Boeing's future in Seattle is in doubt as it starts to pick up the pieces from the fourth major strike in 20 years by its assembly workers in the area.
"This is the exact opposite of a partnership between management and labor," said Richard Aboulafia, an analyst at Teal Group, an aerospace consulting group. "Both sides think the worst of each other. Boeing management's way out of it will be to move."
Boeing has been thinking about abandoning the Puget Sound area around Seattle for 20 years or more. The company moved its corporate headquarters to Chicago in 2001 and came close to locating its 787 Dreamliner assembly plant elsewhere.
In the end, Washington state induced Boeing to stay with a range of tax breaks and special programs. But repeated strikes, which have wasted 200 days of production in Seattle plants over the past two decades, have strained relations.
"The depths of the unhappiness of both Boeing with the union and the union people with Boeing just made it impossible for them to sit down and be rational," said Paul Nisbet at aerospace specialists JSA Research, talking about the latest negotiations.
The 27,000 members of the International Association of Machinists and Aerospace Workers rejected Boeing's first contract offer on September 3, and it has taken almost two months of sporadic talks to hit on a compromise.
Union members vote on the contract on Saturday and would return to work from Sunday night if they approve it.
"The two more or less broke even," said Nisbet, who reckons the whole strike was a waste of time, and probably pushed Boeing closer to leaving.
Boeing leaving Seattle entirely would be a huge blow to the area. Generations have worked well-paying jobs at the company's plants since William Boeing bought a shipyard in the city in 1910 and turned it into a plane factory.
Even though strikers won't make up in lump sum bonuses what they have lost in pay while on strike, union leaders say the walkout was necessary to preserve pay levels and job security for the next generation of workers.
But there is no guarantee there will be a next generation. Boeing has shied away from making any commitment to build what is expected to be its next new plane, the replacement for its top-selling 737, in the area.
"It's far too early to figure out where we are going to build a plane that we haven't designed yet," said chief executive Jim McNerney on the company's earnings conference call last week.
Airlines are pushing hard for a new, more fuel-efficient version of Boeing's strongest-selling plane, but the company doesn't see anything being produced until the end of the next decade.
McNerney paid tribute to the Seattle-area union workers, but didn't guarantee a lock on future jobs.
"The workers out in Puget Sound, represented by the IAM, are very fine workers," said McNerney on the conference call. "They do a good job and I'm anxious to get them back to doing a good job and they can compete for any work that we have got."
Plane-making is being "disaggregated" and made more mobile, according to the Teal Group's Aboulafia, as the supply chain is spread out.
"In the old days, when it was heavily in-house, heavily labor-intensive, you needed that large, experienced work force," he said. "That's no longer true."
The future of the industry is already being pioneered by Boeing with the 787, by outsourcing production of the parts across the world, and focusing on putting the pieces together, said Aboulafia.
Doing that makes it much easier to move production sites, with fewer people and less complex tooling. States where it is illegal to force workers to join a union -- such as Alabama, Texas and North and South Carolina -- are aggressively courting manufacturers like Boeing and rival Airbus to set up plants there.
Airbus' parent EADS had planned to build A330 freighters in Mobile, Alabama, but that is on hold after the Pentagon canceled a contract for aerial refueling tankers based on the aircraft.
Boeing already has an important aircraft plant in San Antonio, Texas and acquired a share of a plant making 787 structures in North Charleston, South Carolina from one of its suppliers this year.
Whether those plants, or new ones, will play a greater role in production is being debated at Boeing. In the meantime, the company and its Puget Sound workers are focusing on restarting work on planes for impatient customers.
"Short term, both sides lost," said Nisbet. "It'll take a couple of years to get back to where they would have been had they not had the strike."
