Tomorrow, in Dubai, Boeing Co. is scheduled to announce the first customer for its 777X, the next generation of its most profitable airplane.
The ability to quote that customer a firm price was reportedly the biggest factor in the company’s push to secure extended tax concessions from the state of Washington, and a new contract with the Machinists union.
The hurry-up offense backfired, big time.
The state rolled over. The Machinists did not, by an emphatic and angry two-thirds vote rejecting the agreement.
Members felt they were being bullied into a bad deal by company threats to build the 777X elsewhere. Their leadership buckled.
Local President Tom Wroblewski, who joined Gov. Jay Inslee, other state officials and Boeing representatives to encourage swift legislative action on tax concessions, subsequently tore up the contract, calling it “a piece of crap.”
Boeing officials are already calling on officials in Utah, Texas and California to find out what they are willing to offer as an alternative to Everett, where a new facility would be built to manufacture a composite wing for the 777X. South Carolina, where Boeing put some 787 assembly after Machinist strikes in 2005 and 2008, apparently has all it can handle ramping up production of that plane.
But Boeing officials have told Gov. Jay Inslee’s office that Washington is not out of contention. Tax concessions worth more than $8 billion will be hard to walk away from. And frustrated as the company may be with its workers, an obstreperous Machinist remains among the best in the world at his or her task.
The first 787s shipped from nonunion South Carolina for final assembly were a mess. The Machinists helped make them flyable, but the quality issues and delays cost Boeing billions, and the good will of longtime customers.
The Machinists are very well paid: an average $85,000 per year. They balked at the latest contract not so much because of the salary terms, but because Boeing wanted to discontinue its underfunded pension program. The company, for its part, is reporting stock buybacks, set record profits based on increased plane production and the chief executive got a 15 percent pay boost to more than $20 million last year.
This is not the fading United Automobile Workers vs. a sinking General Motors.
Although Sen. Michael Baumgartner, R-Spokane, is using this dispute to call for a special session on “right-to-work” legislation, this is a standoff more suited to mediation from Olympia, not provocation. The Machinists, some 30,000 strong, will shut down the company the day a nonunion worker steps on the floor.
As soon as Inslee returns from a trade mission to China, he needs to bring company and union back to the bargaining table. With two years to run on the existing contract, Boeing says it is in no hurry. Labor sympathizer Inslee should have a greater sense of urgency, one he needs to convey to the Machinists without triggering more anger.
As Washington’s chief executive, he cannot allow this dispute to fester.