Boeing factory workers are poised to walk off the job, crippling manufacturing across the planemaker’s Seattle commercial jet hub after members of its largest union rejected a contract offer and voted to strike.
The walkout, from midnight Friday, is the first since 2008 by the district of the International Association of Machinists And Aerospace Workers representing 33,000 Boeing workers across the US West Coast. It adds to the strain on the company, already reeling from the fallout over quality lapses after a near-catastrophe at the start of 2024 that spurred investigations, a customer revolt and an executive shake-up.
Members ignored a plea for peace by new Boeing chief executive Kelly Ortberg, who has vowed to reset labour relations. And they bucked the recommendation of their own union leaders that they accept terms that included a 25 per cent guaranteed wage increase over four years. While that’s the largest such pay hike ever offered by the plane maker, workers had expected a far greater increase. They were also angered that the terms also eliminated an annual bonus.
Boeing has been in a financially difficult situation since a January accident exposed deficiencies at its factories and forced the it to reduce production. The company has been bleeding cash as a result, and its credit rating is hovering one step above speculative grade, putting the firm in a difficult position as it contends with a heavy debt load of $45 billion (€40.6 billion).
The defeat at the hand of workers means that Boeing and IAM District 751 will need to head back to the negotiating table to try to find terms that satisfy members of a union with a long history of activism. Cai von Rumohr, an analyst at TD Cowen, estimates the walkout could run for more than 50 days, in line with previous strikes, clipping between $3 billion and $3.5 billion from Boeing’s cash flow.
Boeing has said its offer was the best it could put forward given its strained finances. The company hasn’t said how it would respond, but managers have been canvassing other workers this week to see if they have the skills to temporarily replace striking IAM members.
In the lead up to the late-night decision, IAM members outside of Boeing’s Renton factory where it builds 737 Max jetliners voiced anger at the offer and described the frustration of seeing wages stagnate under a long-term deal struck in 2014 that also eliminated pensions.
They’re also mad the company kept a provision that forces hourly workers to be on the job for six years before they reach the maximum pay categories.
“I’m working stupid amounts of overtime just to get by,” said Zachary Haley, a 737 quality assurance inspector who’s been with Boeing for five years. ---Bloomberg
