LOS ANGELES For the second time, Boeing Co. and its largest union have failed to reach agreement on a new contract that would keep final assembly of the latest version of its 777 airliner in the Pacific Northwest, as the company also begins realignment of its research and development unit that will result in jobs shifting from the West Coast to the Southeast.
Chicago-based Boeing and the International Association of Machinists and Aerospace Workers (IAM) met this past week to try to resolve differences over a contract extension that would keep final assembly of the new 777X, as well as production of its new composite wing, in the Puget Sound area.
"Unfortunately, the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership," Ray Conner, president and chief executive officer of the companys Seattle-based Boeing Commercial Airplanes unit, said in a statement.
"The price Boeing demanded was too high," Tom Wroblewski, president of IAM District 751, said in a statement. "Our senior leadership team could not recommend Boeings counteroffer."
IAM members, unwilling to accept major concessions to pensions and other benefits, last month rejected an initial company proposal by a two-to-one margin (amm.com, Nov. 15). The unions offer this past week was met with a counterproposal by Boeing, which was turned down by the IAM, according to Boeing.
Failure of the latest Boeing-IAM negotiations is widely expected to heighten the already-stiff competition among several states for the 777X final assembly and wing plants (amm.com, Nov. 25).
Boeing also pointed out that acceptance of its proposal would have extended an earlier agreement with the IAM, committing final assembly of the companys new version of the 737 airliner, the 737 MAX, to its existing final assembly site of Renton, Wash., from 2016 to 2024.
In another development that will result in work shifting away from its traditional West Coast production locations, the company is realigning its Boeing Research & Technology unit in a move it estimates will cut 1,000 to 1,500 jobs on the West Coast and add 900 to 1,200 jobs in other parts of the country.
Boeing said it is establishing research centers in Huntsville, Ala., North Charleston, S.C., southern California, St. Louis and Seattle. The South Carolina site, which is also located close to its new assembly line for the 787 Dreamliner, will specialize in manufacturing technology while the Seattle center will focus on manufacturing technology integration.
About 550 to 800 engineers and technicians represented by Boeings largest white-collar union, the Society of Professional Engineering Employees in Aerospace (SPEEA), could be affected by the reductions in the Puget Sound area over the next two years, said a SPEEA spokesman in Tukwila, Wash.
"We are talking to the company and monitoring the situation," the spokesman said. "Well watch how this unfolds and address any concerns our members have along the way, including how this movement of work affects their wages and benefits."