Boeing, IAM submit proposal on 777X assembly for vote

Washington DC
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Leaders of Boeing’s largest union agreed to send members a proposal to keep assembly of the 777X and the new carbonfibre composite wing in Washington state in exchange for a package of concessions on retirement benefits.

The proposal must still be ratified by a majority vote of the Boeing chapter of the International Association of Machnists and Aerospace Workers (IAM).

Meanwhile, Washington Governor Jay Inslee has called a special session of the state legislature to quickly approve a package of major incentives, including an extension of tax incentives for commercial aircraft production, workforce training programmes and infrastructure investments.

If both the union membership and state legislators come through, Boeing will guarantee that the wings and the fuselage of the 777X will be built in the Puget Sound area and sign a new eight-year labour pact with the IAM.

Union leaders emphasised the importance of securing the 777X for the Puget Sound workforce, but acknowledged that the concessions demanded by Boeing will be difficult for all members to accept.

“While not all will agree with the proposal’s merits, but we believe this is a debate and a decision that ultimately belongs to the members themselves,” Tom Wroblewski, the IAM District 751 business representative, says in a media release.

The 777X, however, “warrants consideration” of Boeing’s terms, he adds.

Boeing demands that the IAM agree to cease pension accruals for current employees and create an alternative to the company-funded retirement plan. Such 401(k) plans, in which employees contribute a portion of their earnings to pre-tax retirement plans, are common in American businesses, but have been bitterly resisted by Boeing’s unions.

In return, Boeing has agreed to pay all members a $10,000 signing bonus within 30 days of ratification, the union says.

The IAM members must weigh the retirement concessions against the prospect of sending 777X manufacturing – along with 10,000 direct jobs – to another location, and away from the home of Boeing’s widebody aircraft production for more than 45 years.

Boeing appears to have taken steps to develop alternative sites for 777X production. The company is seeking to acquire more than 260 acres of land adjacent to the new 787 second assembly line in North Charleston, South Carolina.

The transaction has already been approved by the Charleston airport authority and is pending approval by the US Federal Aviation Administration.

The latest step in the negotiations over where to build the 77X comes only two years after Boeing agreed to a long-term labour contract with the IAM, which secured production of the 737 Max in Renton, Washington. That deal, however, did not seek the same level of concessions on a core issue, such as the company-funded pensions.

The schedule for the vote by the members of District 751 has not yet been set.