Even Boeing’s union isn’t quite sure what has been gained by rejecting a new contract that asked for unpopular concessions in return for guaranteed employment for at least two more decades.
The 67% majority of the International Association of Machinists and Aerospace Workers (IAM) who voted against the eight-year agreement prompted two competing narratives.
Either the members bravely upheld the union’s core principles in a losing battle to keep Boeing in Seattle over the long-term, or shrewdly called the company’s bluff in a bid to negotiate better terms for keeping the 777X assembly where they believe it belongs.
Tom Wroblewski, the leader of IAM District 751, released a statement after the vote that is open to both interpretations. The vote re-asserts his belief, he says, that IAM represents “the best aerospace workforce in the world”. In the same rhetorical breath, however, Wroblewski now says he can only “hope” that “Boeing will not discard our skills when looking to place the 777X”.
Boeing, meanwhile, is now free to look for lower-cost assembly sites than Everett, Washington, but faces the prospect of launching a flagship product with some critical question marks that could affect the timing of the first deliveries and the pace of the production ramp-up.
Company leaders also now must manage an infuriated workforce who must be relied upon for at least another decade, no matter where ultimately the 777X is assembled.
For now, Ray Conner, president and chief executive of Boeing Commercial Airplanes, is not backing down from his threat to consider alternative to Everett if union members struck down the company’s offer.
“We’re left with no choice but to open the process competitively and pursue all options for the 777X,” Conner says in a media release.
Boeing has built aircraft in the Seattle area since it became a company in 1916. Fifty years later, the company converted an unused military airstrip at Paine Field in Everett into the world’s largest factory – originally to build the 747 and the short-lived supersonic transport project. The Everett site ultimately became the home of four widebody programmes, employing 39,000 people today.
Boeing has fought a series of battles with its unions in the Seattle area, including the Society of Professional Engineering Employees in Aerospace. (SPEEA).
In 2008, four-fifths of the IAM’s members in the Seattle voted to reject a Boeing contract, prompting a strike that lasted more than 50 days. The central issue at that time was Boeing’s outsourcing policy on the 787 programme. Ironically, the early design and production problems on the 787 provoked Boeing executives to reconsider the 787 outsourcing strategy anyway.
The company appeared to avert another potential work stoppage in 2012 by completing secret negotiations with IAM leaders in late 2011. That agreement preserved 737 Max assembly in Renton, Washington, and did not force members to vote on the controversial issue of pensions.
The existing contract does not expire until 2016, but the pending launch of the 777X programme gave Boeing an opportunity to seek new cost reductions.
The company offered to extend the agreement that expires in 2016 by another eight years and guarantee assembly of 777X in the Seattle area. But the proposal demanded that the union agree to abolish the company-funded pensions for a defined contribution plan.