After secret talks that began in earnest in mid-October, Boeing and the Machinists union have reached a landmark tentative agreement that would ensure the 737MAX is built in Renton and lead to settlement of the National Labor Relations Board (NLRB) case against the company.
The deal may also bring more Air Force tanker work to the Puget Sound region.
A four-year contract extension is also part of the pact, the union said at a news conference Wednesday.
Members must approve the agreement, and union leaders who’ve endorsed the contract said it will be put to a swift vote next week.
“The 737 MAX has landed here in the state of Washington,” said Tom Wroblewski, president of local district Lodge 751 of the International Association of Machinists (IAM). “This is a new day, the start of a new way of doing business.”
Boeing Commercial Airplanes chief Jim Albaugh confirmed the deal in a statement.
“If our employees ratify a new agreement, building the 737 MAX in Renton will secure a long and prosperous future there, as well as at other sites in the Puget Sound area and in Portland, Ore., where 737 parts are built,” Albaugh said.
I have to wonder about the timing. Craig Becker’s term on the NLRB ends at the end of the year, which denies the board a quorum. But as I’ve blogged previously, the NLRB planned for a lack of quorum by publishing a finding that if there was no quorum then its general counsel could carry on its lawsuit against Boeing and other rule changes. The NLRB was set to vote today on a controversial rule, but scuttled that plan at the last minute after Brian Hayes, the board’s lone Republican member, went public and threatened to resign. His resignation would have denied a quorum and forced the board to either abandon the vote or expose their general counsel move. Now we get a deal with the machinists union that seems to allow Boeing to proceed with the South Carolina Dreamliner plant.
Is this a sign that the NLRB and Obama are finally getting the message? I doubt it, but it’s an interesting possibility.
“Is this a sign that the NLRB and Obama are finally getting the message?”
More likely Boeing and the IAM know that once the NLRB gears get moving the end result will likely please nobody. Better to seize the initiative now and put the matter to rest.
Knowing nothing about what went on to reach this deal I speculate the following; IAM gives up contesting Boeing’s plant in SC and, in exchange, Boeing agrees to keep assembly of the newest 737 in WA along with a 4 year contract to kick in as soon as the current one expires. So, IAM gets secured work in WA, Boeing gets their plant in SC and strikes are averted until at least 2016. Sounds like good business sense prevailed for everyone! And the NLRB and the Administration come out looking impotent and foolish once again.
This was the intent of the IAM, NLRB, and Obama all along. The South Carolina NLRB lawsuit was the Chicago way (Pretty nice plant you got there. Be a shame if it couldn’t be opened. Hey, where do you want to build the 737 Max?)
That implies that the NLRN, IAM and the Administration had intent to manipulate Boeing’s manufacturing plans for a plane that didn’t even exist yet! Do you really believe any of these parties are that precient?
Truthfully, it was the IAM who got the face-saving here. Contract and security-wise they walked away with something they were probably going to get anyways. Meanwhile, 787s will start popping out in Charleston, just like Boeing intended all along. And the NLRB and the Administration get to pound sand.
The 737 is not “built” in Renton, it is only assembled in Renton. The 737 fuselage is built in Wichita, the engines are made in Ohio and France, tail surfaces are made in N. Ireland, China, Korea and Japan, and so on.
The reason Boeing gave into the Renton plant IAM union demands is that the Boeing Corp. cannot afford a disruption in 737 production at this time. 737 deliveries are the cash cow that funds the Boeing Commercial Aircraft Group division. Boeing CAG needs the cash flow from 737 deliveries to cover the massive costs from their 787 program. To make up for the huge cash flow shortfall created by the budget overruns and schedule delays of the 787 program, Boeing has had to increase production rates in the 737 program. So a disruption in 737 deliveries due to a strike would be catastrophic financially for the Boeing Corp.
As soon as Boeing CAG begins making 787 deliveries and gets its cash flow back in order, the Renton plant along with its continual IAM union hassles will quickly wither away. 737 production will end in about 7 or 8 years when the 797 deliveries begin. After that, the Renton plant will be a weed-filled vacant lot.
Was with you right up until the 797 comment. There is no such beast.
There is a 797 on paper: http://tinyurl.com/fbnr6
Don’t know if it’s for real or not.
“This is a new day, the start of a new way of doing business.” — Tom Wroblewski, president of local district Lodge 751 of the International Association of Machinists (IAM)
This, to me, is the most disturbing part of the quoted portions. The start of a new way of doing business is to refuse to negotiate with the company, when the company decides to do business elsewhere – have the government come in and threaten and use it’s force to shut down the business, then “negotiate” with the company that is under duress?
self correction… that should be “its” – not “it’s”…