SEATTLE — The Machinists union voted down Boeing’s proposed 777X contract Wednesday night, thereby rebuffing Boeing’s offer to make the aircraft and its carbon-fiber wings exclusively in Puget Sound region in exchange for heavy benefit concessions. The resounding rejection calls into question the next steps for Boeing and for the future of Seattle aerospace.
The final count was 67% against, 33% in favor: a two to one margin.
The results of the vote were read to members just after 9 in the evening at an IAM union hall on the south side of the city. The final tally, judged by many as a landslide decision, was met with boisterous cheers from members in the room. IAM International aerospace coordinator Mark Johnson delivered the news, but not before those in attendance booed and heckled him. A follow-up press conference that was to have been led by local IAM president Tom Wroblewski was canceled unexpectedly after being delayed for nearly an hour. Instead, union leadership retreated after the meeting to an adjacent building, walked up a set of stairs to the second floor, and closed the doors behind them.
Earlier in the day, while voting was still underway, the mood was decidedly negative in tone at the Everett voting site. Groups of employees held up signs and chanted slogans denouncing the contract and the union leadership that brought it to vote to begin with. Very few were stating, at least publicly, that they had voted anything other than ‘no’.
Union members ultimately dumped the deal out of concerns over significant benefit cuts, primarily to medical benefits, wage structures, and pension contributions. It did not help that many also resented the threatening ‘take it or we leave’ manner in which Boeing presented the offer, with members describing it as “corporate extortion” and “hostage-taking”.
Following the evening’s vote, Boeing was quick to respond with a bleak and muted statement from Boeing Commercial Airplanes President Ray Conner, who said: “We are very disappointed in the outcome of the union vote.” The company also noted that they will “open the process competitively and pursue all options for the 777X”, potentially beginning as early as tomorrow. The remark at least begins the process of making good on threats that the company had repeatedly made to take the airplane elsewhere should the unions fail to ratify the contract.
The union rejection and Boeing’s threats to move elsewhere have not definitively ruled out the possibility that the airplane and its wings could still be made in the region, however. In a late-breaking press conference arranged in the capital of Olympia, Washington state Governor Jay Inslee said: “the game is afoot and we intend to compete.” The state legislature hastily approved a $9 billion package of incentives aimed at keeping Boeing in Washington last weekend during a special session. Inslee is expected to step in to try to find a workable solution.
While it may not be over, the region will have a hard time convincing Boeing that they’re still interested in Washington state after such a decisive ‘no’. Company brass would have to walk back significant portions of their original offer to convince 18% of the union’s 32,000+ members to switch sides in any future vote. As Boeing brass has failed to blink thus far, that seems unlikely.
In addition, and most importantly, Washington state will be competing against more than just itself from here on out. Boeing has a handful of readily available options going forward including Long Beach, California; Salt Lake City, Utah; and Huntsville, Alabama, as reported by the Seattle Times. Charleston, South Carolina, where Boeing already has a substantial commercial airplanes production presence, is also a viable option, though looks to be increasingly less popular. Other states, including Texas, have also expressed interest in building the 777X.
Whoever winds up winning the program is set to reap the benefits of thousands of jobs complete with long-term job security. The airplane, which has yet to be formally announced, has already generated a handful of orders. It is expected to gain even more, up to $80billion worth, during its anticipated formal launch next week at the Dubai air show.
The airplane is the replacement for its older, original 777 siblings, created in the mid-1990s. The new, revamped version of the airplane is expected to hold between 350 and 400 passengers, pitting the airplane against stretched versions of the rival Airbus A350 passenger jet. The 777X is expected to enter service late in the decade.