S.C. ready to go after 777X if union rejects contract in Washington
South Carolina “will do everything it can” to go after production of Boeing’s next generation jetliner if the Machinists union in Washington state rejects a proposed labor contract Wednesday, a leading state lawmaker told The Post and Courier on Friday.
“If the union turns it down and Boeing starts looking elsewhere, I can assure the whole world that South Carolina will be doing everything we can to get every part of Boeing we can get,” state Senate Finance Chairman Hugh Leatherman said.
The senator’s comments came after discord among union members erupted Thursday in Seattle over the proposed labor agreement and a union leader reportedly tore up a copy of the contract extension at the end of a raucous meeting.
The Florence Republican controls the state’s purse strings to a large degree and was heavily involved in the incentive deals to attract Boeing to North Charleston in 2009 and its subsequent expansion announcement in April.
The lawmaker said Boeing executives have not come to the Palmetto State seeking incentives related to landing the 777X assembly and the thousands of jobs it would create, but he said South Carolina is ready to act if they do.
“I can’t tell you what, but there is something on the table,” Leatherman said when asked if the state has an incentive package prepared.
Asked if the state could afford another deal seven months after a $120 million inducement to Boeing in return for 2,000 more jobs and another $1 billion investment by 2020, Leatherman said it would depend on what the state received in return.
“We would have to evaluate what the state is going to get and what they are asking for,” he said.
In his talks with Boeing executives, he gathered it’s to Boeing’s economic advantage to keep production of the new long-range jet in Washington state since it’s a variant of the 777 line already made there.
“But if the union votes that contract down, wherever Boeing goes, it’s going to take time to get up to speed,” he said. “It’s a tough decision.”
Boeing is buying 267 acres near its 787 Dreamliner campus at Charleston International Airport for undisclosed future use.
“I believe there is a tremendous amount of Boeing in South Carolina’s future,” Leatherman said. “It’s a matter of when that happens.”
Many members came out against Boeing’s offer during the nighttime union meeting and earlier Thursday on the floor of the airplane maker’s wide-body assembly plant in Everett.
The Chicago-based aerospace giant said if the union contract does not pass or a vote is not held Wednesday, Boeing will start looking elsewhere besides the Northwest to build the new 777X passenger jet.
“All of our options are still on the table, including those within Boeing and interest we have received from outside. We chose to engage in Puget Sound first, but without full acceptance by the union and Legislature, we will be left with no choice but to open up the process competitively and pursue other options for locating the 777X work,” Boeing said in a statement. “If this is not ratified per the scheduled union vote on Nov. 13, we will begin taking the next steps.”
In addition to the union accepting the contract, the state must pass an incentive package that includes $8.7 billion in tax breaks for Boeing through 2040 or the plane maker will explore options outside the Evergreen State. Washington’s governor called the state Legislature into a special seven-day session Thursday to consider the tax breaks and a $10 billion transportation bill.
Boeing’s statement came after the Machinists union leader who ripped apart the labor proposal said he would also try to scuttle the contract vote.
“I know this is a piece of crap,” said Tom Wroblewski, District 751 President of the International Association of Machinists and Aerospace Workers, according to a report in The Seattle Times.
His comments came at the end of a meeting at Seattle union headquarters where hundreds of disgruntled members were gathered.
“I will go to see if this can be withdrawn and not even put to a vote,” Wroblewski was quoted as saying.
IAM spokesman Jonathan Battaglia said Friday he had not studied the union’s bylaws carefully enough to see if the vote could be stopped.
As of Friday, the union vote was still on.
Some union members were reported saying Boeing would come back with another offer if they rejected the one on the table.
Aviation analyst and others say that’s unlikely.
“I think they will find out that Boeing is not bluffing,” Leatherman said. “They will look elsewhere.”
Washington state aviation analyst Scott Hamilton agreed.
“Boeing will put the 777X elsewhere (Charleston being the obvious choice),” he said on his blog.
The proposed contract extends the union’s labor agreement with the Chicago-based aerospace giant eight years through 2024. The current contract ends in 2016.
The proposal also seeks pension and health care concessions from union members. It offers a $10,000 signing bonus and changes to retirement benefits, among other things.
Battaglia admitted tensions were high and an overwhelming majority of the 500 or so union members at Thursday night’s meeting were against the deal with Boeing.
The Seattle newspaper reported massive discontent with the proposed contract at the union meeting with some members carrying large homemade “Vote No” signs.
“Shouts, whistles and chants erupted often, and swelling waves of ‘No! No! No!’ periodically rolled out through the doors,” the Times report said.
According to two people who were inside the meeting, which was closed to the media until the doors flew open at the end, Local A President Wilson Ferguson in an opening speech called for a “no” vote.
Wroblewski was repeatedly called upon to do the same. But he declined to offer a formal recommendation on how to vote, until his emotional declaration as the meeting closed, according to the Seattle newspaper.
On Thursday, hundreds of factory workers paraded through the aisles of Boeing’s huge Everett plant and chanted slogans calling for the contract to be rejected, Reuters reported.
“Vote no,” said one union member on the IAM’s Facebook page.
Another said, “Hell no. Better to die on your feet than live on your knees.”
Frank Larkin, a spokesman for the IAM from its national headquarters in Washington, D.C., said the union is not taking an official position on how its members should vote.
A Boeing executive on Friday urged union members to consider the new labor contract carefully.
“I urge you to take the time to fully understand this proposal, and to talk with your family to determine how this affects our future,” said Commercial Airplanes Chief Executive Ray Conner in a handout to workers on the factory floor.
“There will be 49 governors calling Boeing if the deal doesn’t go through,” Washington Gov. Jay Inslee said.
Boeing agreed to final assembly and wing fabrication of the new twin-engine, long-range passenger jet in the Northwest if certain conditions are met. The company has made it no secret it is prepared to pull out of Washington state if the terms aren’t met.
Boeing’s plant in North Charleston and another in Long Beach, Calif., have been rumored to be alternative sites to Everett, Wash., where most of Boeing’s wide-body fleet is made.
Earlier this week, Charleston area officials said South Carolina was never really in the mix for the new jet because no one in the state has been talking about incentives.
With the latest turn of events in Washington, one official said that could change.
“We appreciate them helping us to get in the mix,” said Elliott Summey, vice chairman of Charleston County Council. “The state of South Carolina and Charleston County stand eager to have a dialogue on production of the 777X in North Charleston, and we can’t wait to put our best foot forward.”
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.