Washington’s bid to place work on the 777X jet in the state may not be dead yet, despite the abrupt collapse Thursday afternoon of negotiations between Boeing Co. management and the Machinists union.
In a phone interview late Thursday, the Machinists union’s lead negotiator said rank-and-file membership will get a chance to decide on the Boeing offer that the union leadership rejected earlier that day.
Rich Michalski, who represented the national leadership of the International Association of Machinists in the negotiations, described the terms offered by Boeing management in a positive light and insisted that the members must decide the final outcome.
“Our members are very sophisticated and smart on this matter. Once we get the information on the offer to them, they will let us know,” Michalski said. “We really need to hear from our members.”
Michalski’s comments strongly suggest the union will allow a vote on the latest offer, which could be one last chance for Washington state to win the 777X work.
After news broke that the talks had failed, many rank-and-file Machinists wrote angry emails to reporters saying they should be allowed to vote.
Michalski said he couldn’t put a time frame on determining the wishes of the rank and file, adding, “I wouldn’t think we have a lot of time.”
This latest twist in the 777X cliffhanger followed a dramatic turn Thursday afternoon, when Boeing issued a statement saying the union leadership had rejected what management described as its final offer.
Boeing offered union members a total of $15,000 in bonuses and dropped an earlier proposal to dramatically slow the rate of wage growth for new hires.
But management insisted on eliminating the traditional pension for all employees, which according to union sources proved an insurmountable barrier.
A company statement issued after the breakdown seemed to leave little hope of a way forward.
“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.”
Boeing said its revised eight-year contract extension would have improved on the company’s previous offer – rejected last month – with an additional lump-sum bonus of $5,000 in 2020 on top of the previously offered $10,000 signing bonus. Dental benefits were improved as well.
Boeing’s offer also withdrew the proposal that would have slowed the wage progression for new hires. The offer reverted to the status quo, which is that new hires go to the top of the pay scale after six years.
The initial union reaction came in a statement from IAM District 751 President Tom Wroblewski, who said, “The price Boeing demanded was too high.”
Nevertheless, speaking by phone later, Michalski described the terms of the Boeing offer as “quite extraordinary” – and he meant that in a good way.
He said the offer included “a guarantee of work for 30 to 35 years.”
He said withdrawal of the pay-progression proposal “is a big deal.”
And even on the elimination of the traditional pension, Michalski offered a positive take.
He said that the replacement savings plan offered by Boeing – which puts into a retirement account 10 percent of an employee’s gross pay the first year, 10 percent the second year, 6 percent the third year and 4 percent each year thereafter – is “at least a healthy proposal.”
Referring to the nationwide site search Boeing embarked on after the IAM membership rejected management’s first offer a month ago, Michalski said other states “are lined up” to take the 777X work away from Washington.
“Our members are aware of that,” Michalski said, adding that the rank and file must now “look at the facts, the situation as it is.”
“They’ll let us know,” he said. “We need to hear from our members.”
Having said all that, Michalski insisted there is no difference of opinion between the national leadership he represents and the local leadership led by Wroblewski.
“We are a team,” said Michalski. “There is a lot of tension packed in this time, but let’s not lose our bearings. Nobody is trying to trump anybody.”
But later in the night, IAM local spokesman Bryan Corliss said, “Boeing has withdrawn the offer, so there is nothing for our members to vote on at this time.”
Boeing said the final offer the union leaders 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 the Puget Sound area.
In addition, a separate agreement committing final assembly of the 737 MAX to the Renton, Wash., site would have been extended through 2024.
After the offer was rejected, Boeing insisted it would proceed with its site search.
Two informed sources said the Boeing board is to meet Sunday in Chicago and will discuss the proposals from the states.
The board’s input will influence the compiling of a shortlist of prospective sites to build the 777X, one source said.