Boeing unions seek conditions on $8.7 billion in tax credits

NEW YORK (Reuters) - Boeing Co's two largest labor unions said on Wednesday they are working on a pair of legislative bills that would put conditions on $8.7 billion in tax credits that Washington state gave to Boeing and the state aerospace industry in 2013.

The tax credits were a condition of Boeing's decision to locate production of its 777X jetliner in Washington state, and altering them could change the business case for that decision.

Union leaders said they plan to introduce the bills in the current state legislative session, which began last week. One bill would specify the number of jobs Boeing must maintain in the state to receive the tax credits. A second bill would require companies that receive the credit to pay a "living wage," Larry Brown, legislative director of the International Association of Machinists District 751, told Reuters.

The machinists have teamed up with the Society of Professional Engineering Employees in Aerospace (SPEEA) to develop the measures, both unions said.

Since the legislature passed the tax credits in November 2013, Boeing's employment in Washington state has declined by more than 2,500 jobs, according to SPEEA, as Boeing has laid off workers and moved jobs to other states, in some cases to fulfill job requirements tied to those states' incentive packages.

Boeing declined to comment. It confirmed on Wednesday that members of its senior leadership would hold a private briefing with state aerospace industry leaders on Thursday to discuss what it called efforts to "roll back or significantly modify this valuable economic tool that supports nearly 250,000 jobs in Washington."

The company said the briefing was "aimed at ensuring the state's aerospace tax incentives are maintained."

Washington state tax credits to Boeing, and government aid to European rival Airbus Group , are part of the world's largest trade dispute, which has played out over a decade through the World Trade Organization.

In May, the European Union said it may challenge Washington state's $.87 billion in tax credits.

The EU and U.S. both claimed victory in the dispute in recent years after the WTO ruled against billions of dollars of support for both plane makers. But new aircraft developments by both companies have sparked fresh disputes.

(Reporting by Alwyn Scott; Editing by Bernard Orr)

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