Boeing machinists cast historic vote on labor contract
SEATTLE, Nov 13 (Reuters) - Boeing Co workers began voting Wednesday on a landmark labor contract, a historic decision that could forever alter the course of Boeing's presence in Washington state.
If International Association of Machinists members accept tough contract terms offered by Boeing, they'll win at least 20 years of work building Boeing's newest jet, securing the company's widebody production for a generation.
If they reject the deal that ends their traditional pension plan and raises healthcare costs, Boeing has said it intends to seriously consider building the jet, known as the 777X, elsewhere, likely in nonunion states or in Japan.
Workers lined up in predawn darkness on Wednesday outside the union hall in Everett, Washington, where Boeing builds the current 777 model, and elsewhere in the Seattle area and in Oregon. About 31,000 workers are eligible to cast ballots, and many told reporters they plan to vote no.
"I'm not really liking it for the young guys that are going to be new hires in the future, so I'm going to vote no," said one worker standing in line before his shift. "They did that for me years ago."
But others said they would accept it, fearing Boeing would eliminate 20,000 jobs over the next decade as it moved work elsewhere.
"I don't think Boeing's bluffing at all" about moving the work, said another worker. "They did it with second line of the 787."
Separately, Boeing Chief Executive Jim McNerney said on Wednesday the company would definitely look at alternative sites for the production, but declined to say if the vote was a "take it or leave it deal," according to an interview with KING 5 TV, Seattle's NBC affiliate station.
"If they turn it down, then we'll figure out what to do next," McNerney said, according to the report.
Boeing's alternatives include nonunion South Carolina, where the company currently assembles 787 Dreamliners, and where it broke ground on Tuesday for a new factory that will make engine housings for its forthcoming 737 MAX planes.
Boeing is buying more than 200 acres near the 787 campus to expand its facilities and has agreed to invest more than $1 billion and hire 2,000 more workers over the next eight years.
Boeing also may consider giving the wing work to Mitsubishi Heavy Industries, the Japanese industrial giant that already makes wings for the 787.
Reuters reported exclusively on Tuesday that Mitsubishi had made a detailed proposal to Boeing for building the 777X wing.
Boeing also has facilities in Long Beach, California, where it builds the C-17 military transport plane. That program is ending, freeing space and workers for 777X production.
Some Wall Street analysts expected the union to approve the contract, by a slim margin, since losing the work is worse than losing the pension.
But a no vote on Wednesday might not mean the 777X ultimately gets built outside Washington, because moving the work would bring logistical headaches, analysts and industry experts said.
Boeing already has a smooth-running factory line in Everett for the 777, its best-selling wide body jet.
It could use the same workforce and large, fixed tooling to build the 777X, an updated version with essentially the same aluminum fuselage, and new wings, engines and systems.
Boeing also is scaling back output of other jets built in Everett, notably the 747-8, which would make room for the 777X.
Any other site would require time to set up tooling, train workers and deal with the distance between its current 777 operations and the 777X line.
"The door isn't shut on Washington," said Ken Herbert, an analyst at investment firm Canaccord Genuity in San Francisco.