Boeing Workers Reject Labor Deal in Washington State Members of a union representing thousands of Boeing employees voted late Wednesday to reject a controversial labor deal that would have cut compensation but have kept assembly of the company's new 777X jets in Washington State, raising the chance that Boeing will move more production away from its traditional manufacturing base in the Seattle area. In a ballot that was seen as a bellwether for the state of organized labor in America, 67 percent of the members of the local branch of the International Association of Machinists and Aerospace Workers voted against the eight-year contract extension, according to a statement posted on the union's website. "We preserved something sacred by rejecting the Boeing proposal," Tom Wroblewski, the local president of the union, said in the statement. We've held on to our pensions and that's big. At a time when financial planners are talking about a "retirement crisis" in America, we have preserved a tool that will help our members retire with more comfort and dignity." Boeing, which last week had threatened to relocate assembly of the highly anticipated new jet model to other locations if the union contract failed to pass, expressed regret over the result. "We are very disappointed in the outcome of the union vote," Ray Conner, the president and chief executive of Boeing's commercial aircraft division, said late Wednesday in an emailed statement. Without the terms of this contract extension, we're left with no choice but to open the process competitively and pursue all options for the 777X. State legislators in Washington had on Saturday passed a measure extending nearly $9 billion worth of tax breaks to Boeing through 2040 with a goal of enticing the company to locate production of the 777X in Seattle's Puget Sound area, but that had been largely contingent on the union approving the contract extension. The labor deal, which would have taken effect from 2016 and run until 2024, had triggered fierce debate among union members for a number of reasons, including reduced pension contributions by Boeing and limits on pay raises to 1 percent every other year. Anticipating sales for its new 787 Dreamliners, which use lighter-weight materials and new engines to cut fuel costs, Boeing already built a second assembly line for that model in North Charleston, S.C.