Members of the Machinists union Friday accepted Boeing’s contract proposal by a slim 51 percent, sealing a cliffhanger ending to a tense chapter in the history of their union, their industry and their region.
The deal passed despite a strident Vote No campaign led by the union’s local leadership. As the result was announced inside the hall a handful of men and women representing militant veterans cried openly.
The outcome means Boeing will build the 777X jetliner in Everett and its wings will be fabricated nearby by Boeing machinists.
Approval by union members also means the company abruptly terminates its wooing of other states to compete for the work.
Boeing is assured of labor peace for the next decade, and its most experienced workers will build the widebody jet it needs to fight off a challenge from Airbus.
The region’s economy is assured of high employment at Boeing for a decade to come, and likely more.
The 32,000 members of its blue-collar union, however, will give up some hard-won benefits, including the traditional pension.
With the vote, they qualify at once for a $ 10,000 bonus.
For both the Boeing employees and those at firms fueled by Boeing spending — from aerospace suppliers to restaurants and car dealerships — the bigger bonus is job security. If the vote had gone the other way, the prospect was a precipitous decline in the plane-building workforce.
Because of the advanced manufacturing technology involved in fabricating the new plane’s composite wing, Boeing employees now can look with some optimism to a future in aerospace work well beyond 2024.
Boeing’s wing mechanics will be re-trained in the advanced processes used to manufacture large structures made from carbon-fiber reinforced plastic, setting up the next generation to build future jets made from this material.
The Machinists’ decision was not reached easily.
Tom Wroblewski, International Association of Machinists (IAM) District 751 president, and his team this past week posted urgent messages couched in militant language on the local IAM website denouncing the “massive takeaways” in Boeing’s offer and calling for a rejection vote.
Their anti-contract stance was much more clear-cut than the opposition they’d offered to Boeing’s first contract extension proposal, which Machinists voted down by 2 to 1.
But his members ignored the very loud Vote No campaign, instead appearing to recognize the imminent risk of losing future jobs if they took that path.
Reassurances from Boeing’s leadership that the pensions already accrued are protected and safe may also have won over some Machinists.
Washington state political leaders expressed delight and relief.
By November, Boeing plans to begin construction of a 1.1 million-square-foot facility for building the 777X wings.
Boeing projects that just this facility, at a still-unidentified site in Washington state, will require up to $ 4 billion in new investment and will provide nearly 3,000 jobs at peak production in 2024.
News of the Machinists’ yes vote will disappoint officials in 21 other states, including such top contenders as Texas, Utah and South Carolina, who scurried to put together incentives for Boeing as they submitted formal bids for the work.
The 777X is a new version of Boeing’s highly successful 777 twin-engine widebody jet, which is built today in Everett.
Launched at the Dubai Air Show in November with record-breaking orders and committments worth more than $ 52 billion after estimated discounts, the new model is scheduled to enter service around 2020.
It will come in 400-seat and 350-seat versions and will feature new fuel-efficient engines, the largest on any airliner.
And while today’s 777 is metal except for its carbon-fiber-reinforced plastic tail, the 777X will add an advanced wing — at 114 feet, the largest ever built by Boeing — made from that same composite material.
Successfully building and selling the plane is crucial for Boeing to maintain its current dominance in the large widebody market against the rival Airbus A350, which flew for the first time in June at the Paris Air Show.
Boeing cannot afford to repeat on 777X its painful and expensive experience with the failed manufacturing plan on the 787 Dreamliner program. It needs to deliver this next airplane on time.
That business imperative convinced some Machinists that Boeing management could not dump their expertise and the existing infrastructure in Everett.
Voting at the Renton union hall Friday, Steve Averill, 57, called Boeing’s threat to pull out of Washington state “B.S.” He pointed to production problems at the 787 Dreamliner plant in South Carolina, where he said “they’re not fifth-generation airplane builders.”
“We build the best jets in the world,” said Averill, a 26-year Boeing veteran who works as a 737 repair mechanic. “If Boeing wants the best, they’ll stick with us.”
Driving away on his Harley, Averill shouted “Hell No” to other Machinists who seemed in full agreement.
But other Machinists responded to Boeing’s warnings by voting Friday to accept the offer.
Avery Madden, 30, voting at the Renton union hall, said he chose to accept Boeing’s proposal in the first vote in November and then again Friday, both times hoping to secure Boeing jobs in the region.
“I don’t ever want to gamble. I’ve got a family to take care of,” said Madden, a 737 mechanic with two years at Boeing and the father of a baby girl.
Though the latest offer froze the traditional company pension, he said, Boeing still offers good pay and benefits, including college-tuition assistance.
“I just think at my age, there’s more ways to invest in my future. I’m not stuck on pensions just to say ‘no’ to Boeing and watch them leave,” Madden said. “There aren’t a lot of jobs out there I can find that match Boeing.”
In return for its deal to build the 777X jet and fabricate its wings in Washington, Boeing has won dramatic cuts in its long-term costs.
Making demands two years ahead of the current contract’s expiration date — thereby leaving the union no option to strike if the negotiations failed — Boeing secured a deal that includes radical changes to the benefits structure that the IAM has defended for years.
The final accepted offer includes:
• A contract extension spanning eight years, from the end of the current contract in 2016 through 2024, ensuring no strikes for a full decade.
• Freezing the traditional pension for current employees and eliminating it for new hires, from 2016.
This pension will be replaced by a company-funded, defined-contribution retirement-savings account.
The company will add 10 percent of gross salary to this account for two years, 6 percent the third year and 4 percent every year thereafter.
• In addition, the company will increase its match in the separate 401(k) account that the Machinists currently have, from up to 4 percent of base pay to up to 6 percent.
• The proposal also increases employee health-care premiums and copays.
• Wages increase just 1 percent every other year, on top of an annual cost-of-living adjustment.
• All IAM members get an immediate $ 10,000 signing bonus and a separate $ 5,000 bonus mid-contract in 2020.
Nancy Stapleton, 60, voted “yes” Friday at the Machinists union hall in Renton, after voting “no” to Boeing’s initial offer in November.
Stapleton said she was encouraged that the company dropped a proposed change in the wage structure in the earlier offer that would have made new hires wait 16 years to reach the top of the pay scale instead of the 6 years it takes today.
And Stapleton said she took seriously Boeing’s threat to move 777X work out of Washington state if the Machinists had rejected the contract.
“I call this protecting our younger generation,” said Stapleton, who was accompanied by her 11-year-old grandson Noah. “There’s a lot of jobs at stake.”
Staff reporters Amy Martinez, Coral Garlick, Sanjay Bhatt, Angel Gonzalez, Kyung M. Song and Christine Clarridge contributed to this story.
Dominic Gates: 206-464-2963 or firstname.lastname@example.org