US factory workers at the embattled planemaker voted overwhelmingly in favor of a strike. The industrial action comes after a series of high-profile safety issues on Boeing aircraft.
Boeing workers in the northwestern United States on Thursday voted overwhelmingly to strike after unions rejected new conditions including a 25% pay increase over four years.
The crisis-hit aviation manufacturing giant had characterized the new contracts as a good offer given the company’s current financial situation.
But 94.6% of hourly workers rejected the offer before 96% voted to strike from Thursday night.
“Our members spoke loud and clear tonight,” said Jon Holden, president of the International Association of Machinists and Aerospace Workers District 751 (IAM).
“This is about respect, this is about the past, and this is about fighting for our future. We strike at midnight.”
Boeing battling damaged reputation
A two-thirds vote among the 33,000 machinists was needed to call the industrial action, which represents another serious setback for Boeing, whose reputation and finances have been battered by a series of high-profile safety issues with its products.
Two of its 737 Max airliners crashed in 2018 and 2019, killing 346 people, before a panel blew out of another such plane during a flight in January.
And just last month, NASA opted to leave two of its astronauts at the International Space Station for six more months rather than send them back to earth on a problem-plagued Boeing spacecraft.
“It is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” said new CEO Kelly Ortberg, who only took on the job six weeks ago with Boeing have lost more than $25 billion in the last six years and fallen behind European rival Airbus.
“Working together, I know that we can get back on track, but a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.”
What were unions’ demands?
Ortberg made a last-ditch effort to avert a strike, telling engineers on Wednesday that “no one wins” in a walkout, but workers were unsatisfied with the company’s offer which would have seen annual wages increase by 25% from $75,608 per year on average to $106,350 by the end of the four-year deal.
“A load of crap,” said one Boeing worker, Adam Vogel. “We haven’t had a raise in 16 years.”
IAM had demanded a 40% wage increase over three years and a restoration of traditional pensions that were axed a decade ago, but had settled for an increase in Boeing contributions to employees’ retirement accounts.
“As you can see, the solidarity is here,” said Chase Sparkman, a quality-assurance worker, after a week in which union members had taken to social media to post complaints about the deal.
On Thursday, several dozen blew whistles, banged drums and held up signs calling for a strike as they marched to a union hall near Boeing’s 737 Max plant in Renton, Washington.
“I’m expecting my union brothers and sisters to stand shoulder to shoulder, arm in arm, and let our company know that, hey, we deserve more,” Sparkman added.
How long will the strike last?
According to Cai von Rumohr, an aerospace industry analyst at investment bank TD Cowen, the strike can be expected to last until mid-November, by which point workers’ $150 weekly payments from the union’s strike fund might seem low as the holiday season approaches.
In the meantime, however, the strike will halt production of Boeing’s best-selling airliner, the 737 Max, as well as its 777 jet, known as the “triple seven,” and its 767 cargo plane, all of which are built at factories in Washington.
It will likely not affect the company’s 787 Dreamliners, which are built by non-union workers in South Carolina.
Von Rumohr predicted that the strike could cost Boeing up to $3.5 billion in cash flow since the company receives about 60% of the sale price when it delivers a plane to a buyer.
