Boeing and the Machinists union have reached a landmark tentative agreement to build the 737MAX in Renton, sign a new 4-year contract, and press for ending the federal NLRB case against the company.
After secret talks that began in earnest in mid-October, Boeing and the Machinists union have reached a landmark tentative agreement that would ensure the 737MAX is built in Renton and lead to settlement of the National Labor Relations Board (NLRB) case against the company.
The deal may also bring more Air Force tanker work to the Puget Sound region.
A four-year contract extension is also part of the pact, the union said at a news conference Wednesday.
Members must approve the agreement, and union leaders who’ve endorsed the contract said it will be put to a swift vote on Wednesday Dec. 7.
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“The 737 MAX has landed here in the state of Washington,” said Mark Blondin, the former president of the International Association of Machinists (IAM) local district 751 and now the IAM’s aerospace coordinator. “This is a new day, the start of a new way of doing business.”
Boeing Commercial Airplanes chief Jim Albaugh confirmed the deal in a statement.
“If our employees ratify a new agreement, building the 737 MAX in Renton will secure a long and prosperous future there, as well as at other sites in the Puget Sound area and in Portland, Ore., where 737 parts are built,” Albaugh said.
The job security provisions in the agreement also stipulate that if Boeing closes down its defense plant in Wichita, Kan. — a step it is considering — then the work of finishing the installation of military systems on the Air Force tanker will be done at Boeing’s Puget Sound area facilities.
The contract extension comes 10 months before the existing contract expires.
The union pushed to nail a contract down early to ensure that Washington state keeps final assembly of the modernized 737, which Boeing had earlier this year opened up to other locations.
For Boeing management, one impetus was securing labor peace for several years as it prepares a sharp production ramp-up.
But another key element was the NLRB case, in which the company is accused of illegally retaliating against the union when it chose South Carolina as the location of a second 787 assembly line in 2009.
The general counsel of the NLRB, and likely the Obama administration, will have to sign off on any formal settlement of the case, but the union made clear Wednesday that it will push to end the controversial case.
“If this agreement is ratified, we will engage the government in discussion and inform them that our issues with the Boeing company are behind us,” Wroblewski said.
Lafe Solomon, acting general counsel at the NLRB, issued a statement suggesting he is ready to act once the deal is finalized.
“The tentative agreement announced today between Boeing and the Machinists Union is a very significant and hopeful development,” Solomon said. “If ratified, we will be in discussions with the parties about the next steps in the process.”
Congressman Norm Dicks (D- Bremerton) said that although the NLRB case has become a hot political issue, with Republican candidates in the presidential campaign taking Boeing’s side against the federal agency, he sees no political obstacle to a settlement because Boeing’s 787 work in North Charleston, S.C., will also be secured.
“The people in South Carolina are going to be happy,” said Dicks. “They won’t object to this case going away.”
Dicks said the deal means job security in Washington state.
“I’m excited about this,” he said. “This is great for us.”
Wroblewski called the agreement “historic” and said it ensures “continuing good wage jobs” in the region. He said the language in the deal in which Boeing commits to securing jobs here is “unprecedented.”
He said it was the company that approached the union first, eager to make an early contract deal.
Wroblewski said IAM members’ success in working to fix issues on the 787 and the 747-8 and to win the Air Force tanker contract are “all things that have driven the company to come and engage with us.”
The agreement includes a $5,000 signing bonus, payable immediately upon ratification, and annual general wage increases of 2 percent. Other terms include pension increases of $2 per year of service and a new incentive plan that targets yearly bonuses from 2 to 4 percent of gross earnings, depending on performance.
Heading the secret talks on the company side were vice presidents Ray Conner, who led negotiations with the union previously and is now head of sales at Boeing Commercial Airplanes; and Rick Stephens, who heads employee relations from Boeing’s Chicago headquarters.
For the union, the key players were Rich Michalski, general vice president at the IAm’s Washington D.C. headquarters; Mark Blondin, the former local district president for the Puget Sound region who now heads the IAM’s nationwide aerospace negotiations; and Tom Wroblewski, president of local district 751.
Boeing’s leverage in the talks was its offer of the 737 MAX in Renton, which secures well-paid union jobs.
The union, for its part, had leverage through Boeing’s discomfort with the NLRB case.
That case had already resulted this summer in the release of embarrassing company documents revealing details of internal discussions in 2009 over the siting of the 787 second assembly line in South Carolina. Imminent legal rulings threatened to force the release of further internal documents, such as executive e-mails.
Dominic Gates: 206-464-2963 or email@example.com