Boeing union machinists gave the aerospace giant a resounding no to a contract that would have guaranteed Boeing would build its newest plane in Washington.
In rejecting the company’s offer, some 30,000 union members turned their back on a $10,000 approval bonus, a one-time pension boost and early retirement eligibility for some members. Some 67 percent of those voting rejected the offer.
The union’s decision threw open bidding for the final assembly site for the 777X and its composite wing.
Boeing, in a news release sent out after the vote, said: “We are very disappointed in the outcome of the union vote. Our goal was two-fold: 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.
“We had hoped for a different outcome.”
Some union officials expressed hope that negotiations with the company could restart. But at voting sites Wednesday, union members expressed strong disapproval of the company deal, saying it would cause long-term harm to union members’ quality of life.
Hazel Powers, a tooling inspector at Boeing’s Auburn plant, said Wednesday night that she was happy the proposal was rejected.
“I’m pleased not only for myself but for the young people. The old guys didn’t abandon us when we were new to Boeing. We supported our new people as well,” she said.
After the vote, Gov. Jay Inslee said the state would “move forward” with its incentive package for the company and that the state remained in competition for the 777X work.
The Washington Legislature last week approved an $8.7 billion tax relief bill Boeing said was necessary to ensure the company would build its newest plane in the state.
Other states and countries, including Japan, have already expressed strong interest in the work and the 10,000 jobs that it will create at Boeing.
The Boeing contract proposal contained multiple provisions the company said it needed to ensure its competitiveness.
Among those were:
• A contract twice as long — 8 years — as the usual union deals. Boeing said it needed labor peace while it initiates production of the 777X and its new 737 Max.
• General wage increases, a total of 4 percent over the life of the contract, were a fraction of what Boeing had given its workers in past contracts. New competition from China, Brazil and Russia could threaten Boeing’s profitability by forcing the planemaker to lower plane prices. And Boeing’s chief rival, Airbus, is building a new plant in Mobile, Ala., where aerospace unions are not expected to be able to organize the plant.
• The contract would bring an end to Boeing’s traditional defined benefit pension plan. A new pension plan would have been put in place for new workers and for existing workers’ further work at the company. That plan, a combination of an enhanced 401(k) savings plan and a defined contribution pension plan, shifted from Boeing to its workers the risk of creating enough wealth to fund them through their retirement years.
Boeing has noted that most major manufacturers have shed their defined-benefit plans. The aerospace company said it wanted to cut the uncertainty that accompanies those plans.
• Workers’ health care costs would have risen substantially.
Outside union polling places Wednesday, the mood was decidedly negative.
"My opinion is not just ‘no,’ but ‘hell, no,’ " said one union member who emerged from the Pierce County Skills Center after voting on the proposed pact. She, like many others who talked with The News Tribune, declined to give her name.
Union members had complained that the contract would erase the work and sacrifices of decades by union members to reach their present pay and benefit levels.
“Boeing used to stand for pride in their work, pride in how they treated their employees. I don’t think Bill Boeing would recognize the company he founded,” said one Boeing worker Wednesday in Frederickson.
Knowing that the contract likely wouldn’t be met with enthusiasm, however, Boeing included several ratification incentives beyond the promise of jobs for Western Washington.
Chief among those was a $10,000 ratification bonus to be paid within 30 days of a positive vote to everyone covered by the contract. The other incentive was a provision that allowed employees age 58 and older to retire with no pension penalties for early retirement and the pension enhancement to $95 per month per year of service.
Some union voters said the $10,000 didn’t buy their votes.
“The $10,000? That’s just $3 a day over the 10 years until the contract expires,” said one union member. (The union has two years remaining on its existing contract.)
One union member said he voted for the deal despite intense pressure from his co-workers.
That worker, who was employed by Boeing in the ’90s and then worked outside the company until three years ago, said most career Boeing workers have little idea what the wages and working conditions are like outside the aerospace company.
“In the real world, Boeing’s health care plan would be considered a Cadillac plan. Its wages are at the top of the scale,” he said.
Many Boeing workers said they think Boeing will be forced to build the 777X in Western Washington in spite of a union rejection of the contract.
“Where else do they have the plant? Where else do they have the skilled labor force?” asked a union member.
“If this contract is rejected,” said one, “You can mark this day as the day the good jobs began going away in Western Washington.”