RENTON, Wash. -- Boeing and its machinists union have reached deal to ensure 737 MAX manufacturing remains in Renton, Boeing announced Wednesday.
The news came the same day the union said it reached a tentative deal to settle a contentious National Labor Relations Board dispute with the company. If union members vote to approve the agreement, the union would tell the National Labor Relations Board that it has no further grievances with Boeing.
The NLRB lawsuit against Boeing alleged the company violated labor laws by opening a new production line for its 787 airplane in South Carolina. The agency claimed Boeing was punishing Washington state workers for past strikes and wanted the company to return the work to Washington. Boeing denied the charges, saying it opened the South Carolina plant for valid economic reasons.
The deal would extend the existing contract between Boeing and the International Association of Machinists & Aerospace Workers until 2016. It was scheduled to expire next September.
Union members in Washington, Oregon and Kansas are scheduled to vote Dec. 7 on the tentative agreement. It calls for annual wage increases of 2 percent, cost-of-living adjustments, an incentive program intended to pay bonuses between 2 and 4 percent, a ratification bonus of $5,000 for each member, and improvements in the pension program.
"If our employees ratify a new agreement, building the 737 MAX in Renton will secure a long and prosperous future there, as well as at other sites in the Puget Sound area and in Portland, Ore., where 737 parts are built,” said Boeing Commercial Airplanes President and CEO Jim Albaugh.
“This will generate long-lasting security for our members,” the union told its members Wednesday. “It also resulted in a Boeing commitment to the success and continuation of the other airplane programs where our members have shown time and again their expertise, productivity and quality, resulting in increased profits for the Company.”
The union said Boeing approached its leadership in late October to begin talks, which were kept secret.
Boeing has more than 80,000 employees in Washington, mostly at the Renton factory and the wide-body factory in Everett.
"This is a tsunami-sized deal between Boeing and the Machinists union," said Sen. Maria Cantwell, D-Wash. "It is a transformation of the relationship between the company and workers to focus on quality, performance, and incentives.
Gov. Chris Gregoire commended Boeing and the union for an agreement that "shows a strong commitment by both sides to secure the future of aerospace in Washington state."
"Washington state is, and will continue to be, the world's premier center for aerospace known for building the safest and most innovative planes," she said in a statement. "In the last few years, I'm proud that Washington state has landed the 787, the Air Force refueling tanker, and now the 737 MAX."
Boeing has received 700 orders for the 737 MAX, which is expected to debut in 2017.