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Originally published December 2, 2011 at 2:39 PM | Page modified December 3, 2011 at 8:16 AM

Union members scrutinize wording of historic Boeing contract

Ratification of the sweeping agreement is not guaranteed, and some of the 28,000 Machinists are concerned about potential loopholes in Boeing's promise to build the 737 MAX in Renton.

Seattle Times aerospace reporter

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Boeing and Machinists union leaders Friday tried to allay concerns by some rank-and-file members that the sweeping contract agreement announced this week may not ensure that the company builds its planned 737 MAX only in Renton.

The union leadership expects the tentative agreement to be ratified in a vote Wednesday, which would provide a jolt of good news for Washington state's economy.

Mark Blondin, the union's national aerospace coordinator, said that about 300 union members attending a local lodge meeting in Seattle on Thursday asked a lot of detailed questions and had a generally positive response.

Yet ratification is not guaranteed.

The proposed four-year contract, hailed as historic by officials on both sides, includes guaranteed annual wage increases of 2 percent and a new bonus plan that could tack on as much as 4 percent more. But nonfinancial provisions drew the most headlines: Boeing's commitment on the 737 MAX and the union's pledge to seek an end to a National Labor Relations Board complaint against Boeing.

Since members began studying the agreement, said one veteran Machinist, union members on the shop floor have expressed concern that it doesn't bind Boeing to building the next version of the 737, the MAX, exclusively in Renton.

Boeing responded late Friday to union members' concerns with a statement from Commercial Airplanes CEO Jim Albaugh that read in part, "Let me be as clear as I can possibly be: If this agreement is ratified, the MAX will be built in our Renton factory."

The agreement says Boeing commits to build the 737 "in Renton, to the extent such production can be feasibly completed in the current and existing 737 Renton production facilities." Similar phrasing is used in Boeing's commitment to fabricate 737 MAX parts in Auburn, Frederickson and Portland.

Some Machinists read this qualifying language as limiting the amount of 737 MAX work that will be located within the state because the "current and existing" plant in Renton is a fraction of its former size, with little room to expand.

"Why is there no public, written commitment to build whatever facilities may prove necessary to ensure the 737 MAX production will indeed be feasible in the Puget Sound region?" said the veteran Machinist, who asked not to be identified.

Another person said this wording could be a loophole that in the future would allow Boeing to build another 737 MAX assembly line outside Washington state, likely at its South Carolina site, even if Renton remains the main site of production.

Such "dual sourcing" is exactly what Boeing is doing with the 787 Dreamliner.

Blondin, in an interview Friday, said the International Association of Machinists (IAM) can't stop Boeing from placing work wherever it chooses. "The company has always had the right to place work," he said.

However, he said, the qualifying phrase in the agreement commits the company to do as much 737 MAX work as possible here — at the Renton assembly plant and at the local parts plants that currently build the wings and other 737 sections. "The deal commits Boeing to fill Renton to capacity, to fill Auburn to capacity, to fill Frederickson to capacity, to fill Portland to capacity," he said.

The Renton plant is rolling out 35 airplanes a month on a super-efficient moving assembly line, and Boeing aims to produce 42 per month and beyond there. Blondin said his IAM members in Renton are the ones who have boosted productivity to that level from just 20 planes a month a few years ago.

At the lodge meeting Thursday night, he said, shop stewards from Renton "were adamant they want to be involved, to build as many airplanes as we can get within the walls of the Renton facility." They believe the plant can go higher than 42 jets per month, he said. And should the need arise later for another assembly line to provide even more capacity, Blondin said, the union "will be right there with Boeing," to persuade them to do that, too, in Washington.

When the deal was announced Wednesday, Boeing said that as soon as it is ratified the company will "make the necessary investments" to build the 737 MAX in Washington. Blondin said that during the negotiations with the union, management committed to make capital investments not only in Renton but also in Auburn and at the other parts plants.

Boeing spokesman Tim Healy said the joint council of high-level Boeing executives and union officials, to be established under this week's agreement, will work to increase capacity in Renton. The process should be helped by the incentive bonuses in the agreement that depend upon increasing productivity.

"Investment in Renton as the home of the MAX will be part of the discussion" with that joint council, Albaugh said in his statement.

"In the past year alone, the company has invested millions of dollars in the site," he added, citing a variety of improvements to Renton's 737 production system. "We want to build on the world-class production system already in place. That's why the MAX team is based at the Renton site."

IAM members will vote Wednesday at union halls in Auburn, Everett, Renton and Seattle, and at the Pierce County Skills Center near the Fredrickson plant. Polls close at 6 p.m. with a simple majority needed for ratification. The bargaining unit includes 28,000 members in Washington, Oregon and Kansas.

If the agreement is voted down, the union will go back to trying to secure a new contract before the current one expires next September. Boeing's decision on where to build the 737 MAX will be up in the air again, with a decision needed by the spring.

If the vote on Wednesday is yes, the proposed four-year contract extension will take effect immediately.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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