DUBAI (Reuters) - Boeing (BA.N) said it has no plans to reopen talks with a union representing Washington state workers who have rejected a labor contract linked to its newest jet and vowed it would “look very broadly” at where to build it.
Washington state machinists last week voted down a contract negotiated between Boeing and leaders of the International Association of Machinists (IAM) that would have kept production of Boeing’s profitable wide-body series in the Seattle area in return for lower benefits.
Boeing is keeping “all options open” on where to build the 777X and expects to make a decision “within the next several months”, Boeing Commercial Airplanes Chief Executive Ray Conner told a news conference on Saturday.
He was speaking on the eve of the Dubai Airshow where industry sources expect the U.S. planemaker to launch the latest version of the 777 jet with around 250 orders.
Asked whether Boeing was willing to go back into talks with the IAM after its members rejected the contract proposal, Conner said: “At this point we have no plans to do that.”
Conner said the Seattle area, where Boeing builds most of its jets, was not out of the race but that Boeing would look at other facilities including wings production in Japan, where the composite wing for the 787 Dreamliner is already made.
“The vote didn’t go the way we had hoped so we are now exploring all our options with respect to the 777X,” he said.
Responding to a reporter’s suggestion that the union felt the ball was in Boeing’s court to decide what to do next, Conner said: “I would say the ball is in their court.”
Boeing executives also rejected suggestions that the talks had been driven by a need to speed up the new plane in response to recent wins by European rival Airbus EAD.PA, saying it was sticking to plans to deliver the proposed jet in 2020.
“Going into this vote was not being driven by a need to accelerate the airplane,” Conner said.
“The timing of the airplane hasn’t changed: it has always been the end of the decade,” Conner said.
“The reason why we were moving forward with the negotiations is we have got to put brick and mortar in place to do the wing and maybe some other things,” he added.
“It is a pretty long cycle, particularly with the wing, and it is not something we have done before within the Puget Sound region or anywhere else except in Japan. That is why we needed to start the negotiations and find out where we were going to be. It was not being driven by anything other than that.”
IAM President R. Thomas Buffenbarger told Reuters in an interview on Friday the talks had been “on a very fast timeline that was being driven by the Boeing board making a decision to expedite development of the 777X”.
Marty Bentrott, Boeing’s senior vice president for international sales, told a separate news conference on Saturday that the aircraft would enter service in “mid-2020”.
Boeing officials declined to discuss orders lined up for the November 17-21 air show, but Bentrott said the 777X had been received “very positively” by all three major Gulf carriers, referring to Emirates, Etihad Airways and Qatar Airways.
Boeing expects to resolve reliability problems with its high-tech 787 Dreamliner within six months by rolling out changes to the aircraft’s software, he added.
Customers including Qatar Airways and Norwegian Air have complained about the plane’s reliability.
Bentrott predicted the Dreamliner’s latest version, the 787-10, would be part of the Middle East’s fast-growing fleet and said he was confident about prospects for the 737 MAX.
Industry sources expect heavy orders at the Middle East’s largest aviation gathering to include 30 Dreamliners and a 75-plane order for the 737 MAX, as well dozens of Airbus jets.
Reporting by Tim Hepher; Editing by Alison Williams