Boeing workers vote to strike over wage increases

SEATTLE (AP) — Machinists at Boeing voted for a strike on Thursday, another setback for the giant aircraft manufacturer, whose Call And Finance was badly damaged and is now facing a production halt on its best-selling aircraft.

The International Federation of Machinists and Aerospace Workers said 94.6% of voting workers rejected the Contractwhich would have resulted in a 25% wage increase over four years, and 96% voted in favor of the strike, well exceeding the required two-thirds majority.

The strike of 33,000 machinists was scheduled to begin at one minute past midnight on Friday morning.

“It’s about respect, it’s about the past, and it’s about fighting for our future,” said Jon Holden, president of IAM District 751, in announcing the vote.

Boeing responded that it was “ready to return to the negotiating table to reach a new agreement.”

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to members. We remain committed to resetting our relationships with our employees and the union,” the company said in a statement.

This year, things have hardly gone well for Boeing: In January, a passenger plane's panel burst, leaving a gaping hole, and NASA left two astronauts in space instead of sending them home in a problem-plagued Boeing spacecraft.

As long as the strike continues, Boeing will miss out on much-needed cash it gets from delivering new planes to airlines, which will be another challenge for the new CEO. Kelly Ortbergwho was appointed six weeks ago to restructure a company that has lost more than $25 billion over the past six years and fallen behind European rival Airbus.

Ortberg made a last-ditch effort to salvage a contract that union negotiators unanimously supported. On Wednesday, he told machinists that “nobody wins” in a walkout and that a strike would jeopardize Boeing's recovery and raise further doubts about the company in the eyes of airline customers.

“Boeing is no secret that our business is going through a difficult period, due in part to our own past mistakes,” he said. “I know that by working together we can get back on track, but a strike would jeopardize our collective recovery, further undermine our customers' confidence and impair our ability to shape our future together.”

The workers were in no mood to listen.

Holden said Ortberg is in a difficult position because machinists are angry about stagnant wages and concessions they have made on pensions and health insurance since 2008 to prevent the company from relocating jobs.

“It’s hard to make up for 16 years,” he said.

The vote was also a rebuke to Holden and the union negotiators who had recommended that workers accept the contract offer. Holden, who predicted that Workers would vote for a strikesaid the union would conduct a survey of its members to decide which issues to focus on when negotiations resumed.

Union members posted complaints about the deal on social media throughout the week, often demanding larger wage increases. On Thursday, several dozen union members chanted whistles, beat drums and carried signs in a strike as they marched to a union building near the Boeing 737 Max plant in Renton, Washington.

“As you can see, there is solidarity,” said Chase Sparkman, a quality assurance employee. “I expect my union brothers and sisters to stand shoulder to shoulder and arm in arm and make it clear to our company that we deserve more.”

The machinists earn an average of $75,608 a year, not including overtime. At the end of the four-year contract, this amount would rise to $106,350, Boeing said.

But the deal fell short of the union's original demand for wage increases of 40 percent over three years. The union also wanted to restore traditional pensions that were eliminated a decade ago, but agreed to an increase in Boeing contributions to employees' 401(k) retirement accounts.

Boeing employee Adam Vogel called the 25 percent pay raise “a bunch of nonsense. We haven't had a pay raise in 16 years.”

Broderick Conway, another quality assurance employee who has been with Boeing for 16 years, said the company can afford more.

“Many members are quite upset about our first offer. We hope that the second offer will meet our expectations,” he said. “If not … we will continue to strike and stand up for ourselves.”

Stephanie Pope, head of Boeing's commercial aircraft division, tried this week to dissuade workers from believing that a strike would lead to a better offer from the company.

“We negotiated 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 on a second vote.”

The vote took place in union halls in Washington state, Portland, Oregon, and several other locations.

Boeing believed it was giving the union a significant advantage by promising to build its next new plane in the Puget Sound region if workers ratified the contract. That plane — not expected until sometime in the 2030s — would replace the 737 Max. It was a major victory for union leaders, who want to avoid a repeat of Boeing's move of Dreamliner production from the Seattle area to South Carolina.

The strike will disrupt the production of the 737 MaxBoeing's best-selling plane, along with the 777 or “triple-seven” jet and the 767 freighter at factories in Renton and Everett, Washington, near Seattle. It will likely have no impact on Boeing 787 Dreamliners, which are built by non-union Workers in South Carolina.

Cai von Rumohr, an aviation analyst at TD Cowen, said before the vote that given Boeing's history of strikes – the last two were in 1995 and 2008 – it was realistic to expect a walkout to last until mid-November, at which point the $150 weekly payments from the union's strike fund might seem low to workers ahead of the holidays.

Such a long strike would cost Boeing up to $3.5 billion in cash, as the company receives about 60 percent of the sales price when the aircraft is delivered to the buyer, von Rumohr said.

Holden told his members on Monday that the union had achieved all it could in negotiations and recommended approving the deal “because we cannot guarantee that we can achieve more in a strike.” But many of the union members remembered the concessions on pensions, health insurance and wages.

“They're angry. They have a lot of requests. I think Boeing understands that and wants to satisfy a lot of them,” said the aviation analyst von Rumohr. “The question is, will they do enough?”

Boeing's reputation has been ruined since two 737 Max aircraft Planes crashed in 2018 and 2019, in which 346 people died. The safety of its products was re-evaluated after Panel is burned out of a Max during a flight in January.

And now the company is facing a strike that could cause it to fall even further behind its European competitor Airbus in terms of orders and deliveries of new aircraft.

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Koenig reported from Dallas.