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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Topic: 777X

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January 3, 2014 at 10:27 AM

Vote: The future of the 777X and Puget Sound

Machinists wait in line Friday morning at the Everett union hall to vote on the Boeing contract proposal. (Mike Siegel / The Seattle Times)

Machinists wait in line Friday morning at the Everett union hall to vote on the Boeing contract proposal. (Mike Siegel / The Seattle Times)

Members of the International Association of Machinists are getting a second shot today at approving Boeing’s offer to build the 777X here. In the previous vote, they rejected it by a 2-to-1 margin. What happens if the deal is voted down again?

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Comments | More in Aerospace/Boeing | Topics: 777X

December 6, 2013 at 10:35 AM

Vote: Where will the 777X go?

One of the most interesting things I learned in Dominic Gates’ story today in the Seattle Times is that the most number of jobs Boeing is promising prospective 777X sites is about 8,500 direct jobs.

Also, the factories for the new airliner and its advanced wing will require an investment of $10 billion (assuming, I assume, they don’t use Everett, where many facilities and much infrastructure already exists). And from the states that want this prize, Boeing wants…a lot to lower its costs.

Machinists here refused the company’s hurry-up-and-say-yes proposal. Yet Washington has approved $8.7 billion in tax breaks. Would Boeing come back with another offer for the union, or is it done — even though the Puget Sound region offers the best place to build the plane?

My question for you: Based on the information we have now…

Read on for some of the best business stories of the week and the Econ Haiku.

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Comments | More in Aerospace/Boeing | Topics: 777X

November 25, 2013 at 10:11 AM

Getting inside the heads of the Machinists

Why did they do it? Many in the Puget Sound are still asking this question after the Machinists decisively rejected Boeing’s offer to build the 777X here. I’ve written about the miscalculations and misunderstandings on both sides.

But I received an email from source containing a letter that a union member sent to Boeing Commercial Airplanes chief Ray Conner in response to his open letter, which ran in newspapers, urging acceptance of the deal.

You can disagree or not, but here it is:

Dear Mr. Conner,

I am Boeing employee working under the current IAM 751 contract. I am also a third generation Boeing Employee. Growing up my (now 86 year old) grandma had a saying that has stuck with me until now. She always said, “Boeing has been good to this family.” A statement I have always believed to be true until this last contract proposal.

After World War 2, my grandfather retired from duty in the Air Force and began his career at the Boeing Company. In the 1970’s two of his sons hired on in Tooling, joining their father at Boeing until his retirement. Both sons continued on to have long careers with the company. The oldest retired a few years back and the youngest, my father, is still an active employee with 35 years at Boeing. Currently, all three of his daughters are financially supported by Boeing incomes. Along with me, my two brothers-in-law are also employed at Boeing. Two of us are IAM members and the third is an Engineer who is in fear that his job may be eliminated or moved out of state. One of my brothers-in -law has a father who is also a 30+ year IAM member. Apart from my immediate family we also have many extended family members who are current, long time Boeing employees.

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Comments | More in Aerospace/Boeing | Topics: 777X, Machinists vote

November 14, 2013 at 10:23 AM

The Boeing vote: Morning-after reflections

A cynic might say that Boeing has the International Association of Machinists right where it wants them. The company came to Washington first to build the new 777X. Workers voted down the requested contract extension. So if the new airplane is built elsewhere, it is the union’s fault.

But last night’s vote and the circumstances surrounding it are filled with shades of gray.

Boeing is operating as a multinational company in a “shareholder value” environment created since the 1980s and in a competitive world. Thus, record profits and high executive compensation are not at odds with trying to drive down costs, including — especially — for labor. They go hand-in-hand. While Boeing benefits from government subsidies and other “rents,” it worries about rivals that will emerge from China and Brazil in future years.

Executives are not unmindful of the value of the Puget Sound aerospace cluster and the high-skilled workers that saved it from the outsourced disasters of the Dreamliner. That’s why the company would rather built the 777X here, but not at any price.

They also operate in a quick-step world. Everybody knew a decision on where to make the new airplane was coming. State officials and union leaders seemed to understand the need for a speedy process.

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Comments | More in Aerospace/Boeing | Topics: 777X, Machinists vote

November 1, 2013 at 10:22 AM

Vote: Boeing’s future in the Puget Sound

It’s been a bad news, good news week. We learned that much of the detailed design work on the 777X will be done in North Charleston, Long Beach, Philidelphia, Moscow(!) and Huntsville, Ala. Then came word that 737 work will be significantly ramped up in Renton.

Decisions about the final design, manufacturing of the wing and assembly of the 777X will provide much more information about Boeing’s future here. But in other areas, the company has been drawing down its Puget Sound workforce and moving assets elsewhere, relatively small but unsettling. We have one of the last concentrations of major manufacturing by a single company left in America and it represents a giant portion of good jobs and export trade.

Benign explanations are available: The company wants to spread its risks. It has excess capacity elsewhere. The Puget Sound retains a world-class aerospace cluster and Boeing has huge sunk costs here.

Darker theories also abound: CEO Jim McNerney hates Seattle and the unions. There is no more loyalty to Seattle with the headquarters in Chicago. The old Seattle-centric engineering culture has been trumped by the bean counters and “shareholder value.”

Care to make a forecast for 10 years out?

Read on for some of the best business and economy stories of the week…and the haiku.

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Comments | More in Aerospace/Boeing | Topics: 737, 777X