Boeing Union Girds for Battle Over Where to Build the Dreamliner

Boeing Co.’s biggest labor union is girding for a showdown over possible consolidation of 787 Dreamliner production at a nonunion plant, saying the planemaker’s study of the issue is a “charade” and warning that the company may seek contract concessions.

The International Association of Machinists and Aerospace Workers plans this month to make the case for keeping final assembly of the marquee wide-body jet at Boeing’s Everett, Washington, factory, saidJon Holden, president of IAM District 751.

“We strongly feel that we’ve already earned that work,” Holden, who represents about 32,000 Seattle-area workers, said in an interview. “It’s disconcerting, at best, to see this airplane program held over our members’ heads and our community.”

Boeing also builds the Dreamliner in North Charleston, South Carolina, and isconsidering whether to combine the two operations as it cuts output — and jobs — to contend with the collapse in air travel from the coronavirus pandemic. Demand for twin-aisle jets like the 787 has been hit particularly hard, forcing the company to slash the plane’s production to six a month. That makes two final assembly lines untenable.

“It’s hard to envision a scenario where it’s not consolidated into one location,” said Ken Herbert, an analyst with Canaccord Genuity. “On the surface, Charleston would seem to be the logical choice.”

The study is fueling anxiety in the Seattle area, which already has borne deep cuts to Boeing’s workforce. Everett, the company’s largest campus, with about 30,000 workers, faces the end of 747 production in the next two years. Losing the Dreamliner as well would mean the complex would produce just 60 planes a year.

Boeing declined to comment on the union’s plans, saying management is evaluating the most efficient way to build aircraft.

“We are engaging with our stakeholders, including the unions,” the Chicago-based company said by email. “We will take into account a number of factors and keep an eye on future requirements as we think through the long-term health of our production system. Boeing remains committed to Washington state and South Carolina.”

Local Leaders

Boeing has revealed little of what’s on the table and hasn’t appealed for state or local aid yet, saidDave Somers, executive of Snohomish County, home to the 1,000-acre Everett factory.

He’s been meeting with local leaders to determine if they could offer economic development assistance. State lawmakers have been gun-shy since billions of dollars in incentives for Boeing’s 777X wide-body were scrapped because they ran afoul of international trade law, Somers said.

“Everybody is brainstorming,” he said. “We’re going to lay out the case that we’re always improving our workforce development programs.”

Boeing has invested heavily in South Carolina, a state long hostile to unions, since a 2008 Machinists strike in Washington. The southeastern plant also serves as insurance against the earthquake-prone Pacific Northwest.

But the North Charleston factory experienced teething pains as Boeing pushed 787 manufacturing to record paces. Most recently, the companygrounded eight Dreamliners after unearthing production flaws linked to the South Carolina facility.

It also isn’t clear that North Charleston has sufficient capacity on its own if Dreamliner output rebounds to pre-pandemic levels, said Herbert, the Canaccord analyst.

The Machinists have until the end of this month to make the case for Everett. The union has a staff to craft proposals for keeping work packages, typically smaller ones, that Boeing has targeted to be moved outside the Seattle area. This will be the group’s first effort to keep a final-assembly operation.

The consolidation study is a “charade” that “may simply be masking a decision that is already made,” Holden wrote in the union’s Septembernewsletter. Threatening to move the jet’s production away from the Machinists echoes previous tactics that Boeing employed to wrangle union concessions and win other economic benefits, he said.

Midterm changes to the contract, which expires in 2024, can only occur following a vote by the union’s membership. The leadership has “no intention of approaching the company for concessions,” Holden said.

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