A Jan. 3 vote by Boeing’s machinists union to accept the company’s long-term contract offer will keep final assembly of the new 777X plane in Washington State — with the largest corporate tax break in U.S. history — and dashes Alabama’s hopes of luring the project to Huntsville.
The Washington State Legislature last fall approved a series of incentives worth up to $8.7 billion through 2040, contingent upon construction of the 777X staying in Washington. It was signed into law in November.
Neither Boeing nor the machinists union played easy to get. After the vote initially failed, Boeing solicited bids from other states and got dozens of responses; Alabamians for a time dreamed of jetliner production at both ends of the state.
The Puget Sound-area machinists, meanwhile, ended up giving concessions that included moving their retirement plans away from pensions toward 401(k)-type arrangements. One union leader tore up copies of the contract in front of media cameras.
Washington state officials estimate the 777X line to be worth about 20, 000 jobs and more than $20 billion in economic activity.
Still, Alabamians shouldn’t take the “no” as final. An opinion piece in the Seattle Times, a day after the vote, concluded that Boeing negotiations will only get tougher in coming years as contracts are negotiated for future airliners. On the horizon: possibly a 757 replacement around 2019 or a 737 replacement around 2020.
Text by Dave Helms