Boeing, IAM Reach Tentative Deal To Build 737 MAX in Washington

 - December 1, 2011, 10:42 AM
Under a tentative agreement with the IAM, Boeing would build 737 MAX narrowbodies in Renton, Washington, alongside current 737NGs. (Photo: Boeing)

Members of the International Association of Machinists and Aerospace Workers (IAM) will vote on December 7 on a four-year contract extension that includes a commitment by Boeing to build the 737 MAX in Renton, Wash., and a promise by the union to petition the National Labor Relations Board (NLRB) to drop its lawsuit against the company. 

The tentative four-year deal, which IAM leaders said would also ensure continuation of widebody work in the Puget Sound region, includes an annual pay raise of 2 percent and cost-of-living adjustments, an incentive program tied to bonuses of between 2 and 4 percent, a ratification bonus of $5,000 for each member, an increase in the formula for calculating penions in each year of the pact and guarantees that new hires would receive traditional pensions.

A settlement of the NLRB’s complaint, which charges that Boeing illegally retaliated against its Puget Sound workers by building a new 787 plant in Charleston, S.C., will remain a matter for the labor board to decide. However, NLRB acting general counsel Lafe Solomon suggested he would accede to the union’s wishes once the sides reach an agreement.

“The tentative agreement announced today between Boeing and the Machinists Union is a very significant and hopeful development,” said Solomon in a statement. “The tentative agreement is subject to ratification by the employees, and, if ratified, we will be in discussions with the parties about the next steps in the process.”

IAM District Lodge 751 president Tom Wroblewski called Boeing’s offer an “extraordinary proposal.”

The proposed contract extension would “secure thousands of jobs while raising Machinists’ pay and pensions,” he said. “Hopefully it also signals the start of a new relationship that can both meet our members’ expectations for good jobs, while giving Boeing the stability and productivity it needs to succeed.”

Yesterday Boeing said it had discussed the possibility of an early contract extension with the IAM for “several weeks.” The current contract expires next September.

Meanwhile, Boeing had 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. 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.