SEATTLE -- After a third day of talks between Boeing and the Machinists Union, Boeing said they presented a counteroffer for 777X work to the leaders of the machinists union, which has been rejected.
The offer is still on the table, but KING 5 has learned that the company does not expect a positive vote without a "yes" recommendation from the union leadership.
"Boeing and the International Association of Machinists & Aerospace Workers District 751 have completed a third day of meetings following an attempt last month to secure a contract extension," Boeing said in a released statement. "This afternoon, in response to a proposal presented yesterday by the union to secure 777X work in the Puget Sound region, Boeing presented a best and final counterproposal. That offer was rejected by the union leadership."
Talks have now ended.
A month ago, the Machinists union rejected a proposed eight-year contract for the 777X work as members expressed concern about the breadth of the concessions. On Tuesday Boeing and the Machinists Union resumed talks and on Wednesday the union presented a preliminary proposal to Boeing. On Thursday, Boeing came back with their "best and final counterproposal," which they said was rejected by the union.
Boeing said they were willing to put the 777X wing production and final assembly in Everett as planned had the deal gone through. The company was offering was to increase the signing bonus from $10,000 to $15,000. The proposal would also have kept in place the current rate at which employees accelerate to the top of the pay scale, which is six years.
What Boeing was not willing to back down on was the question of retirement, saying that it still wants to move future retirement benefits to a 401K-style plan from a traditional pension plan.
Later Thursday, the Machinists Union released a statement on their website:
Talks between the Boeing Co. and Machinists Union District 751 have ended after the two sides failed to reach an agreement on a proposed contract extension that would have guaranteed the 777X would be built in Washington state.
“Our members want to build the 777X, and we believe Boeing’s best chance for success for this vital airplane program is for our members to build it here,” said District 751 President Tom Wroblewski.
“However, the price Boeing demanded was too high,” he continued. “Our senior leadership team could not recommend Boeing’s counter-offer.”
“On Wednesday, the union had offered Boeing a preliminary contract proposal that would have guaranteed the company a total of 16 years of labor peace by extending the current contract, which has been in place since 2008, until 2024.
“Boeing’s leadership has said time and again during this process that this was a top priority, and we were wiling to give them that,” Wroblewski said. “We were willing to give them labor peace.”
However, Boeing’s counter-offer on Thursday was mostly unchanged from the proposal that Machinists had rejected by a 2-to-1 margin on Nov. 13, demanding steep concession in retirement and health benefits while limiting future pay increases.
Boeing’s offer Thursday was contingent on union leadership recommending acceptance, Wroblewski said.
“This we could not do,” he said. “Our members had already rejected this.”
Wroblewski said the union will continue to make the case that Washington is the best place for Boeing to build the 777X, which is the latest derivative of Boeing’s best-selling widebody jet.
“Machinists Union pay and benefits make up less than 5 percent of the total cost of building an airplane,” he said. “And for these pennies on the dollar, Boeing gets in return the most-skilled, most-productive aerospace workers in the world
“Any objective analysis will show that Boeing’s best business case is to build the 777X in Washington, utilizing the skills, experience and dedication of our Machinists Union members,” he concluded.
Wroblewski said he does not regret attempting to negotiate a new deal. “Going back to the table was the responsible thing to do,” he said. “We just couldn’t get to an agreement. Again, the price was too high.”
Boeing says it has received proposals from 22 states seeking the 777X jobs.
KING 5's Liza Javier and the Associated Press contributed to this report.