Boeing machinists vote to strike after rejecting pay increases of 25% over 4 years

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 its members rejected a contract that would have raised pay 25% over four years, then voted 94.6% to reject the contract and voted 96% to strike. A two-thirds vote among 33,000 workers was needed to strike.
“This 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.

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 warned machinists that a strike vote would put Boeing’s recovery in jeopardy and raise more doubt about the company in the eyes of its airline customers.

Workers were in no mood to listen.

Ortberg made a last-ditch effort to avert a strike, telling machinists Wednesday that “no one wins” in a walkout.

“For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” he said. “Working 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.”

Many union members have posted complaints about the deal all week on social media. On Thursday, several dozen blew whistles, banged drums and held up signs calling for a strike as they marched to a union hall near Boeing’s 737 Max plant in Renton, Washington.

“As you can see, the solidarity is here,” said Chase Sparkman, a quality-assurance worker. “I’m expecting my union brothers and sisters to stand shoulder to shoulder, arm in arm, and let our company know that, hey, we deserve more.”

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 union’s 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 employee’s 401(k) retirement accounts.

Although the bargaining committee that negotiated the contract recommended ratification, Holden predicted earlier this week that workers would vote to strike.

Boeing worker Adam Vogel called the 25% raise “a load of crap. We haven’t had a raise in 16 years.

Broderick Conway, another quality-assurance worker and 16-year Boeing employee, said the company can afford more.

“A lot of the members are pretty upset about our first offer. We’re hoping that the second offer is what we’re looking for,” he said. “If not … we’re going to keep striking and stand up for ourselves.”

The head of Boeing’s commercial-airplanes business, Stephanie Pope, tried earlier this week to discourage workers from thinking a strike would result in a better offer.

“We bargained in absolute good faith with the IAM team that represents you and your interests,” she said. “Let me be clear: We did not hold back with an eye on a second vote.”
Voting began at 5 a.m. local time at union halls in Washington state, Portland, Oregon, and a smattering of other locations.

A strike would stop production of the 737 Max, the company’s best-selling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Everett and Renton, Washington, near Seattle. It likely would not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.

TD Cowen aerospace analyst Cai von Rumohr said it is realistic based on the history of strikes at Boeing 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.
Union negotiators unanimously recommended that workers approve the tentative contract reached over the weekend.

Boeing promised to build its next new plane in the Puget Sound area. That plane — not expected until sometime in the 2030s — would replace the 737 Max. That was a key win for union leaders, who want to avoid a repeat of Boeing moving production of Dreamliners from Everett to South Carolina.

Holden told members Monday the union got everything it could in bargaining and recommended approval of the deal “because we can’t guarantee we can achieve more in a strike.”
Many union members, however, are still bitter about previous concessions on pensions, health care and pay.

“They are upset. They have a lot of things they want. I think Boeing understands that and wants to satisfy a fair number of them,” said von Rumohr, the aerospace analyst. “The question is, are they going to do enough?”

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.

By David Koenig and Manuel Valdes, Associated Press. Koenig reported from Dallas.