Boeing’s Job Pledge in Seattle Sets Stage for Future Conflict

Boeing Co. has promised to keep aircraft production in the Pacific Northwest under a tentative labor agreement with the International Association of Machinists, the latest test of job-protection pacts that have produced uneven results in other sectors.

The labor deal would not only protect jobs in the Pacific Northwest for at least four years, but also lay the groundwork for a new commercial plane built in Washington state—a notable change for a company that not long ago shipped jobs to South Carolina.

But such agreements, while appealing in the short-term, often lay the groundwork for future conflict, industry observers say. The language of the tentative contract leaves Boeing plenty of room to alter course in the face of changing economic winds—the same type of backdoor clause that’s currently causing a wave of unrest in the auto industry.

Workers will vote Thursday to approve the deal, and the outcome is uncertain. Some are still angry about the 10-year contract that previously slashed benefits, while others feel the 25% raise offered by the company doesn’t come close enough to the union’s initial proposal for a 40% bump.

The agreement gives Boeing the right to make “strategic work placement decisions” related to market access, workforce capacity, and several other factors as needed, according to a draft copy.

Such deals look to protect workers, but also draw unions into managerial decisions they may not be equipped to make, said Marick Masters, a professor at Wayne State University who studies labor-management relations in the auto industry.

Moreover, unexpected changes to the economy can make it hard for employers to live up to their commitment.

“It’s the vagaries of the markets,” Masters said. “It’s just really challenging for these companies, and I don’t think there’s much to do about it.”

EV Delays

As negotiations between IAM and Boeing heated up over the past several months, the United Auto Workers union became enmeshed in an escalating feud with Stellantis NV, an example of how these job-protection deals can go sideways.

Stellantis delayed the opening of an electric vehicle plant in Belvidere, Ill., after agreeing last year to retool the shuttered facility to create new EV jobs. In the wake of the initial agreement with the union, President Joe Biden paid a visit to the area, donning a red UAW t-shirt in celebration.

The party didn’t last long. Stellantis has pushed the reopening of Belvidere in response to flagging demand for EVs. UAW President Shawn Fain threatened to strike once again, accusing the company at the Democratic National Convention for reneging on its goal.

Stellantis maintains that the UAW can’t legally go on strike, saying in an Aug. 20 statement that the union had agreed to contract language allowing the company to adjust its plans based on market conditions.

“The company has not violated the commitments made in the Investment Letter included in the 2023 UAW Collective Bargaining agreement and strongly objects to the union’s accusations,” the company said. “In fact, the UAW agreed to language that expressly allows the company to modify product investments and employment levels.”

It’s not the first time that an auto company has fought over job-protection language. Last year, the UAW was awarded $8 million after an arbitrator found that General Motors Co. tried to sidestep the collective bargaining agreement by labeling five plants in 2018 “unallocated,” instead of “idled” or “closed,” as the contract language stated.

Workers to Vote

The 25% pay bump would benefit about 33,000 union workers, as well as a $3,000 bonus if they ratify it quickly. But there’s no guarantee workers will heed the call of union leadership to approve the agreement.

The Machinists found themselves with much more leverage this time around, with Boeing weakened by a series of safety scandals including a door plug that blew out midair on an Alaska Airlines flight and two fatal crashes in 2018 and 2019.

A Boeing spokeswoman declined to comment, but referred to the company’s previous statements.

“This contract deepens our commitment to the Pacific Northwest,” Stephanie Pope, the president of Boeing’s commercial airplanes division, said in a statement Sept. 8. “Boeing’s roots are here in Washington. It is where generations of workers have built incredible airplanes that connect the world. And it’s why we’re excited that, as part of the contract, our team in the Puget Sound region will build Boeing’s next new airplane.”

IAM spokespeople didn’t respond to requests for comment on job-protection measures. In an interview with Bloomberg News, IAM District 751 President Jon Holden said negotiators got as much as they could, and the final decision rests with workers.

The commitment to stay in the region is a sign that the company wants to move on from its recent scandals, keeping production in an area with highly skilled workers, said Art Wheaton, a professor at the Cornell University School of Industrial and Labor Relations who has studied the aerospace and automotive industries.

“It’s not easy to ramp up and start up a new production line,” Wheaton said. “There are a lot of delays and a lot of things that happen.”

And Boeing, he said, doesn’t have room for error.