Boeing workers prepare to fight for work on next 737

Fri Apr 29, 2011 2:59pm EDT

* Boeing unions aim to bid for 737 work

* Unions leaders, local pols say Boeing could solicit bids

* Boeing says does not know where next 737 would be built

By Kyle Peterson

CHICAGO, April 29 (Reuters) - Boeing Co (BA.N) is months from deciding how to update the next line of its best-selling 737 narrowbody airplane, but its Washington-based work force is already preparing a campaign to persuade the company to build the plane in that state.

The future of the 737 -- the short-haul workhorse for many airlines around the globe -- is front and center in the commercial aviation world as Boeing considers whether it should redesign the airplane or simply put a more fuel-efficient engine on the current model.

Boeing is still evaluating the needs of its customers, its capability to update the airplane and the costs involved. It has said it may build the next line outside of Washington's Puget Sound area, where the city of Renton been been home to the primary 737 assembly plant for more than 40 years.

There is a lot at stake for the tens of thousands of workers who crank out 737s at a rate of 31.5 a month.

"Ultimately, we want to be prepared to be able to show the company that we're a viable option, that we're the only option," said Tom Wroblewski, president of International Association of Machinists (IAM) union District Lodge 751 in Seattle.

As Boeing considers its path, all options remain on the table. Mike Bair, Boeing's head of single-aisle development programs, told Reuters in March that the choice of materials would help determine where the next 737 would be built.

The company may use carbon composites and an assembly strategy similar to that of the 787 Dreamliner, which made liberal use of a complex global supply chain.

"If the material set changes, then the supply chain probably won't look the same," Bair said. "But we haven't even come close to thinking about where we might build it or even who might build what."

Boeing declined to provide further comment for this story but has promised an update on the 737 plan later this year. The company's rival Airbus EAD.PA has already said it would re-engine its competing A320.

MOUNTING A CAMPAIGN

The local IAM unit and the Society of Professional Engineering Employees in Aerospace (SPEEA) Local 2001 are working with a group of Washington business leaders and state and local politicians on what eventually may be a bid to keep the work in the state.

The group, known as the Washington Aerospace Partnership, is spearheading an effort to lure aerospace work to Washington. A growing part of its mission is to ensure that the next version of the 737 is made in Washington state if the company were to solicit bids from work groups in other states.

Union leaders said that prior to the 787 program, Boeing's unionized workers did not have to bid against outsiders for work on Boeing programs.

Bob Drewel, executive director of the Puget Sound Regional Council, described the project as a reboot of an earlier mission to help Boeing win a $30 billion Pentagon order for 179 U.S. Air Force refueling planes.

He said the newest campaign is in the earliest stages and that there is no bid for the 737 work ready to present to Boeing.

"There is a conversation in place," Drewel said. "(The 737) is certainly part of the conversation and, frankly, a significant part of the conversation."

Local union leaders and politicians say they are keeping their ear to the ground for clues to Boeing's plan.

Ray Goforth, executive director of the local SPEEA unit, said he expects Boeing to start shopping for a work force to build the next 737 line in the next few months.

Talk within the industry is that the company will solicit bids from various states soon in hopes of cutting costs or possibly lowering tax rates, he said. Goforth said the decision by Boeing to redesign or re-engine the 737 likely would have no bearing on any company plans to solicit outside bids. It depends on Boeing's reasons for doing so, he said.

"Until the company announces what their asks are, I don't even know quite how to begin to put together a strategy" Goforth said. He said, however, that SPEEA would mount its own campaign as well as participate in similar efforts by IAM and the Washington Aerospace Partnership.

Renton Mayor Denis Law echoed that determination.

"We, as a region, are going to work very hard to make sure that they continue to build airplanes here for generations to come," he said.

BUTTING HEADS WITH UNIONS

Boeing has long acknowledged that the complexity of the 787 supply chain was partly responsible for a series of delays that has put the project three years behind schedule. But the company also blames a delay on a 58-day strike in 2008 by union workers over a contract dispute.

Following that strike, Boeing decided to establish its second 787 assembly line in South Carolina where non-union workers are less likely to disrupt assembly over disputes.

Earlier this month, the National Labor Relations Board accused Boeing of placing the second 787 line in South Carolina primarily to discourage union strikes, a protected activity. Boeing has said it would fight the NLRB complaint.

Boeing does not disclose the cost of producing a 737. Nor does it say how many workers are assigned to the project. The company plans to increase the production rate of the 737 to 35 in early 2012 and to 38 in the second quarter 2013.

(Reporting by Kyle Peterson; Editing by Phil Berlowitz)

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