Union leaders reject Boeing 777X counteroffer

SEATTLE (AP) - Boeing on Thursday presented what it called a final counterproposal to the Machinists union in negotiations to keep much of the work on a new 777X jet in the Puget Sound region. Union leaders rejected it, saying "the price was too high."

The Machinists last month rejected a proposed eight-year contract for the 777X work, in part because it would have replaced workers' traditional defined-benefit pension with a defined-contribution savings plan.

Boeing Co. spokesman Doug Alder said the revised proposal presented Thursday included previously proposed "changes to the way members earn future retirement benefits," meaning a defined-contribution plan, but it withdrew an earlier proposal to dramatically slow wage growth for new hires. The new offer would have kept in place the current rate at which employees rise to the top of the pay scale.

"We've listened to the union leadership and had an open dialogue in hopes of moving toward each other," Ray Conner, president and CEO of Boeing Commercial Airplanes, said in a statement. "Unfortunately, the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership."

Tom Wroblewski, president of Machinists Union District Lodge 751, said his members want to build the 777X. "However, the price Boeing demanded was too high," he said in a statement Thursday night. "Our senior leadership team could not recommend Boeing's counteroffer."

He called Boeing's new offer "mostly unchanged" from the proposal union members earlier rejected by a 2-to-1 margin.

Boeing's offer was contingent on union leadership recommending acceptance, Wroblewski said.

"This we could not do," he said. "Our members had already rejected this."

The union and the company reopened talks Tuesday, which was also Boeing's deadline for other states to submit proposals to build the new jet. The company said it has received proposals from 22 states eager for the jobs.

"No more talks are planned," Alder said in a brief telephone interview. "We consider them to be over for now. Our focus is on moving forward in the site selection process."

Gov. Jay Inslee said he planned to talk to both sides.

"Despite today's setback, I remain convinced that an agreement between the Machinists and Boeing would be in the best interest of all parties - the workers, the company and Washington state," he said in a statement. "We have submitted our state's proposal and I still hope that the company will recognize that the best way to ensure that the 777X is delivered to its customers on time and at the least cost is to build it here."

On top of a previously offered $10,000 signing bonus, employees would have received an additional lump sum bonus of $5,000 in Boeing's counterproposal, Alder said.

The company would have committed to placing final assembly of the 777X, as well as the fabrication and assembly of the airplane's composite wing, at a Boeing location in the Puget Sound area. In addition, a separate agreement committing to final assembly of the 737 MAX at the Renton, Wash., site would have been extended through 2024.

Wroblewski said the Machinists offered Boeing a preliminary proposal this week that would have guaranteed the company a total of 16 years of labor peace by extending the current contract, which has been in place since 2008, until 2024.

After the Machinists rejected the initial proposal Nov. 13, Boeing immediately began soliciting bids across the country. Lawmakers in Missouri held a special session to approve incentives in hopes of landing the 777X work.

Boeing said Thursday that many states submitted multiple sites for consideration. The company said 54 sites are now being evaluated.

In its own bid to win the 777X jobs, Washington state recently approved tax breaks for Boeing valued at $9 billion over the coming years, along with legislation to improve aerospace training programs and the permitting process.

Chicago-based Boeing began offering the 777X in May, but it's still finalizing plans for the plane and aiming to deliver the first aircraft by the end of the decade. Boeing has said it is expected to carry as many as 400 passengers and be more fuel efficient than the current 777.

The 777X is already drawing plenty of interest from carriers. At the Dubai Airshow last month, Boeing received orders for 225 such planes from three airlines.