Boeing was losing $50 million per day. Then the air machinists ended their strike.
Factory workers at Boeing voted to accept a contract offer and end their strike after more than seven weeks, clearing the way for the aerospace giant to resume production of its bestselling airliner and generate much-needed cash.
Leaders of the International Association of Machinists and Aerospace Workers district in Seattle said 59% of members who cast ballots agreed to approve the company’s fourth formal offer and the third put to a vote. The deal includes a 38% wage increase over four years, and ratification and productivity bonuses.
However, Boeing refused to meet strikers’ demand to restore a company pension plan that was frozen nearly a decade ago.
The contract’s ratification on the eve of Election Day cleared the way for a major U.S. manufacturer and government contractor to restart Pacific Northwest assembly lines that the walkout idled for 53 days.
Bank of America analysts estimated last month that Boeing was losing about $50 million a day during the now-ended strike, which did not affect a nonunion plant in South Carolina where the company makes 787s.
Boeing CEO Kelly Ortberg said in a message to employees that he was pleased to have reached an agreement.
“While the past few months have been difficult for all of us, we are all part of the same team,” Mr. Ortberg said. “We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company.”
According to the union, the 33,000 workers it represents can return to work as soon as Oct. 6, or as late as Nov. 12. Mr. Ortberg has said it might take “a couple of weeks” to resume production in part because some workers might need retraining.
The average annual pay of Boeing machinists is currently $75,608 and eventually will rise to $119,309 under the new contract, according to the company. The union said the compounded value of the promised pay raise would amount to an increase of more than 43% over the life of the agreement.
“It’s time for us to come together. This is a victory,” IAM District 751 President Jon Holden told members while announcing the tally late Oct 4. “You stood strong and you stood tall and you won.”
Reactions were mixed even among union members who voted to accept the contract.
Although she voted “yes,” Seattle-based calibration specialist Eep Bolaño said the outcome was “most certainly not a victory.” Ms. Bolaño said she and her fellow workers made a wise but infuriating choice to accept the offer.
“We were threatened by a company that was crippled, dying, bleeding on the ground, and us as one of the biggest unions in the country couldn’t even extract two-thirds of our demands from them. This is humiliating,” she said.
For other workers like William Gardiner, a lab lead in calibration services, the revised offer was a cause for celebration.
“I’m extremely pumped over this vote,” said Mr. Gardiner, who has worked for Boeing for 13 years. “We didn’t fix everything – that’s OK. Overall, it’s a very positive contract.”
Union leaders had endorsed the latest proposal, saying they thought they had gotten all they could though negotiations and the strike. Along with the wage increase, the new contract gives each worker a $12,000 ratification bonus and retains a performance bonus the company wanted to eliminate.
“It is time for our members to lock in these gains and confidently declare victory,” the local union district said before the vote. “We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.”
President Joe Biden congratulated the machinists and Boeing for coming to an agreement that he said supports fairness in the workplace and improves workers’ ability to retire with dignity. The contract, he said, is important for Boeing’s future as “a critical part of America’s aerospace sector.”
Mr. Biden’s acting labor secretary, Julie Su, intervened in the negotiations several times, including when Boeing made its latest offer last week.
A continuing strike would have plunged Boeing into further financial peril and uncertainty. Last month, Mr. Ortberg announced plans to lay off about 17,000 people and a stock sale to prevent the company’s credit rating from being cut to junk status.
The strike began Sept. 13 with an overwhelming 94.6% rejection of the company’s offer to raise pay by 25% over four years – far less than the union’s original demand for 40% wage increases over three years.
Machinists voted down another offer – 35% raises over four years, and still no revival of pensions – on Oct. 23, the same day that Boeing reported a third-quarter loss of more than $6 billion.
The contract rejections reflected bitterness that built up after union concessions and small pay increases over the past decade.
The labor standoff – the first strike by Boeing machinists since an eight-week walkout in 2008 – was the latest setback in a volatile year for the aerospace giant. The 2008 strike lasted eight weeks and cost the company about $100 million daily in deferred revenue. A 1995 strike lasted 10 weeks.
Boeing came under several federal investigations this year after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January. Federal regulators put limits on Boeing airplane 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 had crashed less than five months apart in 2018 and 2019, killing 346 people. The CEO at the time, whose efforts to fix the company failed, announced in March that he would step down. In July, Boeing agreed to plead guilty to conspiracy to commit fraud for deceiving regulators who approved the 737 Max.
Washington Gov. Jay Inslee said the vote Oct. 4 puts Boeing’s future back on more solid footing.
“Washington is home to the world’s most skilled aerospace workers, and they understandably took a stand for the respect and compensation they deserve,” Mr. Inslee said in a statement congratulating the workers.
This story was reported by The Associated Press.
