Boeing digs deeper in South Carolina as union faces 777X vote

Tue Nov 12, 2013 7:26pm EST
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By Harriet McLeod

NORTH CHARLESTON, South Carolina (Reuters) - The battle for Boeing jobs heated up on Tuesday as the plane maker broke ground for a new factory in South Carolina just as workers in Washington state prepared to vote on a deal that could bring the latest jet to that state.

Boeing Co (BA.N: Quote) said it will consider South Carolina and other states for the new jet program, known as the 777X, unless its Washington-based International Association of Machinists union approves a new contract in a vote set for Wednesday.

Japan's Mitsubishi Heavy Industries (7011.T: Quote) also has approached Boeing with a detailed proposal to build the 777X wings.

"It's in the IAM's hands to decide," Jack Jones, vice president and general manager of Boeing South Carolina, said on Tuesday at a groundbreaking ceremony on a new jet engine center in South Carolina, a state with a very small union presence.

If union members in Washington state reject the deal, "then we have the right, and Ray (Conner, president and CEO of Boeing Commercial Airplanes) has indicated that we will exercise the right we have, to move potentially outside the state of Washington."

Boeing said last week that approval of the labor deal, which extends the current machinist contract until 2024, and a package of state tax incentives, were necessary for it to build the jet and its wings in Washington.

The legislature approved $8.7 billion in tax incentives and other investments on Saturday.

But union leaders have not endorsed the labor contract and many members have urged a 'no' vote, because the proposal freezes pension benefits, raises health care costs and provides minimal wage increases.   Continued...

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young