30,000 or more Boeing Workers are set to strike on Friday, halting production of most of the company’s aircraft after employees overwhelmingly rejected a new labor contract.
It’s a costly development for manufacturers who have struggled to increase production and rebuild their reputations since the safety crisis.
Workers in the Seattle area and Oregon voted 94.6 percent against the tentative agreement announced Sunday by Boeing and the International Association of Machinists and Aerospace Workers. Workers voted 96 percent in favor of a strike, far exceeding the two-thirds vote needed to strike.
“We are striking at midnight,” IAM District 751 President John Holden said at a news conference announcing the vote. He called it an “unfair labor practices strike,” alleging that plant workers have been subjected to “discriminatory practices, coercive interrogation, illegal surveillance, and illegal promises of benefits.”
He said Boeing must negotiate in good faith.
Boeing had no immediate comment, but Stephanie Pope, CEO of Boeing Commercial Airplanes, told mechanics earlier this week that the tentative contract was “the best contract we could have ever offered.”
“In past negotiations, there was an idea that we had to hold something back so that we could ratify the deal in a second round,” she said. “This time, we talked about that strategy, but we deliberately chose a different path.”
Workers walk outside the Boeing manufacturing facility in Renton, Washington, U.S., Thursday, September 12, 2024.
M. Scott Brower | Bloomberg | Getty Images
The tentative offer included a 25 percent pay raise and other improvements to health care and retirement benefits, but the union had demanded a 40 percent increase. Workers complained about the deal, saying it did not cover the rising cost of living.
The vote is a blow to CEO Kelly Ortberg, who has been in the top job for five weeks. The day before the vote, he urged workers to accept the contract and not strike, saying it would jeopardize the company’s recovery.
Under the tentative agreement, Boeing committed to building its next commercial jet in the Seattle area, part of an effort to lure workers after the company shifted production of the 787 Dreamliner to a nonunion plant in South Carolina.
If approved, it would be the first fully negotiated contract for Boeing mechanics in 16 years. Boeing workers went on strike for nearly two months in 2008.
The ultimate financial impact of the strike will depend on how long it lasts.
Jefferies aerospace analyst Sheila Kahyaoglu estimated the 30-day cash impact of the strike could be $1.5 billion for Boeing, saying it “could destabilize suppliers and the supply chain.” She predicted the annual impact would be $900 million if the interim agreement goes through.
Boeing has lost about $8 billion so far this year and is racking up debt. Production has fallen short of expectations as the company struggles to iron out manufacturing flaws and faces industry-wide issues such as supply and labor shortages.
The explosions of a nearly new Boeing 737 Max 9 earlier this year have put federal scrutiny on Boeing’s production lines intensified.
