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Boeing exec: Selection process narrowing for 777X

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SEATTLE (AP) - A Boeing executive said Tuesday the company is narrowing its options as it searches for a place to build the 777X passenger plane. 

Boeing Commercial Airplanes CEO Ray Conner also told employees in a message that the machinists union's rejection of a new contract proposal that would have the planes built in the Puget Sound area was disappointing. 

"It was a rejection, plain and simple, and we now have to turn and face the reality of the union leadership's final decision," Conner said. 

Local union leaders have said they didn't see the point of bringing the latest offer to a vote because it was too similar to one that was previously rejected. Of particular concern, union officials balked at Boeing's insistence that workers move from a traditional pension plan to a 401(k)-style retirement plan. 

Conner said Boeing has received 777X proposals from 22 states covering 54 sites. The company is looking to narrow its options this week to "a handful" of sites, Conner said. 

Local union leaders have faced pressure in recent days for declining to put Boeing's last offer to a vote. Some Machinists in the Puget Sound are planning to rally Wednesday in favor of a vote, and political leaders have also said union members should have a chance to determine the fate of the contract offer. 

Production of Boeing's 777X would likely bring thousands of well-paying jobs to whatever region wins the work. The plane is a new iteration of its strong-selling 777, and the company recently received orders for 225 new 777X planes from three airlines at the Dubai Airshow. 

Boeing began offering the 777X in May, but it's still finalizing plans for the plane and aiming to deliver the first aircraft by the end of the decade. Boeing has said it is expected to carry as many as 400 passengers and be more fuel efficient than the current 777.

Below is the message that Ray Conner sent to employees.

 

"Over the course of the last several days, I've received hundreds of messages from members of our team with questions and comments about our meetings last week with IAM leaders and the status of the 777X site selection process. The vast majority have been thoughtful and considerate expressions of both concern and hope for the future.  

"With that experience in mind, I thought it would be helpful to provide the full team a few clarifying comments about the disappointing outcome of last week's talks and a quick update on the status of the 777X site selection process.   

"First, as we made clear in the statement we released last week, we agreed to re-engage with union leaders with the hope of reaching agreement on a contract extension that would place 777X final assembly and wing fabrication and assembly in Puget Sound. We responded to a proposal from the union with a best and final counterproposal that meaningfully improved the value delivered to IAM members over our prior offer and clarified points that some said were unclear in that earlier contract proposal. If ratified, our final proposed contract would have reinstated ZOOM, extended LOU-42 on securing 737 MAX production in Renton to 2024, improved dental coverage provisions, added an additional $5,000 lump sum in 2020, and better defined the 777X work that would be won as part of the agreement. 

"We were sincere in asking for the union leadership's commitment to support our improved final proposal as a tentative agreement that would be taken to a vote by IAM members with a recommendation for approval. However, that did not happen. The proposal was rejected in short order by IAM-751 leaders. Subsequently, some have asserted that we withdrew our proposal. That's not the case. We would not back away from an offer we made in good faith to our team. It was a rejection, plain and simple, and we now have to turn and face the reality of the union leadership's final decision. 

"Based on last week's outcome, we have now moved on to the next steps in the down select process for 777X work placement, which will be completed early next year. We received proposals from 22 states covering 54 sites. We are encouraged by the quality and magnitude of the response. Thanks to the diligent efforts of our evaluation team, this week we are narrowing that list down to a handful, from which our final decisions will be made. 

"Thank you for your patience and perseverance through all the attention this issue is getting in our community and in the media. We will continue to provide updates of our progress in the days and weeks ahead. Strengthening our Commercial Airplanes business for the short and long term will be guiding our decision making."

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