Boeing Promises MAX Production in Renton in Return for Early IAM Contract Extension

 - November 30, 2011, 2:49 PM
Boeing has promised to build the 737MAX in Renton, Washington in return for an early contract extension with the IAM. (Photo: Boeing)

Boeing has hung a proverbial carrot in front of the International Association of Machinists & Aerospace Workers (IAM) by promising to build the new 737 MAX in Renton, Wash., in return for approval of an early contract extension for hourly employees in Washington, Oregon and Kansas.

According to Boeing, it has discussed the possibility of an early contract extension with the IAM for “several weeks.” The current contract expires next September.

Meanwhile, Boeing has studied the prospect of locating 737 MAX production at alternative sites since the company announced in August that it would move forward with plans to develop the re-engined version of the 737. “Boeing has assessed the business case for locating production of the 737 MAX in Renton in light of the economics of a proposed new labor agreement, and the company is prepared to locate 737 MAX production in Renton provided the economics contained in that proposal are achieved,” it said in a statement.

Upon ratification an agreement by hourly employees, Boeing said it would commit the investment needed to produce Next-Generation 737s and 737 MAXs in its existing Renton facility. According to Boeing Commercial Airplanes CEO Jim Albaugh, Renton today holds the capacity to build no more than 42 airplanes a month. It has already begun the process of increasing rates from 31.5 to 35 per month and plans to reach 42 in 2013.

“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 Albaugh.

So far Boeing has received more than 700 commitments from nine customers for the 737 MAX. It expects the new airplane to enter service in 2017.