Boeing Union Proposes Offer to Keep 777X Work in Seattle

Boeing Co. (BA)’s Machinists union offered a contract proposal to keep work on the 777X jet in the company’s Seattle commercial hub after states offered billions of dollars in incentives to host a factory for the new plane.

Terms of the proposal weren’t disclosed by the union in a statement on its website yesterday. The Machinists District 751 said it expects Boeing to respond today. The offer was made as the company and union leaders met for a second time in two days.

“We tried to craft a proposal that would meet the needs of our members, while also ensuring the long-term success of the Boeing Co. in Washington state,” said Tom Wroblewski, Machinists District 751 president, in the statement. “Our members want Boeing to be successful, and Boeing’s best chance of success for the 777X is to build it here.”

The session yesterday followed a Dec. 10 get-together that was the first since union members voted Nov. 13 to reject concessions demanded by Boeing to keep work on the 777X at its wide-body assembly plant in Everett, Washington. Dec. 10 also was Boeing’s deadline to receive bids to host a factory for the updated version of the 777 due to enter service around 2020.

“Everett is a prime location” for building the 777X, said Michel Merluzeau, managing partner at consultant G2 Solutions LLC in Kirkland, Washington. Boeing’s task is to measure competing sites “not so much in snapshot of where they are now, but what they’re going to be over next 20 years,” he said in a phone interview.

Photographer: Mike Kane/Bloomberg

A nearly completed Boeing Co. 777 reaches the end of a moving production line at the company's facility in Everett, Washington. Close

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Photographer: Mike Kane/Bloomberg

A nearly completed Boeing Co. 777 reaches the end of a moving production line at the company's facility in Everett, Washington.

Aerospace Jobs

Doug Alder, a spokesman for Chicago-based Boeing, didn’t immediately respond to an e-mail seeking comment on the Machinists union proposal.

California, North Carolina, Texas and Alabama were among the states rushing to court Boeing in hopes of winning thousands of well-paying aerospace jobs. The offers included $8.7 billion in incentives from Washington state to secure the 777X factory for the Puget Sound region.

“We continue to look at all of our options,” Alder said earlier yesterday in an e-mailed response to questions about yesterday’s meeting. “As we start evaluating the proposals, we’ll engage with all interested parties.”

The meeting included Wroblewski, union business representatives, Boeing Commercial Airplanes President Ray Conner and members of his management team, said Bryan Corliss, a union spokesman.

Boeing fell 0.9 percent to $132.56 at the close in New York yesterday as broad U.S. stock indexes declined. That pared the shares’ year-to-date gain to 76 percent, the biggest advance among 30 stocks in the Dow Jones Industrial Average.

Labor Conflicts

The planemaker will have to weigh the risk of building a new model outside an area with proven aerospace talent against the potential of fewer labor conflicts and greater savings elsewhere. The Machinists crippled commercial jet production with a 57-day strike in 2008 and a 28-day work stoppage in 2005.

The labor-management impasse could be broken if “Boeing’s perspective is that we want to make the best deal possible and we’re willing to compromise,” said Leon Grunberg, a professor of sociology at the University of Puget Sound, who co-wrote “Turbulence: Boeing and the State of American Workers and Managers.”

To contact the reporters on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net; Thomas Black in Dallas at tblack@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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