Union rift on display in vote on revised Boeing contract

Font Size:
Default font size
Larger font size

Posted: Friday, January 3, 2014 12:00 am | Updated: 11:14 am, Tue Mar 25, 2014.

After Boeing’s workers in Washington state voted down an eight-year contract extension in November, Boeing wasted little time in soliciting offers from other states to build its new 777X aircraft.

Within weeks, 22 states made proposals to Boeing, with some offering billions of dollars in subsidies to lure a project that would mean thousands of jobs and the prestige of having such a prominent manufacturer.

All this so alarmed the leaders of the main union representing Boeing workers, the International Association of Machinists, that its president has brushed aside the objections of the local union and ordered a new vote — scheduled for today — on a slightly revised version of the contract.

The dispute highlights a rift within the union, one that reflects the varying priorities of its leadership. Union officials in Washington state want to preserve gains hard won from a company that has surging profits and record plane orders. But the international leadership sees a different threat — the possibility of losing a large manufacturing center and more than 10,000 union jobs to a right-to-work state where it would be difficult to win representation. And that could mean a big loss in dues — Boeing workers in the Puget Sound area paid $25.5 million in dues to the international union in 2012.

Boeing has promised to put final assembly of the 777X in the Seattle area, as well as fabrication of the aircraft’s wings, if the 31,000 Boeing machinists vote to approve the revised deal.

But that is by no means a sure thing. The president of the international union, R. Thomas Buffenbarger, defied union leaders in the Puget Sound area by ordering the new vote, and those leaders are urging Boeing workers to once again vote down the extension, which calls for numerous concessions.

In a message to Boeing workers in the Puget Sound area, Thomas Wroblewski, president of Machinists Union District Lodge 751, which is based there, said, “Because of the massive takeaways, the union is adamantly recommending members reject this offer.”

Wroblewski has asserted that the revised deal is not different enough from the previous deal — which was rejected 67 percent to 33 percent — to warrant a new vote. District 751’s leaders oppose Boeing’s demand that the machinists approve a deal that would freeze their pensions in favor of less generous, riskier 401(k) plans. District 751’s leaders also voice dismay that the deal would increase out-of-pocket health spending and includes raises totaling just 4 percent over eight years

If the machinists reject the revised deal, Boeing will continue its search on where to locate assembly of the 777X. The 777 is a long-range, twin-aisle aircraft that carries about 365 passengers. The 777X, which Boeing hopes to begin delivering by 2020, would be about one-fifth more fuel-efficient and carry up to 400 passengers.

Washington state, where the 777 is assembled, has promised Boeing $8.7 billion in tax benefits through 2040 if it puts the final assembly of the 777X in the state.

Some workers resent being asked to approve a deal filled with concessions when Boeing has record profits and a record backlog of $400 billion in orders. And those objections have grown since Boeing’s board decided two weeks ago to raise the company’s dividend about 50 percent and approve a $10 billion stock buyback.

“The optics of this are not good,” said Richard L. Aboulafia, an aerospace analyst with the Teal Group in Fairfax, Va. “Boeing couldn’t have timed this any worse from a negotiating standpoint.”

On Dec. 26, Buffenbarger, the international’s president, sent a letter to the 31,000 workers eligible to vote, praising the revised deal, without specifically urging a yes vote.

“The total value of the new improvements to the contract offer adds more than $1 billion to the previous offer,” he wrote. “I believe this represents a significant improvement worthy of the membership’s consideration.”

Buffenbarger said the revised deal added a $5,000 one-time payment, payable in January 2020, on top of the $10,000 bonus Boeing had previously promised upon ratification. In the biggest revision, the new proposal would preserve the current six-year “progression” it takes for new workers to reach full pay. In the first deal, that would have taken 16 years.

On their website, District 751’s leaders have posted a detailed explanation of what they say is wrong with the revised contract extension, which would be added onto the contract that expires in 2016. One objection is that the extension calls for a 1 percent raise every other year during the eight-year extension.

“It’s a bridge too far; it’s asking too much from us,” said Wilson Ferguson, president of the Local A unit of District 751.

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.



Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.