In a bid to end a nearly seven-week strike that has halted most of its aircraft production, Boeing has presented an enhanced contract proposal to its more than 32,000 striking machinists. This proposal, which includes a 38% wage increase over four years and an option for a $12,000 signing bonus, will go to a vote on Monday, potentially marking the end of the standoff between Boeing and its workforce.
The International Association of Machinists and Aerospace Workers (IAM) District 751, representing the striking workers, endorsed the new offer on Thursday and urged members to approve it. "In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor," the union stated. "We are at that point now and risk a regressive or lesser offer in the future."
The walkout, which began on September 13 after workers rejected an initial tentative agreement, has affected Boeing's production pipeline, particularly for its top-selling 737 MAX jets and other commercial aircraft. Boeing's previous proposals, including a 35% wage increase offer, had failed to meet worker demands, extending the strike. According to the union, the current deal now gives workers a choice between a one-time $12,000 ratification bonus or a $7,000 ratification bonus with an additional $5,000 401(k) contribution.
Boeing's CEO Kelly Ortberg has described the negotiations as a priority, especially amid the company's recent financial losses and operational challenges. "We've been feverishly working to find a solution that works for the company and meets our employees' needs," Ortberg said in a statement last week. Despite these efforts, a union-endorsed vote last week rejected the proposal by 64%, leaving the company to increase its offer to the current 38% wage hike.
IAM District 751 emphasized that prolonging the strike could harm the union's bargaining position. "Asking our members to stay on strike longer wouldn't be right as we have achieved so much success," the union stated. The union's support for the offer reflects the significance of the terms negotiated, especially in light of Seattle's rising living costs, where tech companies like Microsoft and Amazon have driven up housing and other expenses.
The union further highlighted the reinstatement of an annual bonus scheme, which was excluded from Boeing's previous proposals, as a major achievement in this negotiation. Additionally, by the end of the new contract term, Boeing estimates that average machinist pay will reach approximately $119,309.
Boeing has been facing substantial financial pressures, reporting a loss of over $6 billion in the last quarter. The strike has added to the company's challenges, delaying Boeing's plans to stabilize production after recent quality control issues, including a January incident involving a Boeing 737 MAX door plug failure. These issues have compounded Boeing's struggle to regain footing amid ongoing competition in the aerospace industry.
Union members, who have long advocated for a return to a defined-benefit pension, were not able to secure that element in the new contract. However, the 38% wage increase-up from Boeing's prior 35% offer-reflects a significant gain. Workers were pushing for a 40% raise, along with assurances for future job stability amid Boeing's production issues.
Monday's vote has significant implications, not only for Boeing's production capabilities but also for the wider labor landscape. The strike is expected to impact Friday's U.S. jobs report, underscoring the broader economic stakes of the labor standoff. Boeing shares have seen fluctuations throughout the negotiation period, dropping 3.2% earlier this week before rising 2.5% in after-hours trading following news of the endorsed proposal.
