There is one reason Boeing Co. is holding the mother of all economic development bake-offs for a new site to build its 777X assembly plant: Its Seattle-area labor union voted down pension cuts to build the planes there.
So what does that mean for St. Louis’ chances to win the prized factory, given that the Gateway City is a big labor town?
That depends on whom you ask.
Right-to-work advocates say Missouri’s pro-union reputation will knock St. Louis out of the box right from the start. Labor leaders say that’s baloney, that Boeing long has co-existed with unions and that workers will make concessions to win this huge job.
Industry analysts say both are partially right — the aerospace giant needs a skilled workforce to build its newest jet, but Boeing won’t want to pay too much for one. And the company, for its part, isn’t saying much of anything.
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Wherever the truth lays, the chase for Boeing’s 777X plant is shaping up as a test case for the role of unions in big-time economic development, and perhaps as a talking point in Missouri’s long-simmering right-to-work debate ahead of a possible ballot initiative next year. Is organized labor an asset that will draw world-class manufacturing? An expensive hassle that will chase it off? Or just a red herring?
The whole thing started when International Association of Machinists members in the Puget Sound last month shot down an eight-year contract that would have traded $2 billion in pension cuts for guaranteed work on the 777X, which is expected to be a Boeing flagship for decades. As it had threatened if they voted no, and despite its deep roots in Seattle, the company immediately started shopping the work to other places.
The chance to build the 777X has drawn avid interest from southern states like Texas and Alabama, places that are hungry to build their aerospace industries and where unions are scarce. And it’s drawn interest in the St. Louis area, where about 2,500 of Boeing’s current 15,000 employees are members of the same Machinists union — though in a different district with different contracts — whose members rejected the deal in Seattle.
Some in Missouri say that union affiliation hurts St. Louis’ chances.
In interviews and on social media, some conservative state lawmakers have pointed to the Machinists’ vote in Seattle as a concern here. And longtime right-to-work advocate Rep. Eric Burlison, R-Springfield, said Nixon is “wasting taxpayers’ time and money” by pushing an incentive package without putting accompanying changes to state labor laws.
“We are fooling ourselves if we think just throwing money at Boeing is going to bring production of the 777X to Missouri,” he said in a statement earlier this week. “Boeing walked away from an $8.7 billion incentive package that Washington offered as consolation for the state’s anti-competitive labor laws.”
And if Boeing picks a right-to-work state for less incentives than Washington was offering, Burlison said, that might be reason for Missouri to rethink its labor laws.
But the people pushing St. Louis’ bid say it’s a little more complex than that.
Boeing needs experienced aerospace workers to get the plant up and running quickly. Those people don’t exist in large numbers in very many places in the U.S., and where they do, they tend to be unionized. Having so many veteran machinists in St. Louis may actually help the region’s case, Missouri Gov. Jay Nixon told reporters Tuesday.
“One advantage we have is that Boeing knows they’ve got an organized workforce that has delivered the F-18 on time,” Nixon said. “I think they appreciate that.”
And the Hazelwood-based IAM District 837, which represents Boeing’s fighter-jet assembly workers here, has generally had better relations with the company than District 751 in Seattle. For their latest contract in 2011, workers here agreed to move away from a defined-benefit pension, which was a key sticking point in the Puget Sound negotiations. And the military planes they build are nearing the end of their production cycles, giving workers here extra incentive to make a deal for new work.
District 837 officials did not return calls seeking comment this week, but Michael Louis, secretary-treasurer of the Missouri AFL-CIO, said his sense is that they’re quite willing to talk with the company.
“They’re welcoming the opportunity to try to strike a deal with Boeing,” he said. “They have not seen an actual proposal yet, but there’s a strong willingness to sit down with the company and hopefully work something out.”
Nixon said Missouri would never have started down this road — pushing to create $150 million a year in new tax breaks — if he thought labor was going to be a hurdle. And while the governor didn’t want to speak for the union, which has publicly said little, he said he was confident they’re on board.
“We all saw what happened in Washington,” Nixon said. “There’s been a template from the very beginning on this. Everybody has gone in knowing what zone we had to get to in order to win.”
Still, St. Louis’ experienced workers don’t have experience building large commercial airplanes — a very different job from assembling fighter aircraft — and the company could take its pick of places where it doesn’t have existing IAM contracts to amend: Salt Lake City or South Carolina, Alabama or Texas. Even Long Beach, Calif., where Boeing has 3,000 people working on a soon-to-close C-17 assembly line, is under contract with the United Auto Workers, not IAM, a distinction which might make all the difference.
“You’d have to get inside (Boeing CEO) Jim McNerney’s mind to know how much all this matters,” said Scott Hamilton, a Seattle-based aerospace analyst. “But he’s so unhappy with the IAM (in the Puget Sound) that I can’t imagine he’d really want to hop in bed with the IAM someplace else.”
It might be union politics, more so than unions themselves, that help swing a decision, Hamilton said. He predicted that organized labor would find an 8,000-worker aerospace plant no matter where in the country it locates, noting that right-to-work Texas has strong airline unions, and even Alabama, should it house both its existing Airbus and new Boeing plant, would become a massive target for the IAM.
“Everywhere you go, you’ll run into a union either potentially or existing,” he said.
That means, he said, that Boeing will weigh a lot of factors — transportation networks and environmental regulations, taxes and utilities, work experience and labor costs — and not just the requirement of a union card.
“Right-to-work is one part of it, but it’s not the overriding factor,” Hamilton said. “After all, if the union in Seattle had approved the contract, the plane was going to be built here.”
