Boeing machinists voting on contract tied to 777X
By MIKE BAKER | The Associated Press January 3, 2014 7:18AM
Machinists union members and supporters cheer at a rally asking members to vote against a proposed contract Thursday, Jan. 2, 2014, in Seattle. National leaders at the International Association of Machinists and Aerospace Workers recently announced a vote on Boeing's proposal despite the objections of local union leaders who had rejected the offer. The local leaders are recommending that members vote "no," in Friday's vote despite Boeing's threat that work on its new 777X airplane will go elsewhere if workers don't take the deal. (AP Photo/Elaine Thompson)
Updated: January 3, 2014 7:19AM
SEATTLE — Boeing machinists will decide Friday whether to accept a contract that would concede some pension and health care benefits in order secure assembly of the company’s new 777X airplane in Washington state.
The offer has fractured the union and drawn unusual pleas from politicians who say the deal is necessary to support the Puget Sound region’s economic future. Boeing has been exploring the prospect of building the 777X elsewhere, a move that could trigger a steady exodus of aerospace jobs from a region where Boeing was founded.
Local union officials, meanwhile, are urging their 30,000 members to oppose the deal, arguing that the proposal surrenders too much at a time of company profitability. They have opposed taking a vote at all but were overruled by national leaders in the Machinists union.
Voting will to take place from 5 a.m. to 6 p.m. Friday. Results are expected to be announced later in the night.
Washington state has always been the most natural place for Chicago-based Boeing to build the 777X, since most of the company’s production is still done in the Puget Sound area. Boeing has offered to keep the 777X in the region but sought two big deals: An extension of tax breaks all the way to 2040 and a new contract with the Machinists union that would transition workers away from traditional pensions.
In November, state lawmakers swiftly approved the tax benefits — valued at some $9 billion — but the Machinists rejected a proposed contract shortly afterward. After the initial contract rejection, Boeing immediately began soliciting bids from other states. The company said it received submissions for 54 locations in 22 states.
Boeing has improved its offer since the last vote by machinists. An initial plan to slow the rate that workers move up the pay scale was tossed while the company also offered an additional $5,000 signing bonus and improved dental coverage.
Opponents of the contract oppose the idea of freezing the pension and moving workers to a defined-contribution savings plan. They also decry increased health care expenses and slower wage growth. However, some machinists would likely see their base salaries rise above $100,000 if the deal passes.
Boeing Co. began offering the 777X in May, and company officials have said they need to move swiftly to decide where the plane will be built.
Production of Boeing’s 777X would likely bring thousands of well-paying jobs to whatever region wins the work. The plane is a new iteration of its strong-selling 777, and the company recently received orders for 225 new 777X planes from three airlines at the Dubai Airshow.
Boeing has said the 777X is expected to carry as many as 400 passengers and be more fuel efficient than the current 777.