From the WSJ:
Boeing Union Rejects Contract
Decision May Lead Jet Maker to Consider Locating 777X Project Outside Its Puget Sound Base
JON OSTROWER Updated Nov. 14, 2013 5:00 a.m. ET
SEATTLE— Boeing Co.'s largest union rejected an eight-year contract that would have guaranteed the plane maker's updated long-range 777X jetliner and its wings are built in unionized facilities in the Pacific Northwest.
The rejection brings fresh uncertainty to the process of finding a manufacturing home for the 777X. Boeing threatened earlier to look outside its traditional Puget Sound base should the contract vote fail.
Voting Wednesday, the 32,000 unionized members of the International Association of Machinists and Aerospace Workers, also known as the IAM, rejected the deal by a 67% to 33% margin.
Chaos marked the announcement here: The union's International Aerospace Coordinator Mark Johnson shared the results with assembled members, then quickly left the meeting hall to boos and chanting from members. The national leadership of the union hadn't endorsed the contract, but had repeatedly asked members to consider it on the grounds of long-term job growth.The union's local leadership had been under apparent pressure from national leadership. Local President Tom Wroblewski was to address the media after the results were announced, but a spokesman said immediately after the announcement that he wouldn't do so.
Mr. Wroblewski did offer a written statement, saying, "It is my belief that we represent the best aerospace workforce in the world and hope that as a result of this vote Boeing won't discard our skills when looking to place the 777X."
The contract, which was to take effect in late 2016, extracted deep concessions from the union, including significant changes in retirement benefits and the end of the defined-benefit pension. Accruals for the pension would cease at that time and would shift to a 401(k)-style defined-contribution plan.
Boeing Commercial Airplanes Chief Executive Ray Conner said in a statement, "We are very disappointed in the outcome of the union vote. But without the terms of this contract extension, we're left with no choice but to open the process competitively and pursue all options for the 777X."
...... the new uncertainty will likely set off a feeding frenzy among states vying for the valuable 777X work.
Washington Gov. Jay Inslee said in a news conference after the results were announced that the state will now bid for the 777X.
"The game is afoot and we intend to compete," Gov. Inslee said. On Monday, he signed an $8.7 billion package of incentives that had been announced six days earlier in tandem with the proposed union contract, aimed at landing the 777X.
Boeing said that both the incentives and the contract were required for it to select Washington for the final assembly of 777X and fabrication of its new carbon-fiber composite wings.
The machinists' existing contract, agreed to in late 2011 in a deal to keep manufacturing of Boeing's single-aisle 737 Max in unionized factories, is in effect until 2016. The company sought additional wage concessions at the time and was hailed as a model for future negotiations.
In 2011, Boeing opened its first nonunion final-assembly plant—in South Carolina—where it now builds some 787 Dreamliner jets. Industry officials have said the site is being considered for the 777X work.
Boeing has long envisioned building the 777X in Washington, where it has infrastructure and an experienced workforce; analysts see any other option as risky and expensive.
Many union members opposed to the contract saw the company's threat to look outside Puget Sound as a bluff, but now "nobody here knows what's going to happen," said Jim Levitt, a 34-year machinist. "It's like we're playing chicken with a driver who is not rational." [emphasis mine]
The last statement makes one wonder if he's talking about Boeing or the union? The union members are apparently smart enough to build on the most sophisticate machines in the world, but still too stupid to read the hand writing on the wall. Do they really believe they are going to be allowed to keep their old fashioned pension plans in perpetuity? The auto unions have long since given those up. The only people left on them are these Boeing employees and federal government employees.
I have to admit, I like the idea of Boeing building the 777x in South Carolina, if even for the selfish reason that we own a vacation home there and it'll increase the tax base and our ability for short term summer rentals. Come on down ya'll!