No woes at city Boeing plant

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BORIS MINKEVICH / WINNIPEG FREE PRESS Boeing Winnipeg GM Kevin Bartelson says the recent extension of the city plant's collective bargaining agreement is a positive signal to the head office. (WINNIPEG FREE PRESS) Photo Store

The faulty batteries that have grounded the new Boeing 787 Dreamliner are making headlines around the world, but it has not caused Boeing Canada Winnipeg's operations to break stride.

If anything, the plant is going all out just to keep up.

The airplane company's composite parts plant in Winnipeg is as busy as it's ever been and has laid the groundwork to stay very busy for many years to come.

Its Winnipeg workforce is over 1,600 -- the largest it's ever been -- and over the next month or so the company hopes to negotiate a new group of parts packages Winnipeg workers will make for the new 737 Max family of planes that is now in the design phase.

Kevin Bartelson, general manager for Boeing Winnipeg, said, "In general, we're very, very busy. There are lots of rate increases across many airplane programs coming up. This year alone, there are four more rate increases we'll have to negotiate."

The 737 is going from 31.5 per month to 37 this year and is projected to get up to 42 per month. The company still plans to double its production rate of the 787 from five per month now to 10 by the end of this year and into early 2014.

Bartelson said some of those rates are historic highs. But for the company to pull that off, its entire supply chain must ramp up to handle the larger workloads.

Just last week, the company and its unionized workforce in Winnipeg negotiated a landmark agreement to extend the collective agreement four additional years even though there were close to two years still left on the old agreement.

For the Winnipeg company, it means it can show the head office there is stability and labour peace so the Winnipeg operation can take on increasingly complex and more strategic jobs.

For the union and workers, it meant assurances from the company there would be plenty of work at least until the end of the newly extended contract period to June 2018.

One industry official, who asked that his name not be used, said, "I am not sure what the alternative would have been had they not been successful in extending the collective agreement. It was a key development."

The close to 1,200 CAW local 2169 workers got a $5,000 signing bonus, improvements in their pensions and a 10 per cent wage increase by the end of the contract.

Tom Murphy, the CAW's regional director in Manitoba, said, "It's a very good situation for us."

He said the CAW's national directors would not go along with such a large contract extension if there was not some sort of indication there would be new work coming in.

"Boeing committed to $50 million to $80 million in expansions," Murphy said. "There is new work coming on the 737 project. That's why the extension took place."

The Winnipeg plant -- which is the largest composites manufacturing plant in Canada and one of the largest in the world -- has been evolving into a more sophisticated manufacturing operation ever since it won the design and engineering contracts for the wing-to-body fairings on the 787.

It makes about 1,000 parts for seven Boeing models, but increasingly it is concentrating on more technically difficult work.

"We are off-loading the simple stuff that we have matured and stabilized over time and taken on more complicated stuff," Bartelson said. "That's the role we play at Boeing. We can get the simple composite parts built in many places around the world, but there are very few people who can do the complex work we can do."

That kind of skill set means Boeing Winnipeg is the place to design and build the new fairings needed to attach new engine models and other propulsion-area parts for the new 737 Max.

Global demand forecasts are for as many as 34,000 new planes worth about $4 trillion over the next 20 years.

Increased air travel in Asia and the Middle East means those are the markets for increased airplane sales. Manufacturers such as Boeing agree to invest in those countries, just as it agrees to invest in Canada when Canadian companies (or the government in military deals) buy Boeing planes.

That's partly why Boeing Winnipeg does not intend to exceed its current workforce levels as more simple parts that were once built here are let go and might more likely be built in one of those emerging markets where new planes are being purchased.

It's why Boeing Winnipeg's strategy to move to more complex designs and production technologies is a winner.

Ken Webb, president of the Manitoba Aerospace Association said, "The extension of the labour contract and other developments are helping Boeing Winnipeg put its ducks in a row to participate in significant growth in production that Boeing is forecasting for the next several years."

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 30, 2013 B5