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December 13, 2013

Boeing issues statement on IAM talks, plans South Carolina expansion activities

Boeing and the International Association of Machinists & Aerospace Workers District 751 have completed a third day of meetings following an attempt last month to secure a contract extension.

Dec. 12, in response to a proposal presented Dec. 11 by the union to secure 777X work in the Puget Sound region, Boeing presented a best and final counterproposal. That offer was rejected by the union leadership.

Boeing’s revised 8-year contract extension would have built on the company’s previous offer with substantial economic improvements. On top of the previous $10,000 signing bonus, employees would have received an additional lump sum bonus of $5,000. Employees also would have received additional dental benefits.

The proposal would have kept in place the current rate in which employees accelerate to the top of the pay scale – commonly referred to as “ZOOM.”

The company would have committed to placing final assembly of the 777X, as well as the fabrication and assembly of the airplane’s composite wing, at a Boeing location in the Puget Sound area. In addition, a separate agreement committing final assembly of the 737 MAX at the Renton, Wash. site would have been extended through 2024.

As previously proposed, the long-term contract extension would have included changes to the way members earn future retirement benefits. Employees would keep everything they have accrued under the existing defined benefit plan and earn future benefits under a defined contribution plan with the new Special Company Retirement Contribution, starting November of 2016.

“We entered these discussions to address the concerns we were hearing from our employees,” said Ray Conner, president and CEO, Boeing Commercial Airplanes. “We’ve listened to the union leadership and had an open dialogue in hopes of moving toward each other. Unfortunately the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership.”

The 777X site selection process has continued in parallel with this week’s IAM meetings. In an overwhelmingly strong response from interested participants, Boeing has received proposals from 22 states, many of which submitted multiple sites for consideration. A total of 54 sites are now being evaluated in the next critical stage of the process.

Boeing plans South Carolina expansion activities

Boeing announced Dec. 13 that it will begin construction in the second half of 2014 on a new paint facility on its main campus in North Charleston, S.C.

The company expects to begin painting fully assembled 787 Dreamliners in South Carolina in mid-2016.

The approximately 230,000 square-foot (21,368 m2) facility will be used to apply customer liveries to Boeing South Carolina (BSC)-built 787s. Today all BSC-built 787s are flown to Fort Worth, Texas, for final paint and then flown back to South Carolina for customer delivery.

“Painting our airplanes in South Carolina supports our Lean manufacturing and production optimization initiatives,” said Jack Jones, vice president and general manager, Boeing South Carolina. “We can make our delivery process even more efficient by painting airplanes here in South Carolina, creating more value and convenience for our customers.”

The company also announced today that it acquired access to a total of 468 acres (189 hectares) in North Charleston, S.C., to protect for potential future growth in South Carolina through a long-term lease with Palmetto Railways, a division of the S.C. Department of Commerce. In addition to the 267 acres (108 hectares) sold by the Charleston County Aviation Authority, another 201 acres (81 hectares) of land in North Charleston were purchased with state bond funds allocated to Boeing. Owned by Palmetto Railways, the land will be leased to Boeing under a long- term lease. The company has an option to purchase all of the 468 acres (189 hectares) at the end of the initial lease term at the end of 2027.

“This expansion makes future growth in North Charleston possible. While we expect to begin the permitting process immediately for this property, we have no specific plans for the land other than where we will locate the new paint facility,” said Jones.

As part of the site expansion, beginning in January 2014, Boeing will construct a new 10,000 square-foot (929.03 m2) fully equipped fire station at its main campus, which is expected to be operational by late 2014. The company will add a second autoclave in 2016 to support aftbody composite fabrication for previously announced 787 program rate increases.

“We’ve been busy here in South Carolina this year,” said Jones. “Our BSC teammates have not only been ramping to rate in component and airplane production, but they’re doing it in the middle of construction zones. Our commitment to South Carolina is visibly demonstrated every day as our growth and expansion continues. I don’t expect that ending anytime soon.”

Since late 2012, Boeing has been expanding its main South Carolina site to create more efficiencies and capabilities in production to meet committed 787 build rates. Under previously announced expansion plans, the company is adding 391,000 square feet (36,325 m2) to its aftbody fabrication and assembly building; 42,000 square feet (3,901.9 m2) to its aft and midbody component paint facility; 67,000 square feet (6,224.5 m2) in office and meeting space to its final assembly building; and a new 94,000 square-foot (8,732.9 m2) Dreamlifter Operations Center, to be completed in the first quarter of 2014. The midbody component assembly facility is undergoing construction to add additional capacity and efficiency on the production floor.

In 2013, Boeing announced plans to establish IT Centers of Excellence and an Engineering Design Center, along with plans to build a new Propulsion facility in South Carolina. In November, Boeing broke ground on the new 220,000 square-foot (2,0439 m2) facility located in Palmetto Commerce Park in North Charleston (Ladson area) that will house its new 737-MAX propulsion assembly work, scheduled to begin in mid-2015.




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