November 5, 2013 in Region

Boeing, union in talks to build 777X in Washington

Dominic Gates Seattle Times

SEATTLE – In previously secret talks, Boeing and the Machinists union are working to clinch a deal to build the 777X jet in the Puget Sound area in exchange for a long-term labor contract.

“We’re at a serious point in the talks,” said Tom Buffenbarger, national head of the International Association of Machinists. “It’s getting to a point where the members decide.”

If a deal is reached, it’s likely that final assembly of the forthcoming 777X jet will be in Everett, and fabrication of its giant composite wing will be done somewhere nearby.

In a phone interview Monday afternoon, Buffenbarger said he hopes a deal will be agreed on within 24 to 48 hours.

The proposal would then be put to a vote by nearly 31,000 Machinist union members in Washington and another 1,500 in Portland.

“I don’t know how fast things move,” Buffenbarger said. “People are seriously considering all the options. … The members have the final say.”

Boeing confirmed talks are in progress but offered no further comment.

Alex Pietsch, director of Washington’s aerospace office, said Monday that Gov. Jay Inslee is “hopeful the parties can come to an agreement.”

Despite widespread concern that Boeing might shift 777X assembly work outside the state, many industry experts say the Everett plant that builds the current 777 has considerable advantages in skills and infrastructure.

Final assembly “will be in Puget Sound,” San Diego-based aviation technical expert Hans Weber predicted categorically. He added that Boeing is most likely to put the wing manufacturing facility there too.

Preliminary talks have been going on for some time, but formal negotiations began only last week.

Buffenbarger and IAM district Local 751 President Tom Wroblewski are leading the union side of the talks. Ray Conner, head of Boeing Commercial Airplanes, is leading the management side.

The talks are a replay of the successful negotiations two years ago, also led by Buffenbarger, Wroblewski and Conner, that produced a landmark extension of the IAM’s contract through 2016 and secured for Renton the work of building the 737 MAX.

In those negotiations, Boeing management secured labor peace for five years. The union also agreed to drop its complaint with the National Labor Relations Board that threatened to derail Boeing’s 787 final assembly line in North Charleston, S.C.

Details this time are tightly held. One element is a long-term contract extending into the next decade, said a person with knowledge of the details.

A Seattle-area Boeing executive, speaking on condition of anonymity, said Conner is focused tightly on reducing costs because aggressive competition from Airbus has been stealing market share from Boeing.

This executive said Boeing’s local leadership “has a lot of loyalty toward Washington.”

“People have family, brothers, sisters here,” the executive said. “We are living here. We want everything to prosper. But it’s finding the magic formula. Long-term, we have to make sure our cost base is competitive.”

The 777X is a proposed new variant of today’s 777 that will retain the same metal fuselage but add new engines and new carbon fiber-reinforced plastic composite wings. The plane is expected to be launched at next month’s Dubai Air Show and to enter service around 2020.

In recent weeks, news stories have circulated promoting South Carolina as a likely alternative to Washington for the 777X work.

And soon after Reuters first broke news of the secret talks early Monday, Loren Thompson, a defense analyst at the Lexington Institute who receives funding from Boeing, posted a story asserting that Boeing is also considering Long Beach, Calif., as an assembly site.

But the tidbits feeding such reports are likely part of negotiation brinkmanship, as Boeing tries to convince the union that the company has other viable options if the union doesn’t come to an agreement.

Weber, concurring with many aerospace experts consulted by the Seattle Times, said Washington is the heavy favorite to win the 777X work.

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