In previously secret talks, Boeing and the Machinists union are working to clinch a deal to build the 777X jet in the Puget Sound area in exchange for a long-term labor contract.
"We're at a serious point in the talks," said Tom Buffenbarger, national head of the International Association of Machinists (IAM). "It's getting to a point where the members decide."
If a deal is reached, it's likely that final assembly of the forthcoming 777X jet will be in Everett and fabrication of its giant composite wing will be done somewhere nearby.
In a phone interview Monday afternoon, Buffenbarger said he hopes a deal will be agreed within 24 to 48 hours.
The proposal would then be put to a vote by nearly 31,000 Machinist union members in Washington state and another 1,500 in Portland, Ore.
"I don't know how fast things move," Buffenbarger said. "People are seriously considering all the options. ... The members have the final say."
Boeing confirmed talks are in progress but offered no further comment.
Alex Pietsch, director of Washington state's aerospace office, said Monday that Gov. Jay Inslee is "hopeful the parties can come to an agreement."
Despite widespread concern that Boeing might shift 777X assembly work outside Washington state, many industry experts say the Everett plant that builds the current 777 has considerable advantages in skills and infrastructure.
Final assembly "will be in Puget Sound," San Diego-based aviation technical expert Hans Weber predicted categorically. He added that Boeing is most likely to put the wing manufacturing facility here too.
Details tightly held
Preliminary talks have been going on for some time, but formal negotiations began only last week.
Buffenbarger and IAM district Local 751 president Tom Wroblewski are leading the union side of the talks. Ray Conner, head of Boeing Commercial Airplanes, is leading the management side.
The talks are a replay of the successful negotiations two years ago, also led by Buffenbarger, Wroblewski and Conner, that produced a landmark extension of the IAM's contract through 2016 and secured for Renton the work of building the 737 MAX.
In those negotiations, Boeing management secured labor peace for five years. The union also agreed to drop its complaint with the National Labor Relations Board (NLRB) that threatened to derail Boeing's 787 final assembly line in North Charleston, S.C.
Details of what is being offered and discussed this time are tightly held. One element is a long-term contract extending into the next decade, said a person with knowledge of the details.
A local Boeing executive, speaking on condition of anonymity, said that Commercial Airplanes chief Conner is focused tightly on reducing costs because aggressive competition from Airbus has been stealing market share from Boeing.
This executive said Boeing's local leadership "has a lot of loyalty toward Washington."
"People have family, brothers, sisters here," the executive said. "We are living here. We want everything to prosper. But it's finding the magic formula. Long term, we have to make sure our cost base is competitive."
Puget Sound favored
The 777X is a proposed new variant of today's 777 that will retain the same metal fuselage but add new engines and new carbon fiber-reinforced plastic composite wings. The plane is expected to be launched at next month's Dubai Air Show and to enter service around 2020.
In recent weeks, news stories have circulated promoting South Carolina as a likely alternative to Washington state for the 777X work.
And soon after Reuters first broke news of the secret talks early Monday, Loren Thompson, a defense analyst at the Lexington Institute who receives funding from Boeing, posted a story asserting that Boeing is also considering Long Beach, Calif. as an assembly site.
However, the tidbits feeding such reports are likely part of negotiation brinksmanship, as Boeing tries to convince the union that the company has other viable options if the union doesn't come to an agreement.
Weber sees Long Beach as all but out of the question for building the enormous wings of the 777X, which will require a completely new composite fabrication facility.
"California is so business unfriendly it's unrealistic that it would be feasible to establish a new manufacturing facility to build the wing in Long Beach," said Weber.
Weber, concurring with many aerospace experts consulted by The Seattle Times, said Washington state is the heavy favorite to win the 777X work.
Final assembly of the current version of the 777 in Everett has been transformed over the years into a highly efficient moving line.
Because the 777's metal fuselage will change little for 777X, much of the final assembly process will be unchanged.
Transfer of 777X final assembly to some new place with a new group of workers would add not only cost but risk to the project, experts say.
If Everett retains final assembly -- very likely to be placed in the assembly bay adjacent to the current 777 line -- then putting the new wing facility somewhere nearby is also likely for logistical reasons.
The 777X will have a wing span of 233 feet, making the wings the largest Boeing has ever built -- so large the wingtips will be designed to fold so it will fit at airport gates.
The wings of the 787, built by Mitsubishi Heavy Industries, are flown from Japan on the giant, purpose-built cargo planes Boeing calls Dreamlifters.
Several sources with direct knowledge say that Boeing is deeply dissatisfied with this method of transporting the wings and other 787 sections, because it has proved both expensive and a logistical challenge.
Boeing is "not so comfortable with keeping using the Dreamlifter for transport of the wing," said a well-placed source inside Boeing's Japanese industrial supply chain.
Although some have suggested Boeing might have the 777X wing also built in Japan, this source, speaking on condition of anonymity because Boeing won't allow suppliers to divulge such details, said Mitsubishi expects only to help Boeing develop the 777X wing and perhaps make some pieces of it.
"I believe the first choice would be final assembly of the wing close to final assembly of the whole aircraft," the Japanese source said.
This person also thought that North Charleston, S.C., is very unlikely to get the 777X final assembly or wing work.
Boeing South Carolina is "still struggling to increase the production rate of the 787," the source said, and so adding 777X would be "too much for them."
Aerospace expert Weber offered one more compelling reason for Boeing to choose Washington: its high-end composites expertise is here, not in South Carolina.
The first 787 wings were built in Seattle at Boeing's research plant on Marginal Way. Boeing's top composites experts people perfected the manufacturing method there, and taught Mitsubishi how to do it.
"Charleston has expertise in composite manufacturing, but Puget Sound is where all the basic manufacturing techniques were evolved and initially tested," said Weber. "That capability, that knowledge, resides with heaviest weight in Puget Sound."
Much at stake
For all those reasons, the Machinist union must think it has a strong hand in the talks and may believe that a Boeing threat to go elsewhere is a bluff.
However, in 2009, Boeing called the IAM's bluff when, after talks with the union failed, it chose to place the second 787 final assembly line in South Carolina.
It was that searing experience that two years later led the IAM to the deal that landed the 737 MAX in Renton.
And just last week, Boeing added to the region's anxiety by announcing that some detailed engineering work on the 777X would be farmed out to its smaller engineering groups around the country -- including both North Charleston, S.C. and Long Beach, Calif. -- and in Moscow, Russia.
It's clear that South Carolina must get some 777X work. In May, the South Carolina legislature passed a bill providing Boeing $120 million for site development in exchange for a promise of 2,000 additional jobs by 2020.
About half of those jobs are IT jobs transferred from here and elsewhere in the company. And Boeing has since then also announced it will place new engineering work in South Carolina, including design and build of the 737 MAX nacelles (the pods around the engines).
One analyst said South Carolina will very likely be awarded the design and manufacturing of the 777X nacelles as well.
Another industry supplier source agreed that's likely, saying that Boeing seems to want to build a center of excellence for nacelles in North Charleston. That would replace the in-house expertise that was lost when management in 2005 sold off its major parts plant in Wichita, Kan., now Spirit AeroSystems, which supplies the nacelles on the current 777.
This time around, there is even more at stake in the discussions between the IAM and Boeing than in the negotiations that won the MAX in 2011.
A recent analysis commissioned by the state and prepared by Seattle-based consulting firm Community Attributes estimates that just shy of 20,000 Boeing employees now work directly or indirectly on the 777 program.
Securing 777X would keep that work going for years. And the proposed new wing plant is an additional huge prize.
Boeing will have to invest something similar to what Airbus did in Wales, where it spent about $643 million to build a new composite wing plant for its rival A350 jet.
Pietsch, Washington's aerospace office director, said the state will continue to push its Boeing incentive package, including tax breaks extended until 2040, through the legislature in Olympia.
"We believe the work the legislature is doing will be an important part of the final decision," said Pietsch.
But the most important part is being hammered out between the company and the union behind closed doors.
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