Members of Boeing Co's biggest labor union began voting on Wednesday on a four-year contract extension, which if ratified could end the planemaker's dispute with the National Labor Relations Board and ensure the upcoming version of the best-selling 737 narrowbody will be built in Washington state.
If the deal is ratified, the International Association of Machinists said it would drop its complaint against Boeing over its new 787 production site in South Carolina, the subject of a dispute between Boeing and the NLRB.
The tentative deal was reached last week, nine months before the expiration of the current contract. IAM spokeswoman Connie Kelliher said she expects the contract to be ratified.
I do because it's very quiet and orderly, and usually when the people are unhappy they're very vocal, Kelliher said.
It's hard to gauge but I would think we'd be hearing more if people were unhappy, she said. But our reps have been out 24/7 on the shop floor trying to answer everyone's questions.
The vote by the 28,000 IAM members will include ballots from union members in Kansas, Oregon and Washington. Voting was set to conclude at 6 p.m. Pacific Time.
Typically on a contract, 99.9 percent (of the members) vote, Kelliher said. I know at 5 a.m. there were lines at all the halls because people were voting.
If the deal wins the approval of the IAM membership, it will give Boeing some assurance that strikes will not disrupt its operations as it ramps up production of many of its models. For the union members in Washington, ratification also means local jobs for which it has campaigned.
Boeing has said that if the contract is ratified, it will build the new 737 MAX at its Renton, Washington, plant. Narrow-body jets are the short-haul workhorse for the global airline industry.
The 737 MAX will feature a new, more fuel efficient engine on its existing 737 body. Due to enter service in 2017, Boeing says it has already taken more than 700 provisional orders.
The aircraft will compete with rival Airbus' revamped A320neo single-aisle, due out in 2015. Airbus has more than 1,000 orders for the plane.
If the IAM drops its complaint about the 787 production site in South Carolina, it may defuse an ongoing battle between the NLRB and Boeing.
IAM and the NLRB have accused Boeing of putting its second 787 assembly line in South Carolina, a state unfriendly to labor unions, as punishment for past strikes, which are a protected activity. Boeing traditionally assembles its wide-body commercial planes in Everett, Washington.
Boeing has fought back, saying the location of its new plant, which opened this year, was purely a business decision based on costs and resources. But the conflict has spurred a broader debate between politicians who support organized labor and those who believe business should be free to build factories where they want, for whatever reasons they choose.
The NLRB is a government agency that is independent but dominated by Democrats. Republicans frequently cite the Boeing/NLRB dispute to denounce Democrats' records on job creation.
The IAM has had four strikes in the last 22 years, most recently a 58-day stoppage in 2008 that delayed the already-late 787. The company has lost more than 200 production days to strikes over the past two decades.
Boeing's contract extension, which would take effect immediately if ratified and run through September 2016, includes annual wage increases of 2 percent, a plan for bonuses between 2 percent and 4 percent each year and a $5,000 ratification bonus for each worker. It also preserves defined benefit pensions, now a rarity in corporate America.
Boeing shares were down 0.4 percent at $70.56 on Wednesday afternoon.
(Reporting by Kyle Peterson in Chicago, editing by Matthew Lewis)