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Tentative Boeing labor deal has trade-off

Keywords: Tags  Boeing, IAM, labor deal, International Association of Machinists and Aerospace Workers, IAM, 777, 777X, Ray Conner Tom Wroblewski


LOS ANGELES — A tentative agreement between Boeing Co. and its largest union would ensure that production of the newest version of the 777 airliner, as well as its planned new wing, remains in the Pacific Northwest’s Puget Sound region—but it includes a big trade-off for the company’s work force.

Workers representing about 35,000 members of the International Association of Machinists and Aerospace Workers (IAM) union are due to vote Nov. 13 on a package that would extend the union’s labor agreement with the parent company’s Seattle-based Boeing Commercial Airplanes (BCA) unit into 2024, eight years beyond the current expiration of 2016.

"If this contract is ratified, new buildings totaling over one-and-a-half million square feet will be built to house the 777X final assembly and 777X wing production securing wide-body production in Everett (Wash.)," IAM District 751 president Tom Wroblewski and assistant directing business representative Robert C. Petroff said in a statement.

An IAM spokesman this week emphasized the importance of the proposed new agreement to the future of Boeing and its work force.

"The 777 is not the end of an aircraft line but the beginning of the next generation of aircraft manufacturing," he said. The wing of the 777X will be built with composites in contrast to the current version’s aluminum wing.

The 777 is considered among the largest commercial aircraft consumers of titanium, accounting for about 150,000 pounds of buy weight, including both the airframe and engines. This amount could rise with the 777X, since the new composite may contain additional titanium, which is generally more compatible with composites than aluminum, although the wing’s material makeup is yet to be finalized.

BCA president and chief executive officer Ray Conner said the contract extension would secure "thousands of high-wage, high-skilled aerospace jobs" in the Puget Sound and Portland, Ore., regions.

Moreover, Washington Gov. Jay Inslee is expected to ask the state legislature to approve a package of bills that would reportedly save Boeing about $8.7 billion and encourage the company to build the 777X and the new wing in the Seattle area.

Chicago-based Boeing, whose 777 production rate stands at 8.3 per month, has more than 80,000 employees in Washington State, a BCA spokesman in Seattle said. An IAM spokesman said about 3,000 members of the union are on the 777 line.

While IAM members would receive a $10,000 signing bonus if the contract is approved, the agreement would relinquish a feature the union has fought hard to retain in recent years. New hires would no longer have a traditional defined benefit retirement pension, but will instead have a 401(k)-type retirement plan. Moreover, while employees would retain previously accumulated defined benefits, their ongoing pensions would also be included under the new plan.

"It’s being presented to the members as a choice where Boeing is saying, ‘This considerable amount of work can be yours,’ " an IAM spokesman said. "However, it comes with a price."

Aerospace industry observers said the road to the proposed agreement probably began in 2008, with a bitter two-month strike by nearly 27,000 IAM members that was settled in November of that year. While the union at that time preserved the traditional retirement plan plus other features, Boeing emphasized that it "retained the flexibility necessary to manage its business" (amm.com, Oct. 28, 2008).

The full significance of Boeing’s intentions became clear to the union in 2009, when Boeing decided to build its next major final assembly plant in North Charleston, S.C., after the work force there voted against union representation. Boeing-South Carolina now houses one of two final assembly sites for the company’s 787 Dreamliner.

Boeing evidently made its point with the Charleston expansion. About two years ago, the company signed a new four-year agreement with the IAM that would ensure production of its top-selling 737 single-aisle airliner—including the new, re-engined 737 MAX version due to enter service in 2017—would continue in Renton, Wash. (amm.com, Dec. 9, 2011).


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