Boeing Threatens to Pull 777X From Seattle in Labor Dispute

by Christopher Freeburn | November 8, 2013 10:13 am

Boeing Threatens to Pull 777X From Seattle in Labor Dispute

boeing777underbelly 300x217 Boeing Threatens to Pull 777X From Seattle in Labor DisputeOn Friday, Boeing (BA) signaled that it would consider other locations for building its new 777X jets if labor unions and local lawmakers don’t agree to deals to control labor costs and provide tax incentives, Reuters notes.

Boeing had negotiated a preliminary agreement with the International Association of Machinists, which is to be voted on next week. However, on Wednesday, some union leaders were quoted in local newspapers criticizing the contract offer, which lowers healthcare benefits.

The company indicated that if the union does not ratify the deal, it will begin exploring other locations to build the plane. “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,” a Boeing spokesperson said.

While Boeing traditionally assembles jets in the Seattle area, it could move production to southern states, where labor costs are lower.

The 777X, which has a list price of about $400 million per jet, has already generated strong interest from international airlines[1].

Shares of Boeing were flat in Friday morning trading.

Endnotes:
  1. has already generated strong interest from international airlines: http://investorplace.com/2013/10/emirates-airline-considers-record-breaking-30b-777-jet-buy/#.Unz-bJG1Kf0

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