Boeing machinists hold contract vote that could end 7-week strike

Unionized Boeing factory workers voted Monday on whether to accept a contract offer or continue a strike that has lasted more than seven weeks and has grounded production of most Boeing passenger planes.

A vote to ratify the contract ahead of Election Day would clear the way for a major U.S. manufacturer and government contractor to resume production of the planes. If members of the International Association of Machinists and Aerospace Workers vote to reject Boeing’s proposal for a third time, it would plunge the aerospace giant into even greater financial danger and uncertainty.

In its latest proposed contract, Boeing is offering a 38% pay increase over four years, as well as ratification and performance bonuses. IAM District 751, which represents Boeing workers in the Pacific Northwest, supported the proposal, which is slightly more generous than the one the machinists voted on nearly two weeks ago.

“Now is the time for our members to build on these gains and confidently declare victory,” the union district said as it planned Monday’s vote. “We believe asking members to continue on strike any longer would be wrong as we have had so much success. »

Union officials said they believe they got all they could through negotiations and a strike, and that if the current offer is rejected, Boeing’s future offers could be worse. They plan to announce the results of the vote late Monday.

Boeing says the average annual salary for machinists is $75,608 and would rise to $119,309 in four years under the current proposal.

Pensions were a key issue for workers, who rejected the company’s previous offers in September and October. In its new proposal, Boeing rejected a demand to restore a pension plan that was frozen nearly a decade ago.

If the machinists ratify the contract, which is currently pending, they will be back on the job by November 12, according to the union.

The strike began on September 13, when an overwhelming majority (94.6%) rejected Boeing’s offer of a 25% wage increase over four years, far less than the union’s initial demand for a 40% wage increase over three years.

Machinists voted against another proposal — a 35% raise over four years but still no pension renewal — on Oct. 23, the same day Boeing reported a third-quarter loss of more than $6 billion. However, the proposal received 36% support, up from 5% proposed in mid-September, leading Boeing executives to believe they were close to an agreement.

In addition to a slightly larger salary increase, the proposed contract includes a $12,000 contract ratification bonus, up from $7,000 in the previous proposal, as well as larger company contributions to employees’ 401(k) retirement accounts.

Boeing also promises to build its next plane in the Seattle area. Union officials fear the company could refuse the bond if workers reject the new offer.

The strike has caught the attention of the Biden administration. Acting Labor Secretary Julie Su has intervened in the negotiations several times, including last week.

The labor standoff, the first strike by Boeing machinists since an eight-week strike in 2008, is the latest setback in a volatile year for the company.

Boeing is under multiple federal investigations after a door plug came off a 737 Max jet during an Alaska Airlines flight in January. Federal regulators have set limits on Boeing’s plane production that they say will remain in place until they feel confident the company can produce safely.

The door jam incident has renewed concerns about the safety of the 737 Max. Two planes crashed less than five months apart in 2018 and 2019, killing 346 people. The CEO, whose attempt to turn things around failed, announced in March that he was resigning. In July, Boeing agreed to plead guilty to conspiracy to commit fraud to defraud regulators who approved the 737 Max.

As the strike dragged on, new CEO Kelly Ortberg announced layoffs of about 17,000 people and stock sales to prevent the company’s credit rating from being downgraded to junk. S&P and Fitch Ratings said last week that $24.3 billion in shares and other securities would cover upcoming debt payments and reduce the risk of a credit rating downgrade.

The strike has created a cash crunch, depriving Boeing of the money it makes from delivering new planes to airlines. A strike at factories in the Seattle area has halted production of the 737 Max, Boeing’s best-selling plane, as well as the 777 or “triple seven” jet and a cargo version of the 767.

Ortberg acknowledged that Boeing’s credibility has waned, the company has too much debt and “serious shortcomings in our operations” have disappointed many airline customers. But he said the company’s strengths include its half-trillion-dollar aircraft order backlog.