Work under way to get Boeing, union back to table

  • By Dan Catchpole Herald Writer
  • Tuesday, December 3, 2013 9:09pm
  • Business

Public officials and aerospace insiders are conducting back-channel talks with the Boeing Co. and the Machinists union to get the two sides to resume contract negotiations. At stake is production of the company’s new 777X airplane in Everett.

People involved say there isn’t much time to make something happen. States across the country have until next Tuesday to respond to a Boeing request for proposed economic incentives to build the 777X outside Washington, and Boeing has said it will make a decision by early next year.

“I think an agreement would have to come before the end of year,” said Everett Mayor Ray Stephanson, one of the officials involved in the effort to bring the two sides together.

“There’s a way to go for both parties to come to the table and resolve their differences as quickly as possible,” Stephanson said. “But we’re not there yet.”

Getting to that point could be a longshot.

“I would not say I’m optimistic,” said Alex Pietsch, the director of the governor’s aerospace office. “But I’m hopeful.”

Besides Stephanson, the would-be intermediaries include Gov. Jay Inslee, Washington Aerospace Partnership Director Bob Drewel and an airline industry heavyweight — Gerald Grinstein, a Seattleite who brought Delta Air Lines back from bankruptcy in 2007 after mending relations with employees and unions at the company.

Grinstein today is a strategic director at Madrona Venture Group in Seattle. His impressive resume and down-to-earth demeanor could put both sides at ease.

At Delta, Grinstein restored employee morale and trust in management with increased transparency and communication.

A Boeing spokesman said Tuesday that the company is not involved in talks. And executives have said they don’t plan to negotiate with the union until the current contract’s 2016 expiration nears.

But sources familiar with the behind-the-scenes effort say that company representatives haven’t closed the door on resuming them.

The company last month offered members of the International Association of Machinists and Aerospace Workers an extension to 2024, but the proposal was loaded with benefit concessions that Boeing said were necessary to cut costs. Union members who voted rejected it.

District 751, which represents some 32,000 IAM members who work for Boeing in the Northwest, is open to new negotiations, spokesman Bryan Corliss said Tuesday.

District President Tom Wroblewski told Stephanson and Inslee in a recent meeting that the union is “certainly open to talking with the Boeing Co., but it comes with the understanding that we would be building on the current contract, not tearing it apart,” Corliss said.

Union workers have said that they seem to be the only employees being asked to make sacrifices. Meanwhile, the company’s stock reached a record high this year, and industry analysts say that labor makes up a small portion of the overall cost of building large commercial airplanes.

Analysts also say it makes the most economic sense for Boeing to build the plane in Everett, where the present version of the 777 has been assembled for almost 20 years. But they caution that Boeing’s leadership has shown a real desire to look beyond Washington and has antipathy for the Machinists union. Those factors could contribute to a decision to put all or part of the 777X assembly outside the state.

This week, state lawmakers in Jefferson City, Mo., are considering a package of incentives for Boeing worth an estimated $1.7 billion. Boeing already employs about 15,000 defense workers in the St. Louis area.

Dan Catchpole: 425-339-3454;

Gerald Grinstein

Hometown: Seattle

Occupation: Strategic director and co-founder, Madrona Venture Group, Seattle

Previously: CEO of Delta Air Lines; CEO of Burlington Northern Inc.; CEO of Western Airlines; government and corporate lawyer.

Education: Yale University; Harvard Law School

Noteworthy: Credited with shepherding (2004-07) Delta Air Lines through bankruptcy and restoring employee morale there. Oversaw Burlington Northern’s acquisition of Santa Fe Pacific Corp.

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