Aviation guru Steven Udvar-Hazy raised the specter of another hard-nosed confrontation between Boeing and its unions when the company gets serious about a replacement for its out-of-production 757.
If aviation guru Steven Udvar-Hazy is already thinking about where Boeing might build its next plane, you can bet the company is, too.
The aircraft-leasing veteran raised the specter of another hard-nosed confrontation between the company and its unions when Boeing gets serious about a replacement for its out-of-production 757.
“There has to be a cost-effective way of building that next-generation aircraft in that middle market,” he said in an interview at the annual U.S. conference of the International Society of Transport Aircraft Trading (ISTAT) in Phoenix, Ariz.
“So either Boeing has to come to some kind of long-term solution with the unions in Puget Sound, or they’ll have to look at alternate places. That’s a decision Boeing has to sort out with its workforce.”
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In January 2014, Machinists union members narrowly passed a contract that gave up their traditional pensions and extended their contract through 2024 in order to secure production of the 777X widebody jet for the region. The bitterness of that fight is still fresh for many in the union.
Yet Udvar-Hazy, chief executive of Air Lease Corp. and a longtime advisor to Boeing on its airplane development programs, raised the specter of another such labor battle sometime between 2018 and 2020 when he was asked about the latest airplane concept Boeing is exploring: a plane or family of planes that would replace the 757 single-aisle jet, carrying 180 to 240 passengers and fitting between the 737 single-aisle family and the 787 Dreamliner widebody family.
Boeing is in the early stages of studying the market for such a jet. It could be a single-aisle or a twin-aisle or a family that includes both. If it’s launched, it is unlikely to be sooner than 2018.
“The labor costs associated with building a new airplane of that category is going to be a significant part of the equation that Boeing will have to consider,” Udvar-Hazy added.
He said the current International Association of Machinists (IAM) contract through 2024 doesn’t extend far enough to cover the early production years of the future jet.
The 737, built in Renton, will celebrate its 50th anniversary in 2017, he pointed out.
“So you’ve got to take a really long-term view of the production run on this next plane,” Udvar-Hazy said. “We’re talking about an airplane that will come out in ‘24, ‘25 or ‘26. We’re talking roughly a 10-year horizon and it would have a production run of 35 or 40 years.”
On the conference stage, Udvar-Hazy cited Texas, Oklahoma, South Carolina and Alabama as possible rival locations for production of the 757 replacement.
“There’s lots of alternatives,” he reiterated in the interview afterward, then added Kentucky as another possibility.