees also will receive additional dental benefits, the company said.
Last month, Boeing increased the company’s regular quarterly dividend by about 50 percent to 73 cents per share.
The move was seen as inconsiderate by some union members.
The 777X, is seen as vital to the company’s fortunes in the long-haul market for decades to come.
This had appealed to California politicians who aim to woo Boeing by boasting its work force’s decades-long experience building large aircraft in Long Beach.
Boeing has already moved some jobs from the Seattle area to Long Beach.
Boeing said last year that 300 engineering support jobs would come to the region and that a new engineering design center for commercial aircraft would be established.
But Boeing also has a manufacturing union in Long Beach: United Aerospace Workers Local 148.