Machinists to vote on Boeing offer despite rejection, union leader says

Staff writerDecember 12, 2013 

Washington’s bid to place work on the 777X jet in the state may not be dead yet, despite the abrupt collapse Thursday afternoon of negotiations between Boeing management and the Machinists union.

In a phone interview late Thursday with The Seattle Times, the Machinists union’s lead negotiator said rank-and-file membership will get a chance to decide on the Boeing offer that the union leadership rejected earlier in the day.

Rich Michalski, who represented the national leadership of the International Association of Machinists in the negotiations, described the terms offered by Boeing management in a positive light and insisted that the members must decide the final outcome.

“Our members are very sophisticated and smart on this matter. Once we get the information on the offer to them, they will let us know,” Michalski said. “We really need to hear from our members.”

Michalski’s comments strongly suggest that the union will allow a vote on the latest offer, which could be one last chance for Washington state to win the 777X work.

No timeframe was given for the vote.

Leadership of Boeing’s biggest union earlier Thursday rejected an enhanced contract offer from the aerospace company that would have ensured Boeing would have built its newest jetliner in Everett.

“We entered these discussions to address the concerns we were hearing from our employees,” Ray Conner, president and CEO of Boeing Commercial Airplanes, said late Thursday in a prepared statement. “We’ve listened to the union leadership and had an open dialogue in hopes of moving toward each other. Unfortunately the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership.”

The offer, which Boeing labeled its “best and final,” enhanced the previous offer which union members rejected Nov. 13.

The Boeing offer came in response to the union’s proposal offered in talks Wednesday.

The company proposal improved its previous offer in several ways:

  • It raised the bonus for signing from $10,000 to $15,000.
  • It restored the seniority-based raise scheme to its present form.
  • Dental benefits were improved.

The company, however, kept intact the changes to its pension system that would have frozen the existing defined benefit pension system in place in 2016 with additional pension benefits added under a new defined contribution system.

The pension system changes were among the elements of the prior proposal that had drawn the most fire from union members.

Boeing’s contract offer applied not only to work on the 777X but also on Boeing 737 Max aircraft. 

The 737 Max is the newest version of Boeing best-selling single-aisle jet that Boeing promised to build in Renton after Machinists approved a contract out of sync from normal negotiations in 2011.

Some union members have expressed concern that Boeing might move work out of Renton if they reject Boeing’s 777X proposal.  Boeing has said it plans to build planes at Renton for years to come.

The 737 Max is an updated version of the 737 with new engines, aerodynamic improvements and improved cabin.

The key to reaching an agreement may be the one issue Boeing didn’t address in its new offer, the pension plan.

The defined benefit pension system under which the Machinists work is rapidly becoming an artifact of more generous times in corporate America.  By switching to a defined contribution plan, Boeing can shift investment risk from itself to its employees.

Boeing, meanwhile has continued evaluating offers from other states to locate the 777X assembly plant elsewhere. In its statement, the company said that it had proposals from 22 states, “many of which submitted multiple sites for consideration. A total of 54 sites are now being evaluated in the next critical stage of the process.”

Staff writer John Gillie contributed to this report.

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