Machinists vote to accept contract offer; Boeing says it will build 777X in Washington

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SEATTLE -- Machinists union members, with a 51% yes vote, accepted a Boeing Co. contract proposal Friday night that will cut pension and health care benefits, but possibly ensure construction in the Puget Sound region of the planned 777X airliner.

"Tonight our members voted to accept Boeing's  proposal … with a 51% yes vote," said Jim Bearden, an official of the International Association of Machinists and Aerospace Workers District 751, at a news conference after the ballots were counted. "Our members have spoken … and this is the course we’ll take. No member liked this vote or the position we were put in by the company..."

Clearly disappointed in the acceptance vote, Bearden went on to say, "We faced tremendous pressure from every source imaginable. Politicians, the media and others, who truly had no right to get into our business, were aligned against us and did their best to influence our folks’ votes.

"But this decision means Boeing hopefully will stop the pursuit of a different site for its 777x aircraft program, and our goal in the coming years is to make sure the company lives up to its commitments … and truly keeps jobs in Washington state. It's up to all of us now to pull together to make this aircraft program successful," he said, without taking questions.

Boeing said in a statement that, "under the terms of the eight-year contract extension, the 777X and its composite wing will be built in the Puget Sound area by Boeing employees represented by the IAM. This work includes fuselage build, final assembly and major components fabrication such as interiors and wires."

“Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter,” said Boeing Commercial Airplanes President and CEO Ray Conner. “We’re proud to say that together, we’ll build the world’s next great airplane—the 777X and its new wing – right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

About 31,000 members of the Machinists union, nearly all in the Puget Sound region, voted on the proposed eight-year contract that would cut some pension and health care benefits. About 1,500 union members in Portland, Ore., and Wichita, Kan., also voted.

A previous Boeing contract proposal was rejected 51 days ago -- on Nov. 13 -- by 67 percent of the union members.

Machinists votes on the Boeing contract offer being counted in Everett, Wash., Friday night.

The second vote was held after Boeing offered a new plan with a few sweeteners. The union’s national leadership ordered the vote over the opposition of local leaders, who said the revised offer wasn't much better than the previous version.

The main sticking point in the Boeing offer was the company's desire to eliminate the workers' traditional, defined-pension plan in 2016 and replace it with a new 401(k)-type retirement savings plan. But the union members, in their vote Friday, chose to accept it.

Boeing is the biggest private employer in Washington, with about 82,500 employees.  In addition, thousands more are employed by aerospace suppliers in the state.

The Washington Legislature earlier in 2013 approved $8.7 billion in tax breaks and other incentives for Boeing.  But the company wanted contract concessions from its union workforce in the Puget Sound to guarantee the manufacture of the 777X in Washington state.

After the first rejection vote, Boeing asked other states to submit proposals if a 777X deal with the union doesn't come through. The company said it received proposals from 22 states, including South Carolina, a right-to-work state where some Boeing 787 Dreamliners are built.

The new Boeing 777X would be the latest version of the twin-aisle 777, one of Boeing's bestselling models. The 777 has been built in Everett, Wash., since the early 1990s.

In a statement Thursday night, Boeing said, in part, that their contract proposal would keep "the IAM workforce above market in wages, health care and retirement benefits" and increase the chance of future airliners being built in Washington.

Boeing noted work on the 777x will include composite wing fabrication and assembly. “Current mechanics will have the opportunity to be trained for this new composite work, which could set the stage for the next generation of manufacturing innovation in the Puget Sound region,” the statement said.

Gov. Jay Inslee said after the vote Friday night that he wanted "to thank each Machinist, no matter how they voted" and said the tax-incentive package passed by the Legislature ensures those incentives only occur if Boeing builds the 777X in Washington state for the life of the airliner, with no possible second lines opened up elsewhere.

"There will not be any more South Carolinas like that, that occurred on the 787" Dreamliner, when Boeing opened up a second line for manufacture of that aircraft in Charleston, S.C., Inslee said.

“Tonight, Washington state secured its future as the aerospace capital of the world. To make that happen, the International Association of Machinists District 751 took a hard vote that demands the respect of all Washingtonians who will benefit from having Boeing build the 777X here.

"We have a history of innovation in our state that has gotten us to this point today and will chart our future for decades to come. Fabrication of the carbon fiber wing gives us a path to the forefront of the next generation of aerospace manufacturing and the start of a new industry for our state.

“Tonight, Washington showed the world we can design our future," Inslee said. "We look forward to seeing the jetliner of the future take off and help us build a Washington that works for everyone.”