Boeing workers ‘ready to go on strike’ if demands unmet

Boeing’s United States West Coast factory workers stood in long lines to vote on Thursday on a much-criticised new contract, some loudly calling for a strike, piling pressure on the planemaker as it wrestles with chronic production delays and mounting debt.

A potential strike could start on Friday, which would be a big early blow to new CEO Kelly Ortberg, brought on last month to restore faith in the planemaker after a door panel blew off a near-new 737 MAX jet in midair in January.

Roughly 30,000 workers who produce Boeing’s 737 MAX, 767 and 777 jets in the Seattle and Portland areas are voting on their first full contract in 16 years.

Polling will close at 6pm local time (01:00 GMT Friday) and the result will be announced this evening, the International Association of Machinists and Aerospace Workers (IAM) said. If a strike is sanctioned, it could start at midnight.

The proposed deal includes a general wage increase of 25 percent, a $3,000 signing bonus and a pledge to build Boeing’s next commercial jet in the Seattle area, provided the programme is launched within the four years of the contract.

Although the IAM leadership recommended its members accept the deal on Sunday, some workers have responded angrily, with many arguing for the originally demanded 40 percent pay rise and lamenting the loss of an annual bonus.

‘Ready to go on strike’

On Thursday, a line of workers waiting to vote snaked along the street outside the union’s offices in Renton, the Seattle suburb where Boeing makes its best-selling 737 jet. Some held signs and others chanted “strike”. All of several Boeing workers who spoke to Reuters news agency said they were voting to strike, and were confident the bulk of union members would do the same, although more than 20 declined to say what they planned.

Under complicated union rules, two-thirds must vote in favour of a strike for the action to begin. With anything less than that, the contract will go into effect.

“I’m ready to go on strike for as long as necessary to get everything that we deserve,” said Josh King, a 36-year-old quality inspector. “Normally, a strike doesn’t bring a worse offer, it always brings a better offer.”

The US National Transportation Safety Board released this photo showing a gaping hole where the paneled-over door had been at the fuselage plug area of an Alaska Airlines flight in January [File: National Transportation Safety Board via AP]

In a sign some workers were already preparing for picket lines, one union member left the meeting on Wednesday carrying a placard under her arm that read: “On Strike Against Boeing.”

Workers have been protesting all week in Boeing factories in the Seattle area that assemble Boeing’s MAX, 777 and 767 jets.

One member wearing a high-visibility vest shouted, “Time to strike, baby!” as he exited the building after casting his vote.

Financial pain

Boeing shares are down 36 percent this year on concerns over safety, production and a $60bn debt burden. A strike would pile on the financial pain and add to delays in delivering planes to airlines already struggling with capacity shortages.

According to a note from TD Cowen, a 50-day strike could cost Boeing an estimated $3bn to $3.5bn of cash flow. The Boeing workers’ last strike in 2008 shuttered plants for 52 days and hit revenue by an estimated $100m per day.

Boeing faces multiple challenges if there is a strike. It will need to decide how to respond at the bargaining table, after saying it had offered everything it could, as well as secure factories full of extremely valuable, partially built planes, without union workers to do the job.

S&P Global Ratings said an extended strike could delay the planemaker’s recovery and hurt its overall rating. Both S&P and Moody’s rate Boeing one notch above junk status.

On Wednesday, Ortberg sent a letter to workers, urging them to approve the deal.

“A strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together,” the letter said.

The labour talks are a key test for Ortberg, who met with the union’s main negotiator after arriving in August with a pledge to improve labour relations and safety and ramp up production of Boeing’s best-selling 737 MAX passenger jet.

Ortberg and Boeing Commercial Airplanes boss Stephanie Pope hit the floor at the company’s jet assembly plants in Everett and Renton this week to talk with workers about the proposed deal, a source said. Boeing said that the average worker pay of $75,608 would grow to $106,350 by the end of the contract, excluding overtime.

A strike could also become an issue for airlines that depend on Boeing’s aircraft. Still, Michael O’Leary, CEO of Boeing customer Ryanair, said on Thursday that a strike could further delay aircraft deliveries, but added he believed that if it happened, it would be short. “We would like to see the labour agreement sorted,” he said.

Boeing machine repair mechanic Harold Wilson said he had mixed emotions about the contract and wanted to see better pensions and higher wages for younger workers:

“I think Boeing will be left struggling again.”