Boeing machinists reject labor deal on 777X by 67 percent

Thu Nov 14, 2013 4:56am EST
 
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By Alwyn Scott and Jonathan Kaminsky

SEATTLE (Reuters) - Boeing Co machinists soundly rejected an eight-year labor contract extension on Wednesday that would have let them build the company's newest jetliner in Washington, a historic decision that could forever alter the course of Boeing's 97-year presence in the state.

International Association of Machinists members voted 67 percent against a deal that would secure an estimated 20 years of work building Boeing's 777X jet, but a deal that would have terminated their pension plan and raised their healthcare costs.

The decision means Boeing will consider building key parts of the 777X, including the wings, in non-union U.S. states or in Japan, where it has already received an offer.

A crowd of more than 100 people erupted in cheers when the vote was announced amid a charged atmosphere at the union's main hall in Seattle.

The vote means Boeing will look for other locations to build the 777X, the only jet it is likely to develop in the next 15 years. Even though the union's 31,000 workers gave up their chance for those jobs, they considered the giveaways in the contract too grave to accept.

Boeing "overreached," said Kathy Cummings, a Washington State Labor Council official.

Boeing swiftly issued a statement saying it had sought to strike a balance between its desire to build the jet in the state and to get what it termed a competitive cost structure.

"We are very disappointed in the outcome of the union vote," Boeing Commercial Airplanes Chief Executive Ray Conner said in the statement.   Continued...

 
(L-R) Union leaders Mark Johnson, Tom Wroblewski, Susan Palmer and Rich Michalski announce the results of a union vote while speaking at the International Association of Machinists District 751 Headquarters in Seattle, Washington November 13, 2013. Boeing Co machinists soundly rejected an eight-year labour contract extension on Wednesday that would have let them build the company's newest jetliner in Washington, a historic decision that could forever alter the course of Boeing's 97-year presence in the state. International Association of Machinists members voted 67 percent against a deal that would secure an estimated 20 years of work building Boeing's 777X jet, but a deal that would have terminated their pension plan and raised their healthcare costs. REUTERS/David Ryder