Boeing is again hunting for possible locations to build its 777x airliner after Boeing’s machinist’s union rejected a deal that would have kept production of the aerospace giant’s only planned jet at its Everett, Washington plant.
Members of the International Machinists Union voted 67% against a contract extension Wednesday that included a freeze on pensions in exchange for the right for Boeing to build in Washington. The money intended to be saved through the potential deal, along with $8.7 billion in tax breaks scrambled together by state lawmakers, was designed to ensure the state remains Boeing’s main production center.
With the union’s rejection of the deal, however, the location where Boeing will construct its upcomign 777x is again up in the air. Long Beach was originally listed as a potential site because the facilities and workforce could easily handle the production of a new aircraft, but promises of cheaper production lured the company to Washington.
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Boeing said in a statement that it was disappointed with the outcome of the union vote and will open up production of its largest twin-engine jet to competitive bidding by other regions.
“We are very disappointed in the outcome of the union vote,” Boeing Commercial Airplanes Chief Executive Ray Conner said. “Without the terms of this contract extension, we’re left with no choice but to open the process competitively and pursue all options for the 777X.”
A competitive cost structure is crucial for Boeing’s production of the 777x, a wide-body airliner that is expected to dominate the high-end commercial transport market when it is released in 2020. In a cutthroat environment, Boeing needs to lower costs to remain competitive, Conner wrote in a Nov. 8 letter to employees.
Boeing announced in September that it would be closing its Long Beach plant after the finl C-17 is delivered in 2015, leaving more than 5000 local jobs at risk.
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