The Boeing Company and its Machinists union have reached a tentative deal that clears the way to build Boeing's next big jet in Washington state.
At stake is where Boeing builds its next generation wide-body jet, the 777X. First, the Boeing Company and its biggest labor union agreed to a contract extension which includes a $10,000 per member signing bonus, significant pension changes and early retirement incentives for older workers. If ratified by the membership next week, the deal would guarantee labor peace at Boeing through 2024.
Boeing Commercial Airplanes CEO Ray Conner lauded the agreement as being "of historic proportion." In a written statement, he said the deal would "secure and extend thousands of high-wage, high-skilled aerospace jobs and expanded economic opportunity for residents of Puget Sound and Portland for many years to come."
A separate statement from the International Association of Machinists district 751 estimated the 777X assembly work could mean "as many as 10,000 direct and 10,000 indirect jobs in the immediate vicinity."
The next step, announced by Governor Jay Inslee in Olympia, is for the Washington Legislature to swiftly extend tax incentives Boeing previously received out to the year 2040. Inslee called a special session of the Legislature to convene on Thursday.
"The Boeing Company has assured me that if the union approves that contract and the legislature approves the package that I will propose to them, the 777X and its carbon fiber wing will be built in the state of Washington," said the governor. "This will give us certainty that Washington's aerospace future will be as bright as its incredible past."
In the upcoming special legislative session, Inslee also wants lawmakers to approve approximately $10 billion in new highway and transit spending to be financed with an unspecified gas tax increase. State Senate majority leader Rodney Tom (D-Medina) cautioned however that the gas tax increase is still up in the air.
"We're still working through what kind of increase that would be," said Tom. "Nobody is locked on to a number at this point. Obviously, there are a lot of moving pieces to that as far as the project list - the makeup between roads, transit, preservation and new projects. So there are a lot of moving pieces. It's very complicated."
Additional items placed on the legislature's plate by Governor Inslee include boosting enrollment slots in aerospace fields at community and technical colleges at a cost of several million dollars per year. He also wants lawmakers to "streamline" permitting for large manufacturing sites.
By law, special legislative sessions can last up to 30 days. The governor says he wants lawmakers to complete their work in a week. Senator Tom warns the highway funding package could be deferred to a later session. He and state Senate Republican Leader Mark Schoesler said in a joint statement Tuesday evening that Boeing leaders and union officials "are fine with giving lawmakers more time to work on a transportation-investment package."
Inslee says the working draft of the package does not include money for a new interstate bridge between Portland and Vancouver. Washington lawmakers rejected funding for the Columbia River Crossing earlier this year.
Boeing was reportedly eying South Carolina and Long Beach, California as alternative locations to assemble the twin-engine, long haul 777X jetliner.