Troubling signs for Boeing's declining Northwest presence

The News TribuneDecember 22, 2013 

A new American Airlines Airbus A319 aircraft sits in a hanger Aug. 14 at Dallas-Forth Worth International Airport, Texas.

LM OTERO/THE ASSOCIATED PRESS FILE

One of our fervent wishes for the new year is to keep as many Boeing jobs in the Puget Sound region as possible.

Looking back at 2013, we see mixed signals on whether our wish will be fulfilled.

On the positive side, we kept production of the next generation of Boeing 737 aircraft, the stretched Boeing 737 MAX. And the state renewed tax breaks for aerospace manufacturing, which offer Boeing nearly $9 billion in inducements to keep the next generation of Boeing’s 777 aircraft, the 777X, as part of its proud “built in Washington” legacy.

But there are also troubling signs that foreshadow Boeing’s decline as an economic force in our state.

For instance, Boeing announced earlier this year it was moving engineers out of Washington state, while beefing up design and engineering centers in California and South Carolina, and establishing a new overseas design center in Moscow.

It also announced in December that it was moving more than 1,000 technology research jobs to new centers in Alabama, Missouri and South Carolina — all states that covet the 777X work.

But the most distressing developments are the self-inflicted wounds delivered by the International Association of Machinists District 751.

By a 2-to-1 margin, local union Machinists rejected an initial offer by Boeing that would have guaranteed wing fabrication and final assembly of the 777X to local Machinists for the foreseeable future. Lots of Machinists believed they had Boeing over a barrel — that they were the only ones who could assemble the 777X. So they rejected the deal — especially a key proposal to convert Boeing’s defined-benefit pension plan to a 401(k)-style plan going forward.

After the rejection, Boeing put the work out for bid. Twenty-two states responded, offering 54 sites.

Surprise. Lots of other places think they can do this work less expensively — and want it desperately. And Boeing — seeking labor costs that keep them competitive with Airbus for now, and with aircraft manufactured in China, Brazil, and India in the future — may just take the work elsewhere.

Boeing subsequently sweetened the offer. It raised its signing bonus from $10,000 to $15,000, it improved dental benefits, and it agreed to leave in place a wage progression the gets new hires to the top rate in six years.

Local leaders ignored the improved deal and barred a vote on it. Saturday, the national union, over the objection of local leaders, ordered a vote on the new plan in early January.

It’s too bad local union leaders wouldn’t listen to members asking for a new vote. In the name of solidarity, the nay-sayers may keep their pension plan until the current contract expires in a couple of years.

But pensions are an endangered species.

They’ll either eventually become 401(k) plans through negotiation or they’ll be worthless if, eventually, there are no Machinists building Boeing airplanes in the Pacific Northwest.

The Associated Press reported last week that the state, while desperately clinging to Boeing jobs, has also been courting Airbus, seeking a greater Evergreen-state presence for Boeing’s chief competitor. Sorry it’s come to that, but that may be the only consolation if the Machinists spurn this state’s leading manufacturer and lose more union jobs in the process.

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