What comes next for Boeing in Washington state?
In our opinion
Nearly a month has passed since a special legislative session was called by Washington Gov. Jay Inslee.
The job at hand was to try to wrangle together packages to fund major transportation projects and tax breaks to encourage one of the state’s foremost employers, Boeing, to keep building their world-class aircraft here.
The roads fix never actually made the agenda, and the Boeing deal was made moot when on Nov. 13 members of the International Association of Machinists and Aerospace Workers voted overwhelmingly – by a 67 percent margin – to turn down a contract extension.
Boeing sought that deal in an attempt to try to forecast the future in the volatile business and provide longtime job security to upwards of 30,000 workers.
Why is what happens in Everett and Renton important to us? There’s a budding aerospace industry here on the West Plains. It’s currently anchored by Triumph Composite Systems, but poised, perhaps, to become a driving economic engine in the future.
Not, however, if assembly lines currently 300 miles away move to South Carolina, California, Missouri or even Japan. These, and many more have been mentioned as locations currently courting Boeing, should they decide to take the assembly lines for the new 777X jetliner elsewhere.
It’s potentially a huge hit to the economy of the entire state.
Boeing and its associated industries generated $76 billion in economic activity in Washington in 2012. To put that number in perspective, Microsoft’s operations in the state generated a total of $34.3 billion in economic activity in Washington in 2011.
The company has 100 pre-orders for the 777X, plus has a ton of work lined up for a new generation of the workhorse 737 and has to make them someplace. It is estimated if the assembly lines shift, so will some 20,000 of those jobs.
When we first took up the subject, the Cheney Free Press editorial board wondered why things seemed to have such a take-it-or-leave-it attitude on both sides. Upon further review it appears there is not an open door to further negotiate on the part of the union because this was an effort by Boeing to extend the existing four-year agreement signed in 2011.
Among the issues that garnered the most headlines and sound-bites was Boeing’s insistence that the workers guaranteed pension plan would have been changed to a more volatile and market-driven 401K. And workers would have had to pay more of a share for their health care.
Boeing did toss in a $10,000 signing bonus, hoping to sweeten the deal enough to keep one of the most notable names in the aerospace industry at home in the state of Washington where it first built airplanes nearly 100 years ago.
It was just two years ago many of these same workers voted by a 74 percent margin to approve a contract extension that would keep the new 737MAX in Renton. That deal kept and improved both the guaranteed pension and health insurance benefits, which were to be extended to retirees, present employees and new hires alike.
That’s something a company, which has shown a gross profit of between $12-14 billion per year over the last five years, could and should afford.
But moving forward where there are no guarantees in the commercial aircraft manufacturing business they essentially share with European-based Airbus, Boeing was asking workers to assume a fraction of the risk the company shoulders on a daily basis.
All with the prospect that workers who make between $56,000 and $76,000 a year – that’s between $33 to $43 an hour – will have jobs for years to come.
The last time workers were asked to make a major concession – that a vote in 2009 not to strike for a 10-year period – they also said no. And Boeing took production of the 787 to South Carolina.
It will be interesting to see what move comes next for Boeing.