Boeing Looks Elsewhere for 777X after IAM Rejects Contract

Boeing will consider other locations to assemble its new 777X after its machinists union voted down a proposed contract extension that was described as critical to basing work on the new widebody in the Puget Sound region of Washington state.

On Wednesday, 67 percent of members of the International Association of Machinists and Aerospace Workers (IAM) District 751 voted to reject the proposed eight-year contract extension through 2024, which would have replaced their pension accruals in 2016 with a company-funded retirement savings plan. The IAM said it represents 31,000 Boeing workers who are affected by the vote.

“Today, the democratic process worked and our members made the decision to not accept the company’s proposal,” stated Tom Wroblewski, District 751 directing business representative. “We preserved something sacred by rejecting the Boeing proposal. We’ve held on to our pensions and that’s big. At a time when financial planners are talking about a ‘retirement crisis’ in America, we have preserved a tool that will help our members retire with more comfort and dignity.”

Boeing Commercial Airplanes issued a statement from its president and CEO, Ray Conner, on Thursday. “We are very disappointed in the outcome of the union vote,” he said. “Our goal was twofold: to enable the 777X and its new composite wing to be produced in Puget Sound and to create a competitive structure to ensure that we continue market-leading pay, health care and retirement benefits while preserving jobs and our industrial base here in the region. But without the terms of this contract extension, we're left with no choice but to open the process competitively and pursue all options for the 777X.”

Washington Gov. Jay Inslee (D) earlier announced that Boeing’s basing decision also hinged on the Washington state Legislature passing an incentives package, including tax incentives, streamlined permitting and infrastructure improvements, valued at $8.7 billion. The legislature met in special session and passed the incentives package on November 9.