Boeing officials announced plans to assemble three Boeing 737 jetliners per month at its Long Beach, Calif., plant, and possibly as many as five a month.
Machinists union officials worked with the company to reach an agreement that would guarantee no loss of jobs in the Puget Sound area as a result of the shift of some assembly work to former McDonnell Douglas facilities.
"We have an agreement that provides job security for our 39,000 members," Bill Johnson, president of the district Machinists lodge, said at a news conference with Boeing officials.
The union earlier had threatened legal action if the company established a 737 assembly line in California.
Boeing's Long Beach factory workers belong to the United Auto Workers union.
"We are strategically aligning our operations in response to global business realities," said Boeing chairman and chief executive Phil Condit. "We are reducing costs."
Under the agreement reached late Wednesday, Boeing will begin producing 737s this fall at its Douglas Products Division in Long Beach.
But production of wings will remain in the Puget Sound area, and fuselage sections will continue to be built in Wichita, Kan. No layoffs will occur in the Puget Sound area as a result of the shift at least not until the union's contract expires in December 1999.
Despite the promise of no layoffs directly linked to the California work, Boeing already has said it anticipates cuts as part of its plan to reduce its work force by 18,000 to 28,000 people by the end of next year.
Boeing currently employs about 238,000 workers in 27 states, including about 118,000 in its commercial aircraft division.
By next summer, Boeing plans to assemble three 737s per month in California, possibly increasing to five by the end of 1999. The first planes assembled there would be a corporate-jet version of its 737-700.
The move has been prompted by production backlogs caused by a surge in jetliner orders over the past couple of years. Boeing acquired the Long Beach facility, which has about 9,000 workers, when it took over McDonnell Douglas last year.
Boeing previously announced plans to phase out three of the four McDonnell Douglas-model jetliners now built at Long Beach. A few 737s have already been sent there for final preparation work.
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