Boeing 787-881 N787BA (msn 40690) (ZA001) PAE (Brandon Farris), originally uploaded by Airliners Gallery.

Boeing’s (Chicago) largest labor union Wednesday (December 7) ratified a new four-year contract extension, ensuring the upcoming re-engined 737 MAX will be built in Washington State at Renton. The contract ratification likely also ends Boeing’s dispute with the National Labor Relations Board to open a second 787 production line at Charleston, SC.

Boeing issued the following statement:

“Boeing applauded the decision by members of the International Association of Machinists and Aerospace Workers (IAM) to approve a four-year contract extension. The agreement covers employees represented by the union in Washington, Oregon and Kansas, and extends the contract to September 2016.

The vote ratifies an agreement between the company and union that builds on an emerging spirit of cooperation and collaboration, and places production of the 737 MAX in Renton .

Boeing announced last week that the company would produce the 737 MAX in the existing Renton facility if IAM members ratified the tentative agreement.

To date, Boeing has received more than 700 commitments from customers for the 737 MAX. The new airplane is expected to enter service in 2017.

The contract calls for annual wage and pension increases in each of the four years of the agreement along with a one-time ratification bonus of $5,000, which employees will receive December 15.

It also introduces an incentive pay plan for hourly employees based on performance to metrics tracking safety, quality and productivity.

Health care plan changes include improvements in key benefits for IAM-represented employees, along with modest cost increases reflecting a desire to make benefits more comprehensive while moving toward a market-based payment plan that shares costs between the company and employees.

The agreement also establishes a Joint Council for the company and union to regularly discuss issues including workforce, market, competition and performance.”

Copyright Photo: Brandon Farris.