Jobs on the line as Boeing Machinists vote

  • By Dan Catchpole Herald Writer
  • Thursday, January 2, 2014 8:39pm
  • Business

SEATTLE — Jobs. That’s what Machinists union members say is at stake Friday as they vote to accept or reject the latest contract proposal from the Boeing Co.

And whether they’re voting for or against it, no one seems to like the choices.

Those who plan to vote yes say they’re voting to keep jobs in metro Puget Sound — accept benefit cuts or be out of a job.

Machinists who plan to vote no say they’re voting to protect well-paying jobs from corporate extortion.

“Boeing is giving us a take-it-or-leave-it ultimatum,” Machinist Shannon Ryker said at a vote-no rally Thursday at the Seattle headquarters of District 751 of the International Association of Machinists and Aerospace Workers (IAM). “That gives us no choice but to say no!”

Several hundred union members and supporters cheered and chanted, “Vote no!”

Boeing’s offer would replace the current contract that ends in 2016 and wouldn’t expire until 2024.

It would radically change retirement benefits from a defined pension plan to a defined contribution plan. Workers would keep whatever they had earned in a pension, but under the new terms earned retirement benefits would go to defined contribution plans such as 401(k)s.

The offer also would increase how much employees have to pay for medical insurance, though it also improves dental coverage.

And Boeing’s offer includes two lump-sum payments — one at the beginning of the contract and a second in 2020 — worth a combined $15,000.

Most significant, if Machinists approve the contract, Boeing promises to continue building the 737 MAX in Renton. And it promises to site wing production and final assembly of the new 777X airplane in metro Puget Sound.

The 777X is a planned new variant of the venerable widebody that has been built at Paine Field in Everett for almost 20 years.

Machinists and community members have hotly debated the contract on news websites and in social media forums. While vote-no proponents have been louder, Friday’s result likely will be closer than one in November, when union members who cast votes rejected a similar offer by a 2-to-1 margin.

That previous offer would have extended the service time required to reach the top pay rate. The current proposal keeps the existing pay progression, which allows many to max out in as few as six years.

Boeing has made few public comments about either offer, but it has said it needs to cut labor costs to stay competitive in coming years.

That argument has failed to persuade many Machinists, who point to the company’s soaring stock price, huge profits and an historic backlog of airplane orders.

“If it was bad times, I could understand it, but it isn’t,” Paul Richards, a mechanic on the 777 line in Everett, said at Thursday’s vote-no rally.

Labor costs only account for 4 percent to 8 percent of production costs for large commercial airplanes, according to aerospace industry analysts.

But the Chicago-based company could have a different endgame, said Scott Hamilton, an analyst with the Issaquah-based Leeham Co.

Boeing CEO Jim McNerney’s dislike of unions is well known.

“Industry logic, economic logic, commonsense logic — everything says build the plane here,” Hamilton said of Everett. “In essence, it’s a battle to the death with the union, and Boeing intends to win that battle.”

The contract also has pitted the union’s international leaders against local union leaders, who last month officially rejected Boeing’s new offer.

The IAM’s national office in Upper Marlboro, Md., ordered District 751 to put the contract to a vote Friday. Leaders here are cooperating. Voting will be conducted at District 751’s union halls around metro Puget Sound, including the one in Everett near Paine Field. Union officials expect to announce final results Friday evening.

Local union officials are recommending that members reject the offer.

“You need to look at the facts of the economic destruction you would have to live under for the next 11 years, without any opportunity to change any provisions of the contract,” district leaders wrote to members on Dec. 23.

The union’s international office is not endorsing a yes vote, but it characterizes the offer as attractive.

“I believe this represents a ‘significant’ improvement worthy of the membership’s consideration,” wrote Thomas Buffenbarger, the international IAM president, on Dec. 26.

Local politicians have pushed members to vote to accept. Their motivation? “Jobs, jobs, jobs,” Snohomish County Executive John Lovick said in an interview last month.

He joined other local politicians Monday at a press conference, again urging union members to vote yes.

The local leaders said that Boeing executives told them that if the contract isn’t approved, the 777X’s wing won’t be built here.

A company spokesman would neither deny nor confirm the comment. But since the first contract offer was rejected Nov. 13, the company has been exploring potentially cheaper locations in 21 other states at which to build the 777X and the new carbon-fiber-composite wing.

Many Machinists say they think the company is bluffing.

“To get the (777X line) up and running, you need to build it here,” Richards said.

Analysts widely agree that Everett is the only place with the workforce and infrastructure to get the plane to customers on the timeline Boeing has announced.

But calling Boeing’s bluff is a big gamble.

“I have no reason to believe that the company’s bluffing at all,” said Trevor Harris, who works on the 747 line in Everett.

The 37-year-old and his wife have five children.

“I believe my job hangs in the balance,” Harris said.

Said Hamilton, the analyst: “Even if the 777X is built here in its entirety, we’re going to have to go through this all over again when Boeing goes to replace the 757 and 737” in the coming decade. “Winning the 777X is no guarantee that any airplane will be built here in the future.”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com.

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