New York: Boeing Co said yesterday it was ready to re-examine alternative sites for its newest jet if assembly workers and local politicians do not ratify plans to build it in the Seattle area, its traditional manufacturing base.
The US planemaker issued the warning just hours after senior members of the International Association of Machinists union were quoted as voicing opposition to a proposed labour contract that is due to go to a membership vote next Wednesday.
The discord appeared to threaten tentative deals reached this week that would lock in labor costs and secure Boeing substantial tax breaks in exchange for building the 777X in the Seattle area, where it builds the current 777.
Analysts reacted cautiously to the dust-up, saying a deal could still be reached.
It’s not over till it’s over, said Rob Stallard, an analyst at RBC Capital Markets. As we’ve seen every time these things happen, there is a lot of rhetoric that doesn’t necessarily help in trying to fathom the final outcome.
Ken Herbert, an analyst at Canaccord Genuity, said, I do not think all of the back-and-forth here really worries investors.
Boeing s latest jet — the 777X, a successor to its most profitable long-haul aircraft — would secure thousands of jobs in the Seattle area, which is competing with non-unionised workers in the US South, where wages are lower.
After confidential and exclusive talks first reported by Reuters, Boeing and its main union reached a preliminary deal this week that calls for the wings and fuselage of the 777X to be built in the Puget Sound area.
The deal calls for lower healthcare benefits and a new retirement plan, and a separate draft agreement with state officials would provide for tax and other incentives.
The Seattle Times reported that a senior local union official tore up a copy of Boeing s contract offer and described it as crap, before telling a noisy meeting of disgruntled machinists that he would try to have it withdrawn.
The newspaper also reported that hundreds of assembly workers marched in the aisles of Boeing’s huge Everett plant, where nearly all its wide-body jets are currently built, and chanted slogans calling for the contract to be rejected. In an emailed statement, Boeing said that barring a yes vote from the union on the contract, it would begin talking to other potential locations.
All of our options are still on the table, including those within Boeing and interest we have received from outside, a Boeing spokesman said.
We chose to engage in Puget Sound first, but without full acceptance by the union and legislature, we will be left with no choice but to open up the process competitively and pursue other options for locating the 777X work, he said.
Reuters
