Boeing Co machinists approve a labor agreement by a vote of 51 percent in favour, ensuring the company's latest jetliner is built in Washington state
EVERETT, WASHINGTON (JANUARY 3, 2014) (NBC) - Boeing's machinists on Friday (January 3) narrowly approved a crucial labor contract that secured thousands of jobs and billions of dollars of economic activity forWashington state but will cost workers their pensions.
Had the workers rejected the offer, Boeing would have considered making the successor to its popular 777 widebody jet elsewhere, and had received offers from 22 states interested in hosting the new factory.
In clinching the agreement, Boeing secured the location favored by analysts and investors, who saw far lower risk in using the factory and workers who now build the 777.
Boeing also ensured that the machinists won't have an opportunity to strike until 2024, when the new contract expires.
The decision drew praise from political leaders who had brought pressure to bear on the union to approve the deal.
"Tonight Washington State secured its future as the aerospace capital of the world. Tonight Boeing announced that the carbon fiber wing assembly and the fuselage assembly work will be done in the State of Washington," said Governor Jay Inslee in a brief media conference in the state capital Olympia.
The choice Boeing offered had opened deep rifts between the local International Association of Machinists and Aerospace Workers (IAM), which opposed the contract, and its Washington, D.C.-based leadership, which forced a vote on the proposal.
It had also revealed cleavages between younger workers open to the deal and older workers dead set against it. Some 49 percent of the machinists are 50 or older, the union said.
In November, two-thirds of machinists voted against Boeing's first offer, which would have replaced their traditional defined-benefit pension with a defined-contribution savings plan, one of two retirement plans the workers receive.
The union's national leadership negotiated that deal. But local leaders opposed it, saying the take-aways were too great.
In the vote on Friday, members approved an eight-year contract extension that the union said provided $1 billion in additional benefits beyond the prior offer, but that will halt pension contributions in 2016.