Fri November 8, 2013
Union Fury Could Prompt Boeing To Move 777X Assembly
Standing before a crowd of Boeing machinists on Thursday night, Tom Wroblewski, president of the Boeing machinists union, tore up a copy of the proposed contract and said he would try to stop it from coming to a vote.
“I know this is a piece of crap,” Wroblewski said, according to The Seattle Times.
The machinists before him were openly hostile to the eight-year deal, which would replace their health care costs and strip down their pensions.
But the next day, on Friday, the International Machinists union said that theatrics aside, it would go ahead with a vote next week on the proposed contract. Boeing has said the contract is key to its decision to build the 777X in the Puget Sound region.
Boeing analyst Scott Hamilton said that’s happening likely because the international union trumps the local one.
“It does raise the question of what was Tom Wroblewski’s role in negotiating this agreement and we don’t know the backstory to that,” Hamilton said. “Was this all negotiated at the national level? Was Wroblewski an active negotiator? We don’t know that but it’s clear that Tom was certainly reacting to his membership last night.”
Thursday night’s dramatic gesture was bad news – for Boeing and the machinists, said Richard Aboulafia, an analyst with the Teal Group in Washington, D.C. He called this the “worst-case scenario.”
Aboulafia said Thursday’s angry rejection of the deal could persuade Boeing to move the 777X jetliner out of the area – and thousands of jobs along with it.
“I don’t think the company had a whole lot of power here,” Aboulafia said, “but I think the union reaction has given them probably a lot of resolve to get out of Dodge.”
Boeing responded saying it was considering just that:
All of our options are still on the table, including those within Boeing and other interest we have received from outside. We chose to engage in Puget Sound first, but without full acceptance by the union and legislature, we will be left with no choice but to open up the process competitively and pursue other options for locating 777X work.
But Aboulafia also said that he doubts there is another serious location to build the 777X jetliner.
“I don’t think Boeing has a great deal of leverage here,” he said. “The reality is there are huge advantages to Boeing in keeping 777 assembly in Puget Sound. Logistically it would be very difficult to move it elsewhere.”
Speaking with KUOW, company officials would not specify other options it might pursue if it failed to receive the union concessions and tax breaks that are the subject of a special legislative session in Olympia.
In a letter to workers, Ray Conner, executive vice president of Boeing Commercial Airplanes, said Airbus wants to eat Boeing’s lunch, and that Boeing has to change to secure its future.
Conner told his employees that what they’re being offered is better than what other companies provide.
This story was originally published at 10:42 a.m. on Friday, Nov. 8.
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