Boeing’s labour force on the U.S. West Coast queued up on Thursday to cast their votes on a contentious new contract. Many voiced their demands for a strike, increasing the pressure on the aircraft manufacturer as it grapples with persistent production delays and rising debt.
Should the vote favour a strike, it could commence on Friday, marking a significant challenge for new CEO Kelly Ortberg, who took charge last month to restore confidence in the company following a January incident where a door panel detached from a nearly new 737 MAX mid-flight.
Approximately 30,000 workers involved in the production of Boeing’s 737 MAX, 767, and 777 jets in Seattle and Portland are voting on their first comprehensive contract in 16 years. Polling closes at 6 p.m. PT with results expected later in the evening, as announced by the International Association of Machinists and Aerospace Workers. If approved, the strike could begin at midnight.
🚨🚨BREAKING – Over 32k Boeing union workers with IAM in Washington will be on strike tonight at midnight. Members have rejected the latest offer from Boeing almost unanimously. 94.6% NO on contract, and 96% YES to strike. pic.twitter.com/tYzXC3GA0M
— On the Line (@laborontheline) September 13, 2024
The proposed contract offers a general wage increase of 25%, a $3,000 signing bonus, and a commitment to build Boeing’s next commercial jet in Seattle if the programme is launched within the contract’s four-year term. Despite IAM leadership backing the deal on Sunday, many workers have reacted negatively, demanding the initial 40% pay rise and criticising the loss of an annual bonus.
Outside the union’s Renton office, where Boeing manufactures its 737 jet, workers lined up to vote, some holding signs and chanting “strike.” Several workers expressed confidence that the majority would vote to strike, although over 20 declined to disclose their voting intentions. Union rules dictate that a two-thirds majority is required to sanction a strike. Without this, the contract will be implemented.
Josh King, a 36-year-old quality inspector, stated, “I’m ready to strike for as long as necessary to get what we deserve. A strike typically results in a better offer, not a worse one.” Evidence that preparations for a strike were already underway included a union member leaving Wednesday’s meeting with a placard reading, “On Strike Against Boeing.” Protests continued throughout the week in Seattle-area factories assembling Boeing’s MAX, 777, and 767 jets. One member shouted, “time to strike, baby!” after voting.
Boeing’s shares rose by 0.9% on Thursday but have fallen 36% this year due to safety, production, and debt concerns. A strike would exacerbate financial challenges and further delay aircraft deliveries to airlines already facing capacity shortages.
The potential duration of a strike remains uncertain. A prolonged strike would impact Boeing’s finances, hinder airlines dependent on its jets, and disrupt suppliers. TD Cowen estimated a 50-day strike could cost Boeing $3 billion to $3.5 billion in cash flow. The 2008 strike, which lasted 52 days, reduced revenue by about $100 million per day. S&P Global Ratings warned that an extended strike could delay Boeing’s recovery and affect its rating, which, alongside Moody’s, is currently one notch above junk status. UBS analysts noted a brief strike might not affect cash flow significantly, but a one- to two-month strike could lead to a $4 billion cash shortfall due to reduced deliveries.
Michael O’Leary, CEO of Boeing customer Ryanair, remarked that a strike could further delay aircraft deliveries but expected it to be brief. “We would like to see the labour agreement sorted,” he added.
A strike would present Boeing with several challenges, including negotiating at the bargaining table and securing factories with valuable, partially built planes without union workers. On Wednesday, Ortberg sent a letter urging workers to approve the deal, stating, “A strike jeopardises our shared recovery, erodes customer trust, and hinders our ability to shape our future together.”
Ortberg, along with Boeing Commercial Airplanes chief Stephanie Pope, visited the Everett and Renton assembly plants this week to discuss the proposed deal with workers. Boeing indicated that the average worker’s salary, currently $75,608, would rise to $106,350 by the contract’s end, excluding overtime. Boeing machine repair mechanic Harold Wilson expressed mixed feelings, wanting better pensions and wages for younger workers. “I think Boeing will be left struggling again,” he said.
What Other Media Are Saying
- AP News reports that Boeing’s 33,000 machinists in Washington state are voting on a contract that offers a 25% wage increase over four years, with a strike possible if not ratified by Thursday evening, potentially halting aircraft production.(read more)
- Scripps News reports that thousands of Boeing employees in Washington, Oregon, and California are voting on a new contract that includes a 25% pay raise over four years, with the union president recommending acceptance despite employee discontent over the lack of a pension restoration.(read more)
- The Washington Post reports that Boeing faces a massive strike as union workers vote on a contract that includes 25 percent pay increases over four years, with a damaging strike appearing increasingly likely.(read more)
Frequently Asked Questions
Here are some common questions asked about this news
When are Boeing workers voting on the new labor deal?
Boeing workers are voting on Thursday.
What is the required majority for Boeing workers to strike?
A two-thirds majority is required.
What are some key points of the proposed Boeing contract?
The contract includes a 25% wage increase, a $3,000 signing bonus, and a pledge to build Boeing’s next jet in Seattle.
What could be the impact of a Boeing worker strike?
A strike could delay plane deliveries, add financial strain, and cost Boeing up to $3.5 billion in cash flow.
What did new CEO Kelly Ortberg urge workers to do?
CEO Kelly Ortberg urged workers to accept the deal.
