July 8, 2009 in Region

Key lawmakers warn of Boeing ultimatum

Dominic Gates Seattle Times
 

Members of the state’s congressional delegation said Tuesday that Boeing is laying down an ultimatum to its biggest union: Unless a long-term agreement barring strikes by the Machinists is reached by this fall, Boeing will build a second production line for the 787 someplace outside Washington.

“The whole thing comes down to, can they get a long-term agreement with the union, with a no-strike clause,” influential U.S. Rep. Norm Dicks, D-Bremerton, said in an interview Tuesday. “That’s what ultimately has to happen here in the next two or three or four months — or they are going to go elsewhere.

“I think if they get this agreement, they would stay.”

In a separate interview, Gov. Chris Gregoire said Boeing Commercial Airplanes CEO Scott Carson told her recently the company is seeking a long-term no-strike agreement with the Machinists union.

Carson also said Boeing will likely make its decision on the location of a second 787 production line this fall, though Gregoire said he did not specifically link the two elements as an ultimatum.

What the politicians seem to envision is some kind of “social contract” with the union in which Boeing would publicly commit to stay in this region in exchange for labor peace.

Concern about the location of a second 787 line has intensified with news that Boeing is buying the Charleston, S.C., plant of 787 supplier Vought Aircraft Industries.

Dicks, the third-ranking member of the House Appropriations Committee, is an aggressive lobbyist for Boeing on issues such as its bid for the Air Force refueling-tanker contract and is close to the company’s leadership.

He said the ultimatum was laid out for him and other members of the congressional delegation by “high-ranking people in the Boeing Company” whom he declined to name.

Dicks also said that at a March meeting with Boeing CEO Jim McNerney, arranged by Gregoire and held in the Washington, D.C., office of Sen. Patty Murray, “McNerney was very candid.”

“The message was that we need to get a resolution of this (strike) problem. We can’t live with this.”

Both of Washington’s U.S. senators and most of its representatives were present, Dicks said, as McNerney laid out how Boeing plans to do a detailed assessment of where to put a second 787 assembly line in an open competition, with Everett as only one option among several.

Rep. Jay Inslee, D-Bainbridge Island, said McNerney made clear that “the relationship with the labor community,” particularly the question of strikes, “was a major component of the decision.”

The International Association of Machinists (IAM) has struck the company four times in seven sets of contract talks over the past 20 years, most recently for two months last fall. Its contract expires in 2012.

Boeing spokesman Jim Proulx said the company “can’t comment on any conversations our senior executives may or may not have with government officials.”

Gregoire said the time frame offered by Boeing for a decision on a second 787 line has moved around somewhat this year. Initially it had been set for the spring, then shifted to early 2010, before moving again to “sometime this fall.”

Before the decision is made, she intends to go to Chicago to make the case for the Puget Sound region before Boeing’s board.

Gregoire described Boeing’s goal of a no-strike agreement with its union as ambitious, noting that it’s something politicians cannot achieve by legislation. It’s up to the two sides to negotiate it, she said.

“This is such a huge ask of the Machinists,” Gregoire said. “The idea of labor giving up the right to strike is a huge issue for them. There has to be something on the other side equally compelling. The magnitude of this is really challenging.”

Snohomish County Executive Aaron Reardon said Boeing’s legislative agenda and its drive to improve the state’s business climate are now secondary to “a resolution of the differences between the union and the company.”

Dicks said any overarching no-strike agreement would have to involve some kind of binding independent arbitration of disputes between management and union.

But IAM district President Tom Wroblewski balked at the idea of setting aside the union’s strike weapon.

“Take away our only power?” Wroblewski asked rhetorically. “I can’t see ever taking our power away.”

There have not yet been any deep discussions on the subject, he said.

“If we were to have these discussions, the company would have to come through with something, … guaranteed employment of some sort,” he said. “The trade-offs would be huge.”

Dicks agreed.

“This is a two-way street,” said Dicks. “I’ve urged the Boeing leadership that there’s got to be give on their side.”

Yet Tom Buffenbarger, IAM international president, said if Boeing wants to talk about a social contract, “the union’s ears are always open. Talk to us about it.”

How practical is Boeing’s threat to build a second 787 production line elsewhere?

Building one in Charleston would take a big investment by Boeing and other partners.

Not only would a new assembly plant have to be built, but also a costly and technically complex paint hangar. And suppliers such as Goodrich, which makes the engine pods, and New Breed, which delivers all the small parts to the line, would also need adjacent facilities.

Buffenbarger believes it wouldn’t make financial sense.

“Given the country’s economic condition, it would be hard for Boeing or any company right now to make the investments needed to put Charleston in the realm of a first-class aircraft-assembly site,” he said.

And apart from that infrastructure, he said, “It takes a trained work force, and one that’s developed over years and not over weeks or months.”

The union will have to decide whether Boeing’s ultimatum is serious or a bluff.

“It’s poker,” said John Monroe, a former Boeing executive who now consults for the Snohomish County Economic Development Council. “It’s a hell of a risk. We’re talking thousands of jobs and billions of dollars. It’s high stakes.”


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email