Machinists OK Boeing offer, sealing 777X deal

SEATTLE — The Boeing Co. will build the 777X in Everett. Machinists union members approved a contract proposal on Friday that cuts benefits but ensures the new plane, and its innovative carbon-fiber wing, will be assembled in metro Puget Sound.

Members of District 751 of the International Association of Machinists and Aerospace Workers (IAM), who build planes and their components in Everett, Renton and other locations, voted throughout the day. Results were announced Friday night at the union district headquarters here.

Union officials did not disclose the tally but said members approved the contract with 51 percent voting yes.

“Our members have spoken, and having said that this is the course we’ll take,” said a visibly grim Jim Bearden, the administrative assistant for District 751, at a very brief news conference. District union officials did not want the offer put to a vote but were overruled by IAM headquarters in Upper Marlboro, Md. Bearden took no questions.

Boeing issued a statement late Friday by Commercial Airplanes President and CEO Ray Conner.

“Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter,” Conner said. “We’re proud to say that together, we’ll build the world’s next great airplane — the 777X and its new wing — right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

District 751 President Tom Wroblewski was ill Friday but issued a written statement:

“We recommended that our members reject the offer because we felt that the cost was too high, in terms of our lost pensions and the thousands of dollars in additional health care costs we’ll have to pay each year.

“It’s up to all of us now to pull together to make this airplane program successful. I’m confident we will do that, because as we’ve said all along, this is the most-skilled aerospace workforce in the world,” Wroblewski said.

Wroblewski did appear at a members-only meeting, before the announcement to journalists. The vote result was met by a couple of expletives but mostly silence, according to Machinists who were there.

“It was a complete whimper,” said Jim Levitt, a 35-year-veteran with Boeing.

One woman came out of the room in tears.

“The strategy of fear and intimidation worked,” said Wilson Ferguson, a rank-and-file union leader, referring to the veiled support for the contract by the international union and Boeing’s own campaign to sell the contract to workers.

Losing the 777X work would have had big ramifications for the area’s economy, which has long been led by aerospace.

“A yes vote guarantees Everett and the state will remain the leader in large commercial airplane production for the next half century,” said Bob Drewel, head of the Washington Aerospace Partnership and former Snohomish County executive.

The Machinists’ acceptance of the contract extension is the keystone of an all-out effort by state leaders to keep Washington’s aerospace sector intact. Last month, state lawmakers passed Boeing-friendly legislation with tax breaks worth $8.7 billion. But Boeing had said that without a revised contract with the IAM, it still was inclined to look elsewhere.

“With the work the Legislature did in November and tonight’s vote, Washington state has shown it is the only place to build this next generation jetliner,” Gov. Jay Inslee said after the union announced the result. “That legislation has important protections for taxpayers and for Machinists and we will make sure the company keeps its commitment and that these jobs remain in Washington state for the life of the airplane.”

Machinists union members waited in line for up to two hours to vote at union halls in Everett, Seattle, Renton, Auburn and Puyallup. District 751 represents about 31,000 Boeing workers in Western Washington and about 2,000 in Oregon and Kansas.

“For decades to come, the entire region will benefit from the economic activity and technological innovations that will accompany the production of the 777X and 737 MAX,” IAM national President Tom Buffenbarger said in a written statement.

As voting day approached, many workers said the vote was about jobs — either voting yes to keep jobs in Washington or voting no to protect benefits far above industry standards. Many who on Friday said they were voting no said they thought Boeing was bluffing — that it had to build the 777X in Everett.

The company had largely stayed quiet during the process, but early on it said it needed to cut costs to remain competitive in the future.

“Boeing hasn’t explained why it needs to cut costs,” said Jeremy Markley, a mechanic on the 777 line in Everett, while waiting in line to vote at the union hall near Paine Field in Everett.

After Machinists turned down a previous contract offer in November, the company began a high-profile nationwide search to find a cheap location for making the jetliner. Washington and 21 other states have submitted proposals.

But the two sides resumed talks last month. Local union leaders rejected Boeing’s “best and final” offer, but Buffenbarger forced District 751 to put it to a vote.

Boeing’s offer replaces the current contract that was to expire in 2016. The new contract will be in effect until 2024.

The agreement radically changes retirement benefits from a defined pension plan to a defined contribution plan. Workers will keep whatever they have earned in a pension but, under the new terms, earned retirement benefits will go to defined contribution plans such as 401(k)s.

The contract also increases how much employees have to pay for medical insurance, though it also improves dental coverage.

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

Most significant, Boeing promises to continue building the 737 MAX in Renton, site 777X carbon-fiber-composite wing production in metro Puget Sound and final assembly of the plane in Everett.

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

The composite wing will be “the pivot point for Boeing to be successful in coming years,” said Drewel of the Washington Aerospace Partnership.

Losing that experience would have made Washington less competitive for future commercial airplane production, he said.

And if Boeing had begun shifting away from the state, suppliers might have left as well, Drewel said. “If your customer moves away, it follows that you might move with it to keep costs down.”

Drewel wasn’t the only local leader who was relieved. Said Snohomish County Executive John Lovick: “These past few months have been challenging for everyone involved. … Now it’s time to move forward as we prepare to build the 777X and work to rebuild relationships. We have some amazing opportunities ahead of us as a county and a region. And, once again, the best aerospace workers in the world will be at the center of it all, building the finest airplanes in the skies.”

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

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