SEATTLE – Negotiations between Boeing Co. and the Machinists union over placing production of the 777X jet in Washington state abruptly collapsed Thursday, with the union rejecting what management described as its final offer.
A company statement issued after the breakdown left little room for hope that any further way forward is possible.
“This afternoon, in response to a proposal presented yesterday by the union to secure 777X work in the Puget Sound region, Boeing presented a best and final counterproposal,” Boeing said in the statement. “That offer was rejected by the union leadership.”
“We entered these discussions to address the concerns we were hearing from our employees,” said Ray Conner, chief executive of Boeing Commercial Airplanes. “We’ve listened to the union leadership and had an open dialogue in hopes of moving toward each other. Unfortunately the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership.”
Boeing said its revised eight-year contract extension would have improved on the company’s previous offer, with an additional lump-sum bonus of $5,000 on top of the previously offered $10,000 signing bonus, as well as improved dental benefits.
Boeing’s offer also withdrew the proposal from its offer rejected last month to dramatically slow the wage growth for new hires.
But the company insisted on eliminating the traditional pension for all employees, which according to union sources proved an insurmountable barrier.
Boeing said that the deal rejected Thursday would have committed the company to placing final assembly of the 777X, as well as the fabrication and assembly of the airplane’s composite wing, at a Boeing location in Washington’s Puget Sound area.
In addition, a separate agreement committing final assembly of the 737 MAX at the Renton site would have been extended through 2024.
Boeing said that the nationwide 777X site selection process has continued in parallel with this week’s union negotiations.
“In an overwhelmingly strong response from interested participants, Boeing has received proposals from 22 states, many of which submitted multiple sites for consideration,” Boeing said. “A total of 54 sites are now being evaluated in the next critical stage of the process.”