c.2014 New York Times News Service
c.2014 New York Times News Service
After Boeing’s workers in Washington state voted down an eight-year contract extension in November, Boeing wasted little time in soliciting offers from other states to build its new 777X aircraft.
Within weeks, 22 states made proposals to Boeing, with some offering billions of dollars in subsidies to lure a project that would mean thousands of jobs and the prestige of having such a prominent manufacturer.
All this so alarmed the leaders of the main union representing Boeing workers, the International Association of Machinists, that its president has brushed aside the objections of the local union and ordered a new vote — scheduled for Friday — on a slightly revised version of the contract extension.
The dispute highlights a rift within the union, one that reflects the varying priorities of its leadership. Union officials in Washington state want to preserve gains hard won from a company that has surging profits and record plane orders. But the international leadership sees a different threat — the possibility of losing a large manufacturing center and more than 10,000 union jobs to a right-to-work state where it would be difficult to win representation. And that could mean a big loss in dues — Boeing workers in the Puget Sound area paid $25.5 million in dues to the international union in 2012.
Boeing has promised to put final assembly of the 777X in the Seattle area, as well as fabrication of the aircraft’s wings, if the 31,000 Boeing machinists vote to approve the revised deal.
But that is by no means a sure thing. The president of the international union, R. Thomas Buffenbarger, defied union leaders in the Puget Sound area by ordering the new vote, and those leaders are urging Boeing workers to once again vote down the extension, which calls for numerous concessions.
In a message to Boeing workers in the Puget Sound area, Thomas Wroblewski, president of Machinists Union District Lodge 751, which is based there, said, “Because of the massive takeaways, the union is adamantly recommending members reject this offer.”
Wroblewski has asserted that the revised deal is not different enough from the previous deal — which was rejected 67 to 33 percent — to warrant a new vote. District 751’s leaders oppose Boeing’s demand that the machinists approve a deal that would freeze their pensions in favor of less generous, riskier 401(k) plans. District 751’s leaders also voice dismay that the deal would increase out-of-pocket health spending and includes raises totaling just 4 percent over eight years
If the machinists reject the revised deal, Boeing will continue its search on where to locate assembly of the 777X. The 777 is a long-range, twin-aisle aircraft that carries about 365 passengers. The 777X, which Boeing hopes to begin delivering by 2020, would be about one-fifth more fuel-efficient and carry up to 400 passengers.
Washington state, where the 777 is assembled, has promised Boeing $8.7 billion in tax breaks through 2040 if it puts the final assembly of the 777X in the state.
Some workers resent being asked to approve a deal filled with concessions when Boeing has record profits and a record backlog of $400 billion in orders. And those objections have grown since Boeing’s board decided two weeks ago to raise the company’s dividend about 50 percent and approve a $10 billion stock buyback.
“The optics of this are not good,” said Richard L. Aboulafia, an aerospace analyst with the Teal Group in Fairfax Va. “Boeing couldn’t have timed this any worse from a negotiating standpoint.”
Many Boeing workers complain that the parent union has scheduled the vote for Friday, when many will still be on vacation for the holiday season. Many machinists also say they are not being given enough time to study and discuss the revised proposal — the new vote was announced four days before Christmas.
Frank Larkin, communications director for the machinists’ parent union, said it was vital to hold the vote soon. “The timing was driven largely by Boeing’s attempt to announce in early January its plans for where it will place assembly of the 777X.”
On Dec. 26, Buffenbarger, the international’s president, sent a letter to the 31,000 workers eligible to vote, praising the revised deal, without specifically urging a yes vote.
“The total value of the new improvements to the contract offer adds more than $1 billion to the previous offer,” he wrote. “I believe this represents a significant improvement worthy of the membership’s consideration.”
Buffenbarger said the revised deal added a $5,000 one-time payment, payable in January 2020, on top of the $10,000 bonus Boeing had previously promised upon ratification. In the biggest revision, the new proposal would preserve the current six-year “progression” it takes for new workers to reach full pay. In the first deal, that would have taken 16 years.
Doug Alder, a spokesman for Boeing Commercial Airplanes, said, “The terms of Boeing’s enhanced contract offer, which include placing final assembly and wing build of the 777X in Puget Sound, stand.”
On their website, District 751’s leaders have posted a detailed explanation of what they say is wrong with the revised contract extension, which would be added onto the contract that expires in 2016. One objection is that the extension calls for a 1 percent raise every other year during the eight-year extension.
“It’s a bridge too far; it’s asking too much from us,” said Wilson Ferguson, president of the Local A unit of District 751. “The problem is that it seems that our international union is complicit and working with the company to push this thing through.”
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District 751’s leaders say it makes irrefutable business sense for Boeing to put 777X assembly in Washington state, largely because there is so much manufacturing expertise and experience there. As a result, they see little justification for far-reaching concessions.
“There’s an overwhelmingly strong argument for keeping this project in Puget Sound,” Aboulafia said. “Boeing would have to be willing to inflict a lot of damage to itself to leave.”
The Seattle Times obtained a copy of the request for proposals that Boeing sent to other states. It said total investment to build the 777X could reach $10 billion. District 751 officials note that the Puget Sound area already has most of the needed facilities as well as trained workers and a proven supplier network.
Ferguson asserted that W. James McNerney Jr., Boeing’s chief executive, is so anti-union that he might decide to place 777X production outside Washington state even though, in Ferguson’s view, it would end up costing the company more and delaying production.
“I’d call it corporate suicide if Boeing moves this elsewhere,” Ferguson said.
Boeing officials have long been dismayed with the militancy of the Puget Sound machinists; they have gone on strike against Boeing five times since 1977, including a costly 58-day walkout in 2008.
Jake Rosenfeld, a labor relations specialist at the University of Washington, said he admired District 751’s toughness, although he said the fight to retain pensions had generally been lost across corporate America.
“The international union will say the local is too dug in, too focused on local issues,” he said. “The international will say we have a broader perspective on these issues, ‘We fought our fight and this is the best we could get here.’”