The 31,000 local members of the International Association of Machinists (IAM) District 751 face a landmark vote Wednesday on an offer from Boeing.
Do they endorse an eight-year contract extension that significantly cuts pension and other benefits in exchange for Boeing’s commitment to build the planned 777X airliner and its advanced-technology wing in Washington state?
Or do they reject the contract as containing too many take-aways, and risk that Boeing will indeed take the 777X work elsewhere despite the difficulties of starting a new manufacturing site?
Here are some questions and answers to explain the issues as the vote looms.
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Q. What is the 777X and why is it important to Boeing?
A. Boeing will have to spend at least $3 billion to produce the 777X, a new version of its hugely popular 777, the Everett-built star of its twin-engine widebody jet lineup.
The 777X will feature new fuel-efficient General Electric engines, larger in diameter than the biggest engines today.
While today’s 777 is metal except for its carbon fiber-reinforced plastic tail, the 777X will add wings from that same composite material. This advanced wing will be the largest ever built by Boeing.
The 777X is considered crucial to maintaining Boeing’s lead in sales of big widebody jets as the rival Airbus A350 enters the market.
But Boeing cannot afford the disastrous and hugely expensive development delays and glitches that have plagued the 787 Dreamliner program. It must execute its 777X manufacturing plan smoothly.
Q. What’s at stake for Washington state in this vote?
A. The possible outcomes are stark.
If the Machinists vote to reject the contract and Boeing takes the 777X elsewhere, its massive Everett plant — the largest building by volume in the world, where the company employs approximately 39,000 people — could be half empty in just eight years.
The 747 jumbo jet, which isn’t selling well, will likely end production long before then. Production of the current 777 would end soon after 777X enters service around 2020.
That would leave in Everett only the Air Force tanker, built at a rate of only one per month, and the 787 Dreamliner — an airplane also built in South Carolina.
Such a scenario would rapidly compress the schedule for what pessimists have long predicted: Boeing’s gradual exit from Washington state.
On the other hand, if the vote is yes, Boeing says, the state will secure production of the 777X and its giant carbon-fiber wing, protecting an estimated 56,000 total jobs for two decades.
To fabricate the wing, the company will build an advanced-composites facility that represents the future of airplane manufacturing.
Boeing’s commitment with the state and its proposed commitment to the union is limited to building the 777X.
However, in a double-page ad the company placed in Tuesday’s Seattle Times, Boeing Commercial Airplanes Chief Executive Ray Conner said the 777X would offer the Puget Sound area “an open door to future new programs through access to key technologies in wing fabrication and assembly.”
Q. Is Boeing really serious about moving work elsewhere if the Machinists vote no, and would it be practical?
A. Boeing has promised massive new buildings in Washington for 777X final assembly and wing fabrication. Those buildings could be constructed anywhere else with a suitable workforce and infrastructure.
In a clear effort to sway union members on the eve of the vote, two sources close to the company said an internal Boeing analysis identified its top three alternative manufacturing sites as Long Beach, Calif.; Salt Lake City; and Huntsville, Ala.
Both sources said Boeing’s analysis ranked the Puget Sound region as the preferred option above those sites, provided the company gets the concessions it wants from the state and the Machinists union.
If not, Long Beach is favored because production of the big C-17 military cargo jet there is to end in 2015. The site has a highly skilled workforce.
And because of the looming job losses, it’s expected California Gov. Jerry Brown would come up with incentives.
Salt Lake City is an option because Utah is a nonunion state that would offer incentives. Boeing already has a composites-manufacturing center there that builds the 787’s horizontal tail, and land is available to expand its plant.
Huntsville is a center of Boeing’s space work and therefore has a skilled aerospace workforce, but presently has no airplane manufacturing. Boeing has available empty land there to set up a “greenfield” site.
That would mean Boeing establishing a new widebody-jet plant in the same incentive-happy, nonunion state where Airbus is setting up an A320 narrowbody-jet assembly plant.
Boeing South Carolina is unlikely to be chosen because that complex needs all its resources to try to get the 787 Dreamliner on track.
Conner said Monday the company is not bluffing.
If Machinists reject the offer by a narrow margin, it’s hard to believe Boeing wouldn’t come back to the table and make some small adjustments to the proposal to get a yes vote over the line.
But a big no vote could kill Washington’s 777X ambitions.
Q. What are the major elements of the proposal to be voted on?
A. In return for building the 777X jet and fabricating its wing in Washington, Boeing would get dramatic cuts in its long-term costs — and certainty that there will be no Machinist strikes through 2024.
Contributions to the employees’ traditional pension plan would end in 2016, replaced by a company-funded, defined-contribution retirement-savings account.
Employee health-care premiums and copays would increase.
New hires would progress up the pay scale much more slowly than they do with the current wage structure.
Wages would increase just 1 percent every other year, on top of an annual cost-of-living adjustment.
If the contract passes, all members will get a $10,000 signing bonus before Christmas.
Q. Has the union leadership endorsed this deal?
A. No. In secret talks with the company, the top union leadership, both local and national, agreed only to put the offer to a vote.
Since then, District 751 President Tom Wroblewski has declined to give specific direction and insisted that his members must make up their own minds.
It’s clear Wroblewski doesn’t like the terms. At a tense and emotional union meeting last week, he tore up a copy of the proposal and denounced it. However, this week he publicly stressed that the deal would bring job security.
The national IAM has barred the union’s paid local staff from speaking publicly about the offer. Behind the scenes, many of those staffers strongly oppose the deal and are advising members to vote no.
Q. Boeing seems to have more leverage over the union than it has in the past. Why?
A. During regular contract talks over the past decade, the union successfully fought off changes to the pension and other benefit cuts. This time, while the 777X gives Boeing bargaining power, the union cannot use its ultimate weapon.
Normally such dramatic changes to employment terms would be negotiated at the end of a contract, typically every four years, with the union having the power to strike if the two sides fail to agree during bargaining.
Because Boeing is pushing this deal with three years still to run on the current contract, this time the union cannot strike.
Two years after Boeing chose South Carolina over Washington for a second 787 assembly line, the union agreed in 2011 to extend its contract a year ahead of its expiration in order to win the 737 MAX for Renton.
That extension ensured no strikes through 2016, and the new offer would extend that again through 2024.
Union members complain that Boeing has now twice moved the goal posts so the union only gets to play when it cannot score.
Q. What exactly happens Wednesday, and when will we know the outcome?
A. From 5 a.m. on, before or after their work shifts, about 31,000 IAM members are eligible to vote at union halls throughout the region. About 1,500 more will vote in Portland.
Polls close at 6 p.m. The Puget Sound-area ballot boxes will be sealed and escorted to the Seattle union hall in South Park, where volunteer Machinists will count the votes.
A result is expected after 9 p.m.
Dominic Gates: (206) 464-2963 or email@example.com