Boeing strike 2024: IAM union members strike early Friday after voting against proposed deal

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Union members at Boeing have overwhelmingly rejected a four-year contract with the struggling aircraft manufacturer, authorizing the company's first strike in 16 years, the International Association of Machinists (IAM) union said. About 33,000 workers are prepared to walk out of work. The strike is scheduled to begin early Friday morning.

The rejected deal, which union leadership called the best it had ever negotiated with Boeing (BA), would have provided wage increases of at least 25 percent over the life of the deal. It also increased job security for union members because Boeing had pledged to build its next commercial jet — the completion of which has not yet been announced — at a unionized plant. Without a contract containing that clause, Boeing could choose to build the plane at a non-union plant.

But 95 percent of members of the IAM union voted against the deal. In a separate vote, 96 percent voted in favor of a strike. This easily exceeded the two-thirds majority required for a strike.

The strike is scheduled to begin at 11:59 p.m. PT on Thursday or 2:59 a.m. ET on Friday. While it's possible a new contract could be negotiated in the remaining hours, given the anger of union members at the company, it seems unlikely the strike can be avoided.

“This is about fighting for our future,” said Jon Holden, president of the largest IAM union at Boeing, when announcing the vote. “We will return to the bargaining table whenever we can to advance the issues our members believe are important.”

Boeing did not immediately respond to a request for comment on the announcement.

Previous concessions and a series of problems at Boeing, including layoffs and the shifting of some work from a union assembly plant to the company's only non-union factory, had sparked widespread resentment against the company, so the vote against the contract was expected despite the content of the offer.

Kelly Ortberg, Boeing's new CEO, acknowledged earlier this week that members were angry about the previous contract terms, but urged union members to overlook that and vote for the deal.

“I know the response to our tentative agreement with the IAM has been passionate,” he wrote to staff. “I understand and respect that passion, but I ask that you do not give up the opportunity to secure our shared future because of the frustrations of the past.”

The strike, if it happens, would be just the latest blow to Boeing. Over the past five years, Boeing has struggled with countless problems, some tragic and many embarrassing. Most of them have proven financially devastating.

Two fatal crashes of the 737 Max, one in October 2018 and the other in March 2019, killed 346 people and led to a 20-month grounding of Boeing's best-selling aircraft and a halt to deliveries to fix a design flaw linked to the crashes.

Boeing then faced a host of other questions about the quality and safety of its planes. That criticism was compounded after a door stopper ripped off an Alaska Airlines 737 Max shortly after takeoff on January 5. Although no one was killed or seriously injured, the incident sparked numerous federal investigations, one of which found that the plane had left a Boeing factory without the four screws needed to hold the door stopper in place.

Boeing has since agreed to plead guilty to misleading the Federal Aviation Administration during the initial investigation into the Max. As part of its agreement with the U.S. Justice Department, the company must operate under the supervision of a court-appointed overseer.

A strike would have no impact on private travel. Boeing planes that have already been delivered to airlines and are currently in service around the world would continue to fly. However, the strike would lead to a delay in the delivery of the jets promised to airlines, thereby depriving Boeing of its main source of income.

Depending on how long the strike lasts, it could also cause problems for Boeing's nearly 10,000 suppliers, which are represented in all 50 US states. The company estimates its annual contribution to the American economy at $79 billion, which directly and indirectly supports 1.6 million jobs. Boeing employs nearly 150,000 US workers, including the 33,000 members of the IAM union.

The company has not reported an annual profit since 2018 and has accumulated cumulative operating losses of more than $33 billion through the second quarter of this year. Its credit rating has been downgraded to near “junk” status. Even before the strike, the company was not expected to return to profitability in the near future due to limited production output.

Boeing shares have lost more than 60 percent of their value over the past five years, and more than 30 percent since the Alaska Air incident earlier this year.

When announcing the tentative agreement on Sunday, Holden called it “the best contract we have negotiated in our history,” but the overwhelming backlash against the deal prompted him to change his statement in recent days.

Holden told members in a message Tuesday that union leadership had recommended workers accept the deal because it was the best that could be negotiated without a strike.

“We recommended acceptance because we cannot guarantee that we can achieve more with a strike,” he said in that message. “But that is your decision and a decision that we will protect and support no matter what happens. We have achieved everything we could in negotiations without a strike occurring. The members must take responsibility from now on.”

This is a developing story and will be updated.