Boeing machinists vote to strike after rejecting pay increases of 25% over 4 years
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Boeing-Labor Contract
International Aerospace Machinists union members march toward the union's hall to vote on a contract offer with airplane maker Boeing, on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)
DAVID KOENIG and MANUEL VALDES
Updated 6 min read
SEATTLE (AP) ā Machinists at Boeing voted Thursday to go on strike, another setback for the giant aircraft maker whose reputation and finances have been battered and now faces a shutdown in production of its best-selling airline planes.
The International Association of Machinists and Aerospace Workers said 94.6% of voting workers rejected the contract, which would have raised pay 25% over four years, and 96% approved the strike, easily surpassing a two-thirds requirement.
The strike by 33,000 machinists was set to begin at one minute after midnight Friday morning.
āThis is about respect, this is about the past, and this is about fighting for our future," IAM District 751 President Jon Holden said in announcing the vote.
Boeing responded that it was āready to get back to the table to reach a new agreement.ā
āThe message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the union," the company said in a statement.
Very little has gone right for Boeing this year, from a panel blowing out and leaving a gaping hole in one of its passenger jets in January to NASA leaving two astronauts in space rather sending them home on a problem-plagued Boeing spacecraft.
As long as the strike lasts, it will deprive Boeing of much-needed cash that it gets from delivering new planes to airlines. That will be another challenge for new CEO Kelly Ortberg, who six weeks ago was given the job of turning around a company that has lost more than $25 billion in the last six years and fallen behind European rival Airbus.
Ortberg made a last-ditch effort to salvage a deal that had unanimous backing from the union's negotiators. He told machinists Wednesday that āno one winsā in a walkout, and that a strike would put Boeingās recovery in jeopardy and raise more doubt about the company in the eyes of its airline customers.
āFor Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,ā he said. āWorking together, I know that we can get back on track, but a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.ā
Workers were in no mood to listen.
Holden said Ortberg faced a difficult position because machinists are bitter about stagnant wages and concessions they have made since 2008 on pensions and health care to prevent the company from moving jobs elsewhere.
āIt's hard to make up for 16 years,ā he said.
The vote was also a rebuke to Holden and union negotiators, who recommended that workers approve the contract offer. Holden, who predicted that workers would vote to strike, said the union will survey members to decide what issues they want to stress when negotiations resume.
Union members posted complaints about the deal all week on social media, often demanding bigger raises. On Thursday, several dozen blew whistles, banged drums and held up signs calling for a strike as they marched to a union hall near Boeingās 737 Max plant in Renton, Washington.
āAs you can see, the solidarity is here,ā said Chase Sparkman, a quality-assurance worker. āIām expecting my union brothers and sisters to stand shoulder to shoulder, arm in arm, and let our company know that, hey, we deserve more.ā
The machinists make $75,608 per year on average, not counting overtime, and that would rise to $106,350 at the end of the four-year contract, according to Boeing.
However, the deal fell short of the unionās initial demand for pay raises of 40% over three years. The union also wanted to restore traditional pensions that were axed a decade ago but settled for an increase in Boeing contributions to employeeās 401(k) retirement accounts.
Boeing worker Adam Vogel called the 25% raise āa load of crap. We havenāt had a raise in 16 years.ā
Broderick Conway, another quality-assurance worker and 16-year Boeing employee, said the company can afford more.
āA lot of the members are pretty upset about our first offer. Weāre hoping that the second offer is what weāre looking for,ā he said. "If not ... we're going to keep striking and stand up for ourselves.ā
The head of Boeingās commercial-airplanes business, Stephanie Pope, tried this week to discourage the blue-collars workers from thinking that a strike would result in a better offer from the company.
āWe bargained in absolute good faith with the IAM team that represents you and your interests,ā she said. āLet me be clear: We did not hold back with an eye on a second vote.ā
Voting took place at union halls in Washington state, Portland, Oregon, and a smattering of other locations.
Boeing believed it offered a significant benefit to the union by promising to build its next new plane in the Puget Sound area if workers ratified the contract. That plane ā not expected until sometime in the 2030s ā would replace the 737 Max. It was a key win for union leaders, who want to avoid a repeat of Boeing moving production of Dreamliners from the Seattle area to South Carolina.
The strike will stop production of the 737 Max, Boeing's best-selling airliner, along with the 777 or ātriple-sevenā jet and the 767 cargo plane at factories in Renton and Everett, Washington, near Seattle. It likely will not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.
TD Cowen aerospace analyst Cai von Rumohr said before the vote that it is realistic based on the history of Boeing strikes ā the last two were in 1995 and 2008 ā to figure that a walkout would last into mid-November, when workers' $150 weekly payments from the union's strike fund might seem low going into the holidays.
A strike that long would cost Boeing up to $3.5 billion in cash flow because the company gets about 60% of the sale price when it delivers a plane to the buyer, von Rumohr said.
Holden told members Monday the union got everything it could in bargaining and recommended approval of the deal "because we canāt guarantee we can achieve more in a strike.ā But many of the rank-and-file remembered the concessions on pensions, health care and pay.
āThey are upset. They have a lot of things they want. I think Boeing understands that and wants to satisfy a fair number of them,ā said von Rumohr, the aerospace analyst. āThe question is, are they going to do enough?ā
Boeing has seen its reputation battered since two 737 Max airliners crashed in 2018 and 2019, killing 346 people. The safety of its products came under renewed scrutiny after a panel blew out of a Max during a flight in January.
And now it faces a strike that could cause it to fall farther behind European rival Airbus in orders and deliveries of new jetliners.
