September 23, 2015 / 12:38 AM / 4 years ago

Machinists vow to fight Boeing if China plant costs jobs

SEATTLE (Reuters) - The head of Boeing Co’s (BA.N) largest union pledged on Tuesday to fight for jobs threatened by a proposed factory in China, stepping up a confrontation over the plant just as China’s president visited the Seattle area.

Boeing's 737 manufacturing site is pictured with the Seattle skyline in the background in Renton, Washington February 26, 2014. REUTERS/Jason Redmond

The president of the local machinists union met company representatives after Boeing Chief Executive Dennis Muilenburg said the company planned to move work on its 737 aircraft to China, but added that there would be no related jobs lost in the United States.

The China plant, key to Boeing’s battle with rival Airbus Group (AIR.PA) for dominance of the Chinese market, could be announced as early as Wednesday when Chinese President Xi Jinping visits Boeing’s largest factory outside Seattle.

Boeing says China will need $1 trillion worth of new planes over the next two decades and analysts say a China plant deal would help the company win aircraft orders.

Jon Holden, president of the International Association of Machinists District 751, however, said any job moved out of Washington state, where most Boeing planes are built, would be a loss for American workers.

“It’s a tough pill to swallow to see our jobs being used as bargaining chips to win orders when we gave up so much for supposed job security,” Holden told Reuters in an interview. The union represents about 35,000 Boeing workers.

“This is not simply about China,” he said. “The company is creating capacity and capability outside the Puget Sound region. Those are our jobs.”

Holden said Boeing told him on Tuesday that the China facility would finish and paint narrowbody 737 planes built at its Renton, Washington, factory.

Last year, Boeing and the state aerospace industry won $8.7 billion in tax incentives for locating work in the state. As part of the agreement, the machinists approved a contract extension that ended their pension contributions. The agreements had no numeric targets for jobs and the union is trying to get state lawmakers to attach targets to the incentives.

“We’ll do everything we can legally and legislatively to protect our jobs,” Holden added.

Boeing and Airbus each supplied about half of the aircraft fleet operating in China. Airbus’ share has risen from 6 percent 20 years ago, an increase that analysts said was largely due to the plant it set up there in 2008 and which currently builds the A320 jetliner, a competitor to Boeing’s 737.

Machinist leader Holden said workers planned to hold Boeing to its commitments to keeping work in the Seattle area in exchange for union labor agreements and tax incentives.

In China, executives at Hongrun Construction Group Co (002062.SZ) and Zhejiang Reclaim Construction Group Co (002586.SZ) told Reuters they were aware of the Boeing project, but said it still needed Chinese government approval.

Reporting by Alwyn Scott; additional reporting by Yan Fang in Beijing; Editing by Lisa Shumaker, Cynthia Osterman and Miral Fahmy

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