Boeing's efforts to end a strike involving thousands of machinists hit a roadblock this week as the workers' union rejected the company's latest proposal, which included a 30% pay increase over four years. The International Association of Machinists and Aerospace Workers (IAM) accused Boeing of failing to negotiate in good faith, claiming that the proposal was presented directly to union members without prior discussions.
The company's offer, which it called "the best and final," also reinstated performance bonuses and promised enhanced retirement benefits. Despite this, union leaders remained unimpressed, stating the offer "missed the mark."
The dispute, now in its third week, has left over 30,000 Boeing workers on strike, halting production of key aircraft models, including the 737 Max, 777, and 767. With nearly 95% of union members initially rejecting Boeing's first offer, which included a 25% pay increase, workers have held firm in their demand for a 40% wage hike. "This tactic is a blatant show of disrespect to our members and the bargaining process," the union posted on X, formerly known as Twitter, referencing Boeing's decision to publicize the deal without union consultation.
In response, Boeing reiterated its commitment to working with the union. "We have bargained in good faith with the IAM since formal negotiations began in March," the company said in a statement to the BBC. However, the tension escalated as IAM refused to hold a membership vote before the company's Friday deadline, stating that the proposal does not adequately address the concerns of its members.
Boeing's latest offer includes upfront pay raises of 12%, followed by three annual increases of 6%. The package also doubles the value of a ratification bonus to $6,000 and maintains annual productivity-based bonuses. The company noted that under this proposal, the average annual salary of a machinist would rise from $75,608 to $111,155 by the end of the four-year deal. Despite these significant adjustments, the union remains critical, highlighting that the offer fails to restore traditional pension plans, a key sticking point for many workers. The pensions were eliminated a decade ago, a move that has fueled discontent within the workforce.
Striking workers have pointed to both pay and pension benefits as central reasons for their refusal to accept Boeing's proposals. In the union's initial vote, 96% of members supported strike action. Boeing's suspension of worker health insurance at the end of the month and its implementation of furloughs for nonunion employees have only intensified the situation.
Boeing's strike has already begun to impact the company's operations. The aircraft manufacturer generates much of its cash flow from the delivery of new planes, which has been disrupted by the strike. Production lines for the 737, 777, and 767 models have been temporarily halted, while work on the 787 model continues at a nonunion facility in South Carolina.
In an effort to mitigate financial losses, Boeing has introduced rolling furloughs for thousands of managers and nonunion employees, requiring them to take one week of unpaid leave every four weeks. Additional cost-saving measures include a hiring freeze and cuts to business travel and supplier spending.
Government mediators have been brought in to facilitate talks between Boeing and the union, but progress has been slow. The stakes are high for both sides. Boeing risks billions in lost revenue if the strike continues, further compounding the challenges the company has faced in recent years, including the 737 Max crisis and the impact of the pandemic on air travel demand. On the other side, striking workers are beginning to feel the financial pressure, with final paychecks issued last week and health insurance set to expire at the end of the month.
Boeing's final offer also included a pledge to build its next new airplane in the Seattle area, a key concession for union leaders. However, this provision has failed to sway rank-and-file members, who remain skeptical of the company's broader commitment to addressing their long-term concerns. "This proposal does not go far enough to address your concerns," the union said in a message to its members.
