Boeing is on the edge of a potential production shutdown as thousands of its factory workers vote on whether to strike in response to a contract offer they find unsatisfactory. The vote, involving 33,000 members of the International Association of Machinists and Aerospace Workers (IAM), could lead to a walkout that would halt the assembly of some of the company's most crucial aircraft models, including the 737 Max, 777, and 767. The outcome of this vote is expected to be announced late Thursday night.
At the heart of the dispute is a contract offer from Boeing that includes a 25% wage increase over four years, which would bring the average annual salary of a Boeing machinist to over $106,000 by the end of the contract period. However, many workers are dissatisfied with the offer, feeling it falls short of their demands, particularly in light of the high cost of living in the Seattle area, where most of Boeing's manufacturing is based.
The contract also includes other benefits such as improved healthcare and retirement contributions. Despite these offerings, a significant portion of the workforce remains unhappy, particularly over the absence of restored traditional pensions, which were cut a decade ago. The union had initially sought a 40% pay increase over three years, a demand that was not met in the final agreement.
Boeing's new CEO, Kelly Ortberg, who has been in his role for just over a month, has made efforts to avoid a strike, emphasizing the critical juncture the company currently faces. "For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past," Ortberg wrote in a memo to employees. He stressed that a strike could severely jeopardize the company's recovery, which has been plagued by production delays and safety issues, including a door-panel blowout on a 737 Max earlier this year.
Ortberg's concerns are not unfounded. Analysts warn that a strike could cost Boeing up to $3.5 billion in cash flow if it extends into November, as the company receives about 60% of an aircraft's sale price upon delivery. A prolonged work stoppage could further damage Boeing's already bruised reputation and erode customer trust.
The vote represents a significant test for the new CEO and the company's relationship with its workforce. This is the first major contract negotiation for Boeing workers in 16 years, and it comes at a time when unionized workers across various industries, from Hollywood to automotive manufacturing, have successfully secured significant pay increases through strikes or the threat of them.
The union leadership, while recommending acceptance of the deal, has acknowledged the deep frustration among members. IAM District 751 President Jon Holden noted that while the union achieved as much as it could at the bargaining table, the decision to strike ultimately rests with the workers. "We recommended acceptance because we can't guarantee we can achieve more in a strike," Holden told union members, adding that the union would support whatever decision the members make.
If the contract is rejected and two-thirds of the workers vote in favor of a strike, the walkout would begin just after midnight on Friday. However, if the contract is rejected but does not garner enough support for a strike, the contract would automatically go into effect, according to union rules.
