Boeing will winnow the list of 54 sites in 22 states competing to land production of the forthcoming 777X passenger jet to just a few finalists this week.

"This week we are narrowing that list down to a handful, from which our final decisions will be made," said Ray Conner, president and CEO of Boeing Commercial Airplanes in a letter to company employees Tuesday. A final decision will come after the new year.

Conner said the Chicago-based aerospace company is moving on in its site selection process after Machinists union leaders rejected last week's contract offer.

"It was a rejection, plain and simple, and we now have to turn and face the reality of the union leadership's final decision," Conner said.

Conner's comments indicate that the door is closed for further talks with the International Association of Machinists on a contract extension to secure 777X production in Washington state. Without a contract, Boeing has said it will look outside the Pacific Northwest for a site to produce the new passenger jet.

"Based on last week's outcome, we have now moved on to the next steps in the down-select process for 777X work placement, which will be completed early next year," Conner said. "We are encouraged by the quality and magnitude of the response."

States from coast to coast, including South Carolina, submitted proposals to land the 8,500 jobs and $10 billion investment Boeing will make for the new plane's production. South Carolina has not commented on its bid for the work.

In his letter, Conner recapped last week's events to clarify Boeing's position.

"We agreed to re-engage with union leaders with the hope of reaching agreement on a contract extension that would place 777X final assembly and wing fabrication and assembly in Puget Sound," he said. "We responded to a proposal from the union with a best and final counterproposal that meaningfully improved the value delivered to IAM members over our prior offer and clarified points that some said were unclear in that earlier contract proposal."

Boeing added new incentives, including improved dental coverage and an additional $5,000 lump sum payment on top of a $10,000 signing bonus offered in November in exchange for the union membership voting for the contract extension. The company also wanted the union to move away from a pension plan to a defined-savings plan, something union leaders could not support because they said the counter proposal was too much like the original contract offer.

"We were sincere in asking for the union leadership's commitment to support our improved final proposal as a tentative agreement that would be taken to a vote by IAM members with a recommendation for approval," Conner said. "However, that did not happen. The proposal was rejected in short order by IAM-751 leaders. Subsequently, some have asserted that we withdrew our proposal. That's not the case. We would not back away from an offer we made in good faith to our team."

Boeing hopes to start construction on a 777X production facility by November 2014 with airplane production by 2016 and delivery to customers in 2020.

Meanwhile, Boeing announced Friday it is staking a bigger claim on the Lowcountry by nearly tripling its footprint with the lease of 468 additional acres beside its 264-acre current site at Charleston International Airport.

The company has not announced its intentions for the new land except for a new paint facility for the 787 Dreamliner, which is produced in North Charleston.

Reach Warren L. Wise at 937-5524 or