- Boeing reached a tentative deal with over 30,000 union workers.
- It includes a commitment to build Boeing's next airplane in the Seattle area.
- That matches up with Boeing's new CEO's plans to be based at the planemaker's historic home.
Boeing's new CEO chalked up another win with Sunday's tentative union deal, but one detail stands out most: the commitment to building its next airliner in the Seattle area.
Kelly Ortberg has been at the helm of Boeing for one month and has already faced difficulties like the Starliner fiasco and a problem discovered during 777X certification tests.
But he looks to have avoided a crisis by averting a potential strike by the International Association of Machinists and Aerospace Workers which represents over 33,000 Boeing employees.
The contract, which includes a 25% general wage increase, still needs to be ratified by union members at a vote on Thursday.
If approved, and Boeing starts building a new commercial plane over the four-year term of the deal, it will be built in the Seattle area — a key win for the union.
"We can honestly say that this proposal is the best contract we've negotiated in our history," union leaders said in a statement.
Wall Street also appeared to support the agreement, with Boeing's share price up 4% in pre-market trading.
Since 2001, Boeing had been leaning away from its historic home and manufacturing hub in the Pacific Northwest.
That year, it moved its headquarters to Chicago and then, in 2022, to Arlington, Virginia. Since 2021, the final assembly of the Boeing 787 Dreamliner program has taken place in South Carolina.
But after Ortberg took over as CEO on August 8, he told employees that he planned to be based in Seattle.
"Because what we do is complex, I firmly believe that we need to get closer to the production lines and development programs across the company," he added.
Amid the 737 Max crises that ousted Ortberg's two predecessors, critics questioned the distance between corporate bosses and the Seattle-area factory where the plane is assembled.
For some, it was proof that Boeing was more focused on profits and production speed than the quality of the airplane — something that former CEO Dave Calhoun acknowledged to be a fault.
In February, a month before Calhoun announced his resignation, The Seattle Times reported that Boeing's board shut down a shareholder's bid to move the HQ back to Seattle.
"Boeing became an industry leader in commercial aviation because of the close working relationship between manufacturing, engineering, and management," the shareholder reportedly said in his proposal.
Ortberg setting up in Seattle might not be a fully-fledged HQ move, but it sent the right signals to workers during a stressful time.
The prospect of the next commercial aircraft program being based there, too, implies a return to manufacturing excellence and a refocus on quality over speed and maximum profits.
