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 The vote of 51 percent to 49 percent to accept the deal means
Boeing Co will build its new 777X jetliner and wings in the Seattle
area, where Boeing has built aircraft for more than 90 years.
Had the workers rejected the offer, Boeing would have considered
making the successor to its popular 777 widebody jet elsewhere, and
had received offers from 22 states interested in hosting the new
factory.
"This decision means Boeing hopefully will stop pursuit of another
site for its 777X program," said a somber Jim Bearden,
administrative assistant to machinist District 751 President Tom
Wroblewski.
"They held a gun to our head and our people were afraid," said
Lester Mullen, a District 751 council delegate who works on the
current 777 wing production line.
Boeing's reaction was in stark contrast to the mood in the Seattle
union hall where the results were announced.
"The future of Boeing in the Puget Sound region has never looked
brighter," Boeing Commercial Airplanes Chief Executive Ray Conner
said in a statement. "This will put our workforce on the cutting
edge of composite technology, while sustaining thousands of local
jobs for years to come."
NO STRIKE BEFORE 2024
In clinching the agreement, Boeing secured the location favored by
analysts and investors, who saw far lower risk in using the factory
and workers who now build the 777.
Boeing also ensured that the machinists won't have an opportunity to
strike until 2024, when the new contract expires.
The decision drew praise from political leaders who had brought
pressure to bear on the union to approve the deal.
"I'm very pleased that the best place in the world to build jet
airliners for decades will continue for decades to come," said
Governor Jay Inslee in a brief media conference in the state capital
Olympia. "This has been a long road, and I respect everyone who has
worked on it, but now's the time to come together, go build this
airplane. I'm happy about that."
Addressing a concern raised by union members, Inslee said there were
safeguards in recently passed state legislation giving $8.7 billion
in incentives to Boeing and the industry to ensure the plane maker
keeps 777X jobs in Washington state and doesn't open a second line
in another state, as it did in South Carolina with the 787
Dreamliner.
After winning the incentives and the contract vote, "it is time for
Boeing to hold up its end of the bargain," said Rep. Rick Larsen,
whose congressional district includes the 777 factory. "Washington
has shown that we stand behind a strong aerospace industry. Boeing
should make the same commitment to our state."
Workers had argued that with Boeing earning healthy profits, and its
share price at a record high, it should not be demanding that its
workers give up past contract gains.
The choice Boeing offered had opened deep rifts between the local
International Association of Machinists and Aerospace Workers (IAM),
which opposed the contract, and its Washington, D.C.-based
leadership, which forced a vote on the proposal.
It had also revealed cleavages between younger workers open to the
deal and older workers dead set against it. Some 49 percent of the
machinists are 50 or older, the union said.
In November, two-thirds of machinists voted against Boeing's first
offer, which would have replaced their traditional defined-benefit
pension with a defined-contribution savings plan, one of two
retirement plans the workers receive.
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The union's national leadership negotiated that deal. But local
leaders opposed it, saying the take-aways were too great.
In the vote on Friday, members approved an eight-year contract
extension that the union said provided $1 billion in additional
benefits beyond the prior offer, but that will halt pension
contributions in 2016.
SHARP DIVISION
About 600 votes separated yes from no, union officials said. Some
members wanted a recount, but the national leaders would not allow
it, said Wilson Ferguson, vice president of District 751.
Ferguson said about 8,000 members did not vote, up from 5,000 in the
prior ballot in November. The union has about 31,000 eligible
members.
Before the vote, a member filed a complaint with the National Labor
Relations Board taking issue with the timing, just after Boeing's
traditional closure between Christmas and the New Year, when many
workers were away, the union said. The union allowed online absentee
voting.
The divide between the local leaders and their national counterparts
is mirrored by divisions over the contract that appear to cleave
along age lines.
Younger machinists had voiced strong concern that failing to vote
for the contract would cost them their jobs as Boeing moves the work
elsewhere. The 777X is the last major development on Boeing's books
for the next 15 years. If the plane was built elsewhere, it would
have slowly eroded aerospace jobs in Washington. The average wage is
$29 an hour.
Many older workers, however, had said the pension was sacred and was
worth risking job loss.
"There's plenty of aviation work in the world," said Kevin Flynn, an
aviation maintenance technician inspector, who has filed a separate
complaint against the national union leaders with the National Labor
Relations Board for holding the vote against the wishes of a
majority of members.
"I'll just have to move to where the work is."
Tom Captain, head of the global aerospace and defense practice at
Deloitte, said the difficult decision the union faced reflected the
fact that aerospace work can be moved to new locations and that
price competition between Boeing and rival plane maker Airbus is
fierce.
"Although painful, tense and emotional, it is clear that there is a
sober recognition of the new reality in commercial aerospace
manufacturing," he said.
(Reporting by Alwyn Scott and Jonathan Kaminsky;
editing by Nick Macfie)
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