SEATTLE Nov 14 Boeing workers' rejection
of a new labour deal has sent the U.S. planemaker in search of
alternative sites to build its newest jet and could mark the
beginning of the end for wide-body aircraft manufacturing in the
The vote by machinists late on Wednesday revealed strong
opposition to the deal that Boeing said it needed to commit to
building its 777X jet in Washington, with no indication whether
fresh talks would take place.
The Seattle plant builds the current 777, but the 777X is
seen as crucial to Boeing's future as the successor to its most
profitable long-haul aircraft. The 777X is expected to be
launched at next week's Dubai Airshow with the announcement of
more than 100 orders.
Boeing Chief Executive Jim McNerney declined to say in a TV
interview on Wednesday whether the vote was a
take-it-or-leave-it deal. "There are options for us to look at
and we will evaluate them and decide," he told an NBC affiliate
"I'm not prepared to say we're moving in one direction or
another. Where and how we build it (the 777X) will be decided in
the next few months."
The International Association of Machinists (IAM) could
present a counter offer, but union leaders in Seattle said that
the strong "no" vote by a heavy turnout of members makes it
tough to hammer out a new proposal agreeable to both sides.
With a "slam-dunk 'no', it'll be hard to get people excited
about a new deal," said one person close to the process.
State officials in Washington said they would keep fighting
for the work. "We intend to compete, and that's what we've got
to focus on," Governor Jay Inslee said at a news conference in
Inslee, who last week led a successful five-day legislative
effort to pass $8.7 billion in tax incentives and other measures
to aide Boeing and the state's aerospace industry, urged the
machinists and Boeing to talk to each other, though he does not
expect that to happen within the next day or so.
The rejection surprised observers from Wall Street to Tokyo,
where many had expected the union to back a plan that would have
replaced their pension with a second savings-contribution plan
and raised healthcare costs in exchange for Boeing locating the
777X factory in Washington state, sustaining an estimated 20,000
jobs for a generation.
"It was a no? Really?" said a Japanese government official
who helps to oversee Japan's aerospace industry.
The Washington workforce is well-trained in building the
current 777 jetliner, which is 90 percent hand-built. The
factory and tooling are in place, with suppliers geared towards
delivering to the plant.
"The door isn't shut on Washington," Canaccord Genuity
analyst Ken Herbert said in San Francisco, adding that the
agreed tax package means that Boeing and the union could return
to the bargaining table.
Still, Boeing said in a statement after the vote that it was
disappointed and would shop the work to other states. Boeing has
operations in about 40 states, but among its most likely options
are North Charleston in South Carolina and Long Beach in
The company already builds 787 Dreamliners at North
Charleston and is investing $1 billion to expand its engineering
Long Beach, meanwhile, is home to production of Boeing's
C-17 military transport plane, which is due to stop in 2015
because of faltering sales. Boeing plans to lay off 3,000
workers involved in the 30-year-old program.
Other options include the Japanese port city of Nagoya,
where Mitsubishi builds carbon-composite wings for the
Dreamliner. Mitsubishi has told Boeing that the plant could be
expanded to produce wings for the 777X.
Wednesday's voting also revealed discord within the IAM's
District 751, representing 31,000 Boeing workers in Washington
and Oregon, which could inhibit its ability to enter new talks.
District President Tom Wroblewski appeared to support the
deal when it was announced last week, then criticised it at a
rowdy union meeting last Thursday.
His initial stance was at least partly dictated by the
union's national leaders, according to three people familiar
with the situation, and cost the leadership credibility with
members. Many of the members present when the vote was announced
jeered when union leaders took the stage.
"That's not a reaction our leadership should be getting,"
said Wilson Ferguson, vice president of District 751.
Asked if more talks were possible, he said: "We have a
contract until 2016; we'll continue building airplanes until
(Additional reporting by Jonathan Kaminsky and Eric Johnson in
Seattle, Tim Kelly in Tokyo and Tim Hepher in Paris; Editing by
Peter Henderson and David Goodman)