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Boeing machinists bloc demand vote on 777X contract offer

A worker stands in front of an engine on the Boeing 777 at their assembly operations in Everett, Washington, October 18, 2012. REUTERS/Andy Clark

By Alwyn Scott

EVERETT, Washington (Reuters) - Several dozen machinists rallied near Boeing's main aircraft factory here on Wednesday, demanding the chance to vote on a labor contract that union leaders rejected last week.

Shouting, "Give us a voice," the pro-vote members marched from the factory to the union hall a few blocks away. There they encountered a smaller group of union members who do not want a vote.

The rally and counter-protest illustrates the sharp rift that divides the union over the contract, which pits job security against a benefit that has long been seen as sacred: the company pension. It also showed the company remains far from clinching a deal that would secure the easiest route to building the new plane.

At stake are thousands of jobs at the factory that stood in the background of the rally, the largest building in the world by volume and home to all of Boeing's commercial jets except the 737.

Boeing has offered to build its next jetliner, the 777X, at the factory if machinists approved an eight-year contract extension that would replace their pension plan with a 401(k)-style retirement savings account.

But it has also courted 22 other states that are offering to host the jet program, which brings with it billions of dollars in economic activity and thousands of well-paid jobs.

"I think it would be easier all around to get an agreement with the union and do it in Washington," said Cai Von Rumohr, managing director an analyst at Cowen & Co in New York.

"Boeing did sweeten the offer pretty nicely" with its second proposal, he said, noting that most companies are shifting away from defined-benefit retirement plans to defined contribution plans.

"Maybe they can reach a deal if the union gets a kiss in where they come out on the 401(k)," Von Rumohr said.

If the 777X is not built in Everett, and other programs wind down, jobs would dwindle over the rest of the decade.

"It would be devastating for our community" to lose the jobs, said Paul Fritzler, a 767 structural mechanic who led the pro-vote rally.


The group of several dozen pro-vote members who turned out on Wednesday is small compared with the 31,000 members of the International Association of Machinists District 751 who work at Boeing. It is difficult to know how many members would vote for the contract if it was offered again.

"Honestly, I don't know," said Fritzler.

Those opposing the vote said it's unnecessary because last month the union resoundingly rejected a similar contract offer by Boeing with 67 percent voting against it.

"We already said no," said Kevin Flynn, an aviation maintenance technician inspector who has been at Boeing for 17 years.

Flynn said he realizes that most companies are ditching pension plans but that doesn't change his view.

"I'm not going to vote away my own pension," he said.

Flynn said Boeing is bound to hit problems if it tries to build the 777X elsewhere, but he also believes Boeing isn't bluffing about moving the work and he will move with it if he has to.

The company already builds the 777 at the Washington factory and since the plane is largely hand-made there, the skilled workers who assemble it would be hard to replace, he added.

"The idea that you're going to build a new airplane somewhere else and get it to customers on time is a fantasy," Flynn said.

(Reporting by Alwyn Scott; Editing by Matt Driskill)