Boeing Workers Reject Pay Deal: Strike Set to Begin Amid Growing Company Woes

• Sep 13, 2024

Boeing workers have overwhelmingly rejected a proposed deal that included a 25% pay rise, triggering plans for a strike starting Friday at midnight Pacific Time (0700 GMT). The strike involves more than 30,000 employees responsible for producing Boeing’s flagship planes, including the 737 Max and 777, across Seattle and Portland. This decision marks yet another setback for the aerospace giant, which is already grappling with financial difficulties and a damaged reputation following multiple safety scandals, including two fatal crashes.

The union representing Boeing’s workforce, the International Association of Machinists and Aerospace Workers (IAM) District 751, reported that nearly 95% of its members voted against the tentative agreement, with 96% supporting strike action. “Our members spoke loud and clear tonight,” said Jon Holden, IAM District 751 President, emphasizing the workers' frustration with the offer. “We strike at midnight,” he added, underscoring the union's determination.

Boeing acknowledged the rejection in a statement, saying, “The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.” Despite the setback, the company stressed its commitment to resetting relations with employees and the union, signaling a willingness to return to the negotiating table.

The rejected deal, which was initially backed by union representatives, offered a 25% pay increase over four years and a commitment from Boeing to build its next commercial plane in the Seattle area if the project commenced during the contract’s duration. However, workers had originally demanded a 40% pay rise, indicating the proposal fell far short of their expectations.

For newly appointed CEO Kelly Ortberg, this strike poses a significant challenge to his efforts to revitalize Boeing. Ortberg, who assumed leadership last month, warned employees ahead of the vote that a strike would jeopardize the company’s recovery. With Boeing already facing growing financial losses and a tarnished public image, the timing of the strike could have serious consequences. The last major strike, in 2008, cost the company around $1.5 billion a month, according to Moody’s.

The ongoing struggles are compounded by Boeing’s legal battles. In July, the company pleaded guilty to fraud charges and agreed to pay a criminal fine of nearly $244 million related to the fatal crashes of two 737 Max planes. Additionally, Boeing faces lawsuits and investigations over a door plug blowout on a new plane operated by Alaska Airlines earlier this year. Production issues are also mounting, as the U.S. Federal Aviation Administration has imposed a cap on 737 Max assembly lines, further slowing output.

Aviation experts, like Greg Waldron, Asia Managing Editor at FlightGlobal, note that the strike will be closely monitored by airlines awaiting deliveries of the 737 Max. The duration of the strike will play a critical role in determining the extent of its impact on Boeing and its customers.

With the current contract set to expire at midnight on Thursday, both sides will be under pressure to return to the bargaining table to avoid prolonged disruptions. However, given the deep dissatisfaction among workers, reaching an agreement may prove challenging.