Boeing Machinists Vote on Contract to End Seven-Week Strike

Boeing Machinists Vote on Contract to End Seven-Week Strike \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Unionized Boeing workers voted Monday on a contract proposal that could end a seven-week strike that has stalled production of major Boeing aircraft. The offer, which includes a 38% pay raise over four years and other benefits, was endorsed by union leaders but falls short of restoring pensions—a key issue. If accepted, workers would return to production on November 12, but a rejection could lead to prolonged financial and operational uncertainty for Boeing.

Boeing Workers Vote on Contract Amid Seven-Week Strike: Key Details

• Latest Contract Proposal: Boeing’s offer includes a 38% pay increase over four years, ratification bonuses, and increased 401(k) contributions.
• Union Support: IAM District 751, representing Boeing workers, backs the proposal, emphasizing progress achieved through bargaining and the strike.
• Pensions Not Restored: The new proposal does not include pension reinstatements, a major sticking point for some workers.
• Financial Strain on Boeing: The strike, which started September 13, has halted production of key models like the 737 Max, resulting in Boeing’s third-quarter losses exceeding $6 billion.
• Impact on Boeing’s Future: A vote to reject the contract could force further operational cuts, layoffs, and potential credit downgrades, while acceptance would resume airplane production.

Deep Look

As the seven-week strike by unionized Boeing factory workers heads into a critical phase, members of the International Association of Machinists and Aerospace Workers (IAM) are voting on a new contract offer. The outcome, expected late Monday, could determine the future of Boeing’s airplane production, which has been halted since mid-September, and impact the aerospace giant’s financial stability as it navigates this turbulent period.

Union-Boeing Tensions Over Pensions and Pay

The new contract proposal from Boeing includes a 38% pay raise spread over four years, along with ratification bonuses and larger company contributions to employees’ 401(k) accounts. This offer, slightly enhanced from previous proposals, comes after union members rejected two earlier offers in September and October, with the latter offering a 35% raise over four years but no pension restoration

While IAM District 751, which represents Boeing workers in the Pacific Northwest, supports the latest offer, some workers remain dissatisfied. Union representatives acknowledged that while they had achieved substantial gains through negotiation and the strike, Boeing is unlikely to reinstate pensions, which were frozen nearly a decade ago. In a statement, the union warned members that if the current proposal is rejected, any future offers from Boeing might be less favorable, adding urgency to the decision.

For many union members, the lack of a pension plan is a sticking point. Veteran machinist Theresa Pound, who has worked at Boeing for 16 years, said she voted “no” on Monday, just as she had in previous rounds, citing a lack of security for her future. “Adding 3% to the previous offer doesn’t change anything for my future,” she said. Conversely, Bernadeth Jimenez, who joined Boeing’s quality assurance team last year, decided to support the new contract offer, noting that she never anticipated a pension and was pleased with the proposed wage increases.

Production and Financial Stakes for Boeing

If ratified, the contract would allow Boeing’s factory workers to return to production by November 12, resuming the output of crucial models like the 737 Max and the 777 jetliner. The strike, which began on September 13 with a strong 94.6% rejection of an earlier Boeing offer, has significantly impacted Boeing’s cash flow, as new plane deliveries—a key revenue stream—have been put on hold. Boeing reported a third-quarter loss of over $6 billion, attributing part of this shortfall to the strike. Additionally, the halt has deprived Boeing of funds typically generated by delivering completed aircraft to its airline customers.

The financial impact of the strike comes amid broader challenges for Boeing, which has seen its stock value drop and its debt grow over the past year. Boeing’s new CEO, Kelly Ortberg, has implemented a series of measures to address these pressures, including planning around 17,000 layoffs and issuing new stock to raise $24.3 billion in capital. This funding aims to meet upcoming debt obligations and prevent a potential downgrade of Boeing’s credit rating to junk status.

In recent weeks, Boeing has faced additional scrutiny from federal regulators following incidents involving its aircraft. Earlier this year, a door plug blew off a 737 Max during a flight, prompting the Federal Aviation Administration to place limits on Boeing’s production, citing safety concerns. These setbacks add to Boeing’s ongoing efforts to restore confidence following the 737 Max crashes in 2018 and 2019, which resulted in 346 fatalities. Boeing’s legal and financial struggles intensified as the company agreed to plead guilty to conspiracy charges in a case involving misrepresentation to regulators.

Union Endorsement and Strike Background

The endorsement from IAM District 751 reflects what union leaders view as a balanced outcome following prolonged negotiations. Under the new proposal, Boeing has increased the contract-ratification bonus from $7,000 to $12,000, alongside slightly higher pay raises than earlier offers. Boeing has also made a commitment to build its next-generation passenger plane in the Seattle area, a pledge union officials fear may be rescinded if the contract is rejected. Acting Labor Secretary Julie Su intervened in the negotiations multiple times to facilitate talks, highlighting the strike’s importance to both sides and its potential impact on the U.S. economy.

The decision to support the contract has also been influenced by financial pressures on workers. Many striking machinists are feeling the pinch, as the strike began on September 13 and most received their last paychecks shortly after. Some workers, like Jimenez and Pound, had prepared for the possibility of a prolonged strike by working extra hours beforehand. However, with financial strain mounting, there is hope among union leadership that members will vote to ratify the agreement.

A Turning Point for Boeing’s Reputation and Financial Health

If the contract is accepted, Boeing could begin the slow process of regaining financial stability and resuming production after a period of considerable turbulence. Boeing’s commitment to raising wages reflects the company’s acknowledgment of the need to restore employee trust and meet the demands of its workforce. New CEO Ortberg has admitted that Boeing’s reputation has suffered in recent years and that the company faces “serious lapses” in its performance. However, he remains optimistic about Boeing’s strengths, particularly its substantial order backlog, which is estimated to be worth over half a trillion dollars.

In Everett and Renton, where Boeing’s largest production facilities are located, the atmosphere during voting was notably subdued compared to previous vote days. At a union hall in Renton, workers gathered around a burn barrel to stay warm while discussing their options, and signs discouraging vote-related campaigning had been relocated outside.

This labor dispute, Boeing’s first machinist strike since 2008, has drawn attention at the federal level as well. President Joe Biden’s administration has signaled concern over the strike’s effect on Boeing, a key defense contractor and a major U.S. employer. Federal officials have been actively engaged, with Acting Labor Secretary Su mediating several times. A prolonged strike could mean further economic impact, potentially affecting Boeing’s military contracts and the aerospace industry at large.

As the vote results are awaited, both Boeing and its workers are at a crossroads. A “yes” vote would not only end the strike but potentially signal a step toward rebuilding trust and productivity within one of the nation’s most critical manufacturing sectors. However, a rejection would continue the standoff, forcing Boeing to consider additional cost-cutting measures while adding further uncertainty to an already challenging year for the company.

More on US News

Boeing Machinists