Boeing’s newly announced 777x family continues to capture business headlines as the company plays out a high stakes negotiation among its Seattle based labor union and other U.S. states as to where the ultimate production facilities are to be located.
In our last update, we cited business media reports indicating that union management in Seattle had summarily dismissed Boeing; attempted efforts to gain concessions in a eight year extension contract. Now comes word that a union vote has indeed been “ordered” by the president of the Machinists” International union, over the objections of Local 751, the local union affiliate. Last month, 67 percent of local union members voted to reject the earlier Boeing offer. It was unclear as to whether Boeing subsequently sweetened the deal by offering $15,000 per worker in one-time bonuses to offset pension change requests. The local union is quick to also note that Boeing has experienced record backlogs and profits and its board just authorized a $10 billion stock buyback program.
Meanwhile, Boeing continue to communicate that it is narrowing done the process of selection of production sites among other U.S. states outside the Seattle area with some states already being informed that they did not make the initial cut.
Animosity among Boeing and its labor unions seems to have a consistent pattern and this latest ongoing high-stakes sourcing negotiation can only add more tension. Similar tensions were involved in the 787 Dreamliner program which continues to play catch-up after multi-year delays and glitches associated with global-based supply chain major component sourcing that involved both product design and financial risk factors.
Hopefully, the 777x will not tread the same icy runway.