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Boeing pact with Machinists union called turning point for labor

| Saturday, Jan. 4, 2014, 11:24 p.m.

SEATTLE — Under pressure from national union leaders, machinists in Washington state took a late-night vote that defied their local union bosses by narrowly approving a labor contract that secures a coveted plane project for the Seattle area but moves workers away from pensions.

The tight count exposed deep rifts in the once-powerful union, but with plenty of states lining up to give Boeing exactly what it wanted to get work on the 777X, the aerospace giant had a tremendous advantage.

The company, the state's governor and national union leaders hailed the contract as a vital boost to the region's economy, but to some observers the vote dealt a blow to local union influence.

“It shows that even a strong local is vulnerable and has a limited defensibility to slow the tide of concessions that has been going on across the country,” said Leon Grunberg, a sociology professor at the University of Puget Sound and co-author of “Turbulence: Boeing and the State of American Workers and Managers.”

“This is happening with a company that's doing very well financially,” he added.

Pennsylvania was among the 23 states attempting to lure Boeing's business.

“Anytime there is an opportunity to bring new business investment and jobs to Pennsylvania, Gov. (Tom) Corbett is engaged and ready to tout the commonwealth's location, manufacturing heritage and dedicated and skilled workers,” said Steven Kratz, a spokesman for the state Department of Community & Economic Development, early in December.

The state's bid was rejected on Dec. 20.

Members of the International Association of Machinists and Aerospace Workers approved an eight-year contract extension late Friday by 51 percent, a turnaround from November when the same workers voted down a previous offer by 67 percent.

The passing margin was about 600 votes of about 23,900 counted, according to Wilson Ferguson, president of a local unit of District 751.

Ferguson said on Saturday that the vote diminished the local union's power since it conceded hard-fought benefits it won't get back.

Foes of the contract opposed the idea of freezing the machinists' pensions and moving workers to a defined-contribution savings plan.

“The very fact that Boeing was making these demands in the first place just has to be seen as discouraging for average workers,” said Jake Rosenfeld, a sociology professor at the University of Washington who has a forthcoming book “What Unions No Longer Do.”

“This is a very strong union, and if you have a strong union, being forced into givebacks of this sort ... then you can just imagine how little leverage other workers have when negotiating,” he said.

Richard Gritta, a finance professor at Portland State University, said Boeing needed to gain these concessions to remain competitive in the “dog-eat-dog industry” in which Boeing and Airbus have traded dominance.

“It's a very tough industry. To gain these concessions from labor is critical,” he said.

Local union officials had urged their 30,000 members to oppose the deal, arguing that the proposal surrendered too much at a time of company profitability. They had opposed taking a vote at all but were overruled by national leaders in the Machinists union.

A number of political leaders, including Washington Gov. Jay Inslee, praised the vote, which supporters said keeps thousands of well-paying jobs in the state and solidifies Boeing's presence in the Seattle area, where the company built its first airplanes nearly a century ago.

Inslee, a Democrat, said the vote secured Washington state's “future as the aerospace capital of the world.”

“Everybody was scared about Boeing moving this huge new production out of state, so I think there was tremendous anxiety about losing this production,” Grunberg said.

Sen. Patty Murray, D-Wash., said on Friday that the decision was not an easy one and that workers' concerns about income and retirement security were legitimate. But the Democrat also said the agreement guarantees “thousands of good-paying jobs and billions of dollars in economic growth.”

Under the terms of the contract extension, Boeing said, the 777X and its composite wing will be built in the Puget Sound area by Boeing employees represented by the Machinists union.

Lynne Dodson, with the Washington State Labor Council, the largest labor group in the state with 450,000 members, did not see Friday's vote as an indication of declining union influence.

“It's an indication of just how far Boeing will go,” she said. “It's more a reflection of corporate greed than of union power.”

Ferguson, the local union leader, said on Saturday morning: “This was a turning point in the labor movement. Pensions were hard-fought battles to get in the first place. Once they're gone, they're gone.

“Their fear and intimidation worked,” he added.

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