Boeing workers start vote on latest offer to end strike

If workers reject Boeing’s offer for a third time, it will plunge the firm into further financial peril, uncertainty.

Unionised factory workers at Boeing are voting on whether to accept a contract offer or to continue their strike, which has lasted more than seven weeks and shut down production of most Boeing passenger planes.

A vote to ratify the contract on Monday, the eve of Election Day, would clear the way for the major United States manufacturer and government contractor to resume aeroplane production. If members of the International Association of Machinists and Aerospace Workers vote to reject Boeing’s offer for a third time, it will plunge the aerospace giant into further financial peril and uncertainty.

In its latest proposed contract, Boeing is offering pay raises of 38 percent over four years, plus ratification and productivity bonuses. IAM District 751, representing Boeing workers in the US Pacific Northwest, endorsed the proposal, which is slightly more generous than the machinists voted down nearly two weeks ago.

“It is time for our members to lock in these gains and confidently declare victory,” the district leaders said in scheduling Monday’s vote. “We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.”

Union officials said they think they have gotten all they can through negotiations and a strike and that if the current proposal is rejected, future offers from Boeing might be worse. They expect to announce the result of the vote late Monday.

Key issues

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

Pensions were a key issue for workers who rejected the company’s previous offers in September and October. In its new offer, Boeing did not meet their demand to restore a pension plan that was frozen nearly a decade ago.

If machinists ratify the contract now on the table, they will return to work by November 12, according to the union.

The strike began September 13 with an overwhelming 94.6 percent rejection of Boeing’s offer to raise pay by 25 percent over four years – far less than the union’s original demand for a 40 percent wage increase over three years.

Machinists voted down another offer – 35 percent raises over four years, and still no revival of pensions – on October 23, the same day Boeing reported a third-quarter loss of more than $6bn. However, the offer received 36 percent support, up from 5 percent for the mid-September proposal, making Boeing leaders believe they were close to a deal.

In addition to slightly larger pay increases, the new proposal includes a $12,000 contract ratification bonus, up from $7,000 in the previous offer, and larger company contributions to employees’ 401(k) retirement accounts.

Boeing also promised to build its next airline plane in the Seattle area. Union officials fear the company might withdraw the pledge if workers reject the new offer.

A gaping hole where the paneled-over door had been at the fuselage plug area of Alaska Airlines Flight 1282, January 7, 2024 [File: National Transportation Safety Board via AP]

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

Volatile year

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

Boeing came under several federal investigations after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January. Federal regulators put limits on Boeing aeroplane production that they said would last until they felt confident about manufacturing safety at the company.

The door plug incident renewed concerns about the safety of the 737 Max. Two of the planes crashed less than five months apart in 2018 and 2019, killing 346 people. CEO David Calhoun said he would step down. In July, Boeing agreed to plead guilty to conspiracy to commit fraud for deceiving regulators who approved the 737 Max.

As the strike dragged on, new CEO Kelly Ortberg announced about 17,000 layoffs and a stock sale to prevent the company’s credit rating from being cut to junk status even as it dealt with a cash crunch from the loss of business. S&P and Fitch Ratings said last week that the $24.3bn in stock and other securities will cover upcoming debt payments and reduce the risk of a credit downgrade.