Business Columns & Blogs

Boeing news is big deal even if you’re not a Boeing machinist

In the heat of the moment, it can be difficult to tell whether it’s the surprise factor or the news itself that makes a breaking story a big deal. Time is required to assess whether the news is as significant as it first appeared.

So with the luxury of a little time to mull over the Boeing-IAM deal and the vote last week by the rank-and-file to ratify it, we have come to this conclusion:

Yeah, it was a big deal.

And it may turn out to have been an even bigger deal than it seemed at first blush.

The bigness of the news wasn’t just in the surprise, although that was a considerable part. While there had been some suggestions of behind-the-scenes talks between company and labor, there were no hints of an agreement of the daring breadth and depth that was announced. That nothing leaked is no small accomplishment by itself.

But more important were the details. By agreeing to a four-year extension of its contract, the IAM not only gets some net financial gains but assurances that the 737 Max will be assembled in Renton by its members. Long-term job security has been an increasingly important, and contentious, issue in recent rounds of contract negotiation at Boeing. The latest agreement is the most concrete assurance any union is likely to get.

Boeing, meanwhile, has removed the threat of a strike as a potential delay in getting the new plane to customers, which will help on orders. It also gets rid of that pesky NLRB case involving the South Carolina 787 plant, and it avoids the messy business of actually having to build a new assembly plant somewhere else.

The region is a winner too, since an immediate threat of continuing erosion in employment and presence of its largest private-sector employer is abated. The region (we’ll lump Puget Sound and the state as a whole into that term) isn’t off the hook entirely. It still has work to do in bolstering worker training programs, for example, and there will be uncertainty every time Boeing gets to thinking about a new plane, but the region’s prospects regarding Boeing are a lot happier now than they were a month ago.

That’s the obvious stuff. Here are some less apparent ways this deal could pay off.

Strikes are expensive. Removing the threat of a strike gives workers much more certainty that they’ll be working. Not only do they not have to sock away money in their own strike funds, they might even feel comfortable enough to spend a bit.

That by itself won’t pull the economy out of its slump, but it would certainly contribute to increased activity, and every little bit helps.

Boeing suppliers and subcontractors are winners, too, because they now have more clarity and confidence with which to plan. Instead of figuring out how to serve multiple locations of 737 assembly work, they might even be prompted to expand, to invest more in capital equipment and hire more employees.

Nor is that the extent of the effect on economic development. There are a lot of communities, Pierce County included, that feed well on spinoff activity from Boeing. It wouldn’t be a stretch to imagine economic-development organizations around the state getting on the phone to every aerospace-related expansion and relocation prospect they’ve ever chatted with to say, “Hey, now we know Boeing’s going to be here. Shouldn’t you be here too?”

As prolonged and deep as this recession has been, every scrap of good news is seized upon and magnified. A lot of people are pinning a lot of hope on the Boeing-IAM deal. Upon further reflection, we would advise this: Believe the hype. This one really does matter.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at