Boeing’s Machinists union went into Wednesday’s crucial 777X decision deeply divided on whether the company’s contract proposal even deserved a vote. The union’s national leaders pushed the vote through despite an emotional confrontation with local staff and officials just days earlier, according to people who were present.
Tens of thousands of jobs in the state building the planned 777X jetliner and its advanced wing were resting on that vote.
Yet after the resounding rejection of the offer, the local union leadership remains bitterly split, immensely complicating any reopening of talks with Boeing to salvage the eight-year deal.
On Thursday and Friday, two local units of the International Association of Machinists (IAM) passed votes of no confidence in District 751 President Tom Wroblewski and called for his resignation.
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In addition, several petitions to decertify the union are circulating in the Boeing plants, though these are unlikely to succeed.
Meanwhile, Boeing pulled its offer to build the 777X jet in Washington state, which must now compete for the work against states around the country.
Tom Buffenbarger, the union’s Washington, D.C.-based international president, said in an interview that he doesn’t see a way forward. Only a change of heart by the rank and file in the Puget Sound area can break the impasse, he indicated.
“I don’t know that Boeing would entertain any overtures from us. We certainly haven’t heard anything from them,” Buffenbarger said. “The members are going to have to find their way to thinking what’s important. They’ll be able to signal to their leadership that there should be talks.”
Secret talks at the union headquarters in South Park between top Boeing executives and IAM leaders began in earnest in mid-October.
The company side was led by Boeing Commercial Airplanes chief Ray Conner
and the vice president responsible for the supply chain, Stan Deal. Tim Keating, senior vice president of government affairs, was also closely involved.
The union side was led by Buffenbarger’s right-hand man, Rich Michalski.
Because the union has members in Canada as well as the U.S., its leadership is known as “the International.”
Local union president Wroblewski was also at the table and found himself the man in the middle, torn between the International and his own staff.
On Sunday, Nov. 3, the talks came close to falling apart.
In exchange for building the 777X here, Boeing had started the talks with very aggressive demands, asking more than it ever had in regular contract negotiations.
It wanted to dramatically cut its long-term costs. Executives were adamant they had to get rid of the traditional pension and also change the wage structure for new hires to hold back wage growth.
The proposal would have meant new employees, who start out with modest pay of $15 an hour, could take as long as 20 years to reach the top pay for their labor grades, currently ranging from about $33 to $43 an hour.
In talks leading up to that weekend, the union managed to persuade Boeing to increase the amount it would put into an alternative retirement-savings plan that would replace the pension, to offer an early retirement option, and to give a large signing bonus.
But on that Sunday, Boeing said it wouldn’t move further and demanded the offer be put to a vote of the membership.
“They gave us a last, best final offer,” Buffenbarger said.
That evening Michalski and Wroblewski met with about 30 of District 751’s local elected officers and paid staff, and for the first time laid out to them the terms of Boeing’s offer.
The local officials reacted angrily, saying the members would never vote for it.
Michalski argued for a vote, saying it would guarantee jobs.
Said Buffenbarger in the interview: “When the company says, ‘That’s it. No more,’ our role is to take the offer and present it to the members for a vote.”
But two-thirds of those present that evening voted against even putting the offer to the members.
“It blew up,” said a person who was briefed on the negotiations. “It was a very open question whether it would get to a vote.”
Sen. Patty Murray and Gov. Jay Inslee made calls to top company and union leaders, urging continued engagement, according to people familiar with their roles. Both had for weeks privately called for the leaders on each side to forge an agreement.
Next day, company representatives met one more time with the top union leaders and again insisted on a vote, saying Boeing otherwise would walk away and start a nationwide competition for the 777X work. Murray favored putting it to a vote rather than ending talks.
Wroblewski told Boeing he couldn’t recommend to his members that they accept the offer. But he agreed to a vote.
That Monday evening, Wroblewski again convened his local council, and again a 2-to-1 majority said the members shouldn’t be asked to vote on the offer.
“There was a lot of emotion,” said a union official who was present, and who asked for anonymity because the union threatened to dismiss any of its officers who speak about what happened.
He said he and his colleagues felt that the offer would badly undercut years of Machinists’ gains in creating middle-class, blue-collar jobs with good wages and benefits. They also felt certain the vote would fail.
Wroblewski overruled his staff.
A person close to both sides of the negotiations said that Wroblewski agreed to the vote even though he was against the offer.
“The International put a lot of pressure,” this person said. “Their thought was that … with 56,000 (direct and ancillary) jobs at stake, the concessions were not unreasonable.”
“Obviously, there was a miscalculation,” he added, referring to the rejection of the offer by union members.
A senior union official said the International “blinked.”
“They got the message from Boeing that they were very serious and that there would be significantly fewer workers,” the senior official said.
Speaking after the vote failed, Buffenbarger echoed the arguments made by Boeing executives to justify the major shift in wages and benefits that they demanded.
“Airbus is a true competitor now. They are coming after Boeing,” Buffenbarger said. “They have to bring a new airplane to market that won’t have the birthing problems of the 787 against the stiffest competition they’ve ever faced from Airbus. … Boeing was going to reach as aggressively as they could because they are in a new world.
“This was an opportunity to secure some work,” he added. “It was unusual. It was a gamble.”
Buffenbarger insisted that letting his members vote was the right decision. “Who is Tom Buffenbarger to tell them?” he said. “They have to decide in Seattle.”
However, resistance from the local union’s elected officers and staff — despite threats of termination if they publicly voiced opposition to the deal — had an immediate impact on the rank and file who voted.
Dan Swank, who works on the Everett flight line and spoke at a rally against the offer, said union officials quickly made their feelings known.
“Many of our local leadership were dead set against this and were out on the floor saying vote no,” Swank said.
Wilson Ferguson, president of the Local A unit of the union and lead speaker at that Vote No rally, said staff members spoke out “at their peril.”
“They put their jobs in jeopardy,” he said.
After the failed vote, one local staffer said, “We all feel like we have targets on our backs.”
Many local union officials believe that agreeing to Boeing’s terms would have revealed the union as weak, without any leverage.
Swank said it appeared to the rank and file that the International’s motivation in pushing the deal that would last through 2024 was to secure 10 years of dues from its members here.
Buffenbarger angrily rejected that suggestion, which is circulating widely among local union officials, saying that the last strike in 2008 cost the union about $50 million.
“Ridiculous,” Buffenbarger said. “They have never paid the kind of dues that make up a $50 million strike fund.”
(The 31,000 Local 751 members pay about $70 a month in dues and the union collected a total of $25.5 million in dues from them last year, according to the IAM federal filing.)
Leader’s stance shifts
Wroblewski’s position quickly became intensely difficult after the offer was laid out to the rank and file. Facing a barrage of criticism from hostile members at a union meeting on the Thursday before the vote, he revealed what he really thought when he tore up a copy of the offer and called it a “piece of crap.”
But by the following Monday, when he joined Conner and Inslee for the signing of the legislative incentive package for Boeing at the Museum of Flight, Wroblewski was back on a neutral message, declining to give direction on how his members should vote but adding that the deal was about jobs — which seemed to imply that accepting it might be advisable.
The International, one longtime local union official said, had “yanked his chain.”
Wroblewski has not spoken publicly since, and he declined interviews after the vote was lost and again this weekend.
His leadership “has been crushed,” said the person close to both sides of the secret talks. Yet Buffenbarger gave Wroblewski kudos for standing up to the abuse and dismissed the votes of no confidence last week.
“This union doesn’t have a provision for votes of confidence,” Buffenbarger said. He blamed the dissension on “a political faction” within the local that wants to oust Wroblewski.
And he pointed out that the window for any union decertification drive is narrow, and won’t open for District 751 until close to when the current contract ends in 2016.
Buffenbarger also raised a concern about the vote outcome. He said that the final vote tally Wednesday showed that 5,000 members hadn’t voted.
While he said he’s not alleging vote fraud, he said the absence of those votes leaves the outcome “questionable.”
“To have that big a number that didn’t vote stands out,” he said.
Is there a way forward for Washington to possibly still win the 777X with the union in such disarray?
“These are critical questions going forward,” said the person who was briefed on the negotiations. “Who’s in charge? What will the Local bear?”
“With all the animosity and the size of the vote, a deep breath is necessary,” he said. “But Boeing is pressing an aggressive timeline.”
A Boeing source said the company could decide where to locate the 777X work by year end.
Reuters reported Saturday from the United Arab Emirates, on the eve of the Dubai Air Show where the 777X program is set to be launched Sunday, that when asked about the union, Boeing’s Conner responded: “I would say the ball is in their court.”
Ferguson, the union’s Local A president, said the union must get down now to “healing and cleaning house.”
“There’s major damage and until something is done, the membership is not going to be satisfied,” Ferguson said.
Buffenbarger, in the interview, said, “I don’t know what’s going to happen” with regard to the 777X, adding that if relations with Boeing stay as they are now until the contract expires in 2016, “we’re in for a real donnybrook.”
The specter that Machinists might strike again in three years must certainly weigh on the minds of Boeing executives, and might spur an opening to fix what went wrong with the 777X deal.
But the fragile state of the union makes any move tricky.
“The basic level of trust between the Local and the International is gone,” said the person who was briefed on the negotiations. “It puts us in a difficult position to work with the company.”
Dominic Gates: 206-464-2963 or email@example.com