Boeing machinists accept contract to keep 777x in Washington state

The Boeing machinists’ union in Washington state voted late Friday night to accept a critical labor contract that will keep construction of the Boeing 777x in the state where the company has been building most of its commercial aircraft for more than 90 years.

The union approved the deal by a narrow margin of 51 to 49 percent.

By signing the deal, the union ensured that construction of the 777x would remain in Washington – but at the cost of a significant cut in retirement benefits for its members, due to a shift from a defined benefit pension system to 401(k) plans.

In addition to the pension issue, opponents decried increased health care expenses and slower wage growth. However, some machinists will likely see their base salaries rise above $100,000 under the new agreement.

Washington Gov. Jay Inslee and Boeing hailed Friday's vote. "Tonight, Washington state secured its future as the aerospace capital of the world," Inslee said.

Had the union voted no, Boeing Co. certainly would have had options as to where it would build the plane.

The aircraft maker had received offers from 22 states interested in hosting a new factory to build the successor to its popular 777 wide-body jet.

The vote has opened deep rifts between the local International Association of Machinists and Aerospace Workers (IAM), which opposed the contract, and its Washington leadership, which forced a vote on the proposal. It has also revealed differences between younger workers open to the deal and older workers dead-set against it.

"We missed it by 1 percent because people were confused and worried about their jobs," said Rick Herrmann, who has been working at Boeing for 46 years.

"Our members have spoken and having said that this is the course we'll take," Jim Bearden, administrative assistant for Machinists District 751, said in announcing the results. "No member liked this vote or the position we were put in by the company, nor was it an easy vote for anyone to cast."

In November, two-thirds of machinists voted against a similar offer that would have replaced their traditional defined-benefit pension with a 401(k)-style savings plan, one of two retirement plans the workers receive. After the initial contract rejection, Boeing immediately began soliciting bids from other states. 

The union's national leadership negotiated that deal, which would have extended the contract eight years beyond its current expiration in 2016. But local leaders opposed it, saying the retirement losses for the workers were too great.

In an effort to keep construction of the new plane in the state, legislators passed a tax incentive package worth nearly $9 billion – the largest of its kind ever passed anywhere in the country.

Union spokeswoman Connie Kelliher said earlier Friday that Washington was the right place to build the plane.

“Every advantage is still here tomorrow regardless of how the vote goes,” she said. “The customers, the analysts, the media, everybody acknowledges that Washington state is the right place to build the 777x. It has the least amount of risk. All the advantages are still here.”

Lester Mullen, a District 751 council delegate who works on the current 777 wing production line, said Boeing put the employees in a frightening position. "They held a gun to our head and our people were afraid," Mullen said.

Al Jazeera and wire services. Dexter Mullins contributed to this report.