Boeing workers are voting Thursday on a new labor contract that could determine the company’s immediate future. The outcome of the vote has the potential to lead to a crippling strike, which CEO Kelly Ortberg warned would threaten the plane maker’s already fragile recovery.
The tentative agreement, unveiled Sunday by Boeing and the International Association of Machinists and Aerospace Workers (IAM), includes a 25% wage increase over four years, as well as improvements to healthcare and retirement benefits. Boeing also pledged to build its next aircraft in the Seattle area, following its controversial decision to move 787 Dreamliner production to a non-union plant in South Carolina.
A strike by Boeing’s US West Coast factory workers could start Sept. 13, as they vote on a labor deal. The proposed deal includes a general wage increase of 25%, a $3,000 signing bonus and a pledge to build Boeing’s next commercial jet in the Seattle area https://t.co/PcT9xaJPTh pic.twitter.com/fNXKStloHV
— Reuters Legal (@ReutersLegal) September 12, 2024
Despite these concessions, some workers are expected to reject the deal, citing rising living costs in the Seattle area and calling for larger wage increases. Workers in the union had originally sought a 40% wage hike, while the current proposal offers 25%, matching last year’s United Auto Workers deal with Ford, General Motors, and Stellantis.
This vote represents a key moment for Ortberg, who has only been in his role for a little over a month. He has been tasked with stabilizing Boeing’s production and addressing safety and quality issues after recent setbacks. In a note to employees, Ortberg acknowledged the strong reactions to the proposed contract, but urged workers not to “sacrifice the opportunity to secure our future together” over past frustrations.
Jefferies aerospace analyst Sheila Kahyaoglu estimated that a 30-day strike could cost Boeing $1.5 billion, with potential ripple effects on suppliers and supply chains. If the tentative agreement is accepted, it is projected to have an annual financial impact of $900 million.
IAM District 751 President Jon Holden expressed cautious support for the agreement, stating that the union achieved everything it could in negotiations. However, Holden emphasized that the decision to strike or accept the contract ultimately lies with the workers. “We recommended acceptance because we can’t guarantee we can achieve more in a strike,” Holden wrote to union members.
The contract, if approved, would be the first negotiated deal between Boeing and IAM workers in 16 years. It includes a wage increase that would raise top pay for machinists to $57.43 per hour, with cost-of-living adjustments potentially pushing the total increase to over 42%. Boeing reported that the average annual machinist salary of $75,608 would rise to $106,350 by the end of the four-year agreement.
🚨 Attention to all following the Boeing labor situation! 🚨 The factory workers union is about to vote on a potential strike. This decision could have huge ramifications for Boeing and the industry as a whole. Stay tuned for updates as this story contin… https://t.co/rPxZyD3oJ5
— Daily Dose Media (@_DailyDoseMedia) September 12, 2024
If the contract is rejected and two-thirds of workers vote in favor of a strike, work stoppages would begin just after midnight Friday in Washington state. If fewer than two-thirds of workers vote to strike, the contract would automatically take effect.
Ortberg stressed the importance of reaching an agreement to avoid jeopardizing Boeing’s recovery. “A strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together,” he said.
Polls for the vote are set to close at 6 p.m. PT.
Key Points:
i. Boeing workers are voting on a new labor contract that includes a 25% wage increase and improved benefits.
ii. Some workers are pushing for larger wage hikes due to rising living costs in the Seattle area.
iii. A strike could cost Boeing $1.5 billion and destabilize supply chains if two-thirds of workers vote in favor of a work stoppage.
iv. The contract would raise top machinist pay to $57.43 per hour, potentially increasing wages by over 42%.
v. Boeing CEO Kelly Ortberg has urged workers to approve the contract, warning that a strike could harm the company’s recovery.
Susan Guglielmo – Reprinted with permission of Whatfinger News
