After experiencing a strike by Boeing workers since September 13, the American aerospace company’s CEO, Kelly Ortberg, stepped into negotiations with the Machinists Union last week to issue a severe ultimatum.
The latest offering from Boeing to union members includes a 38% wage increase over the span of four years, which is an additional 3% raise on top of previous proposals. President of the Machinists Union District 731, Jon Holden stated that “these are life-changing wages,” stressing the significance of these unprecedented wage increases.
Should union members turn down Boeing’s current contract offer in the upcoming vote on November 4th, the CEO made clear that future offers may be less favorable and potentially impact future projects and employee financial benefits that the company has made a commitment to.
Holden stated that “the next offer will be regressive,” emphasizing Boeing’s potential cuts in wage increases, healthcare benefits, or local production plans.
The Machinists Union’s bargaining committee has encouraged members to accept Boeing’s recent offer, claiming it as a hard-won victory and marking an end to the 54-day strike, according to The Seattle Times. The strike has impacted production at Boeing’s Renton and Everett plants, halting the manufacturing of some of the company’s best-selling jets.
“It is time for our members to lock in these gains and confidently declare victory,” the union district said in scheduling Monday’s vote. “We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.”
Union officials hope members will think more favorably on Boeing’s third offer to avoid losing the momentum gained throughout negotiations and the strike, particularly given that the average annual pay for machinists, currently at $75,608, would rise to $119,309 in four years under the current offer, according to Boeing.
A Seven-Week Hit
The Boeing workers’ strike has been another setback for the American aerospace company, particularly when Boeing has already been experiencing a volatile year after they came under several federal investigations when a door plug blew off a 737 Max plane during an Alaska Airlines flight in January.
After the January incident, federal regulators put limitations on Boeing’s airplane production that were to last until they felt more confident about manufacturing safety—a factor that further contributed to Boeing’s ability to pull in money.
As most clients make the bulk of their payment upon receipt of the plane delivery, the strike has cost Boeing much-needed cash from these new plane deliveries, resulting in significant direct financial losses for the manufacturer. As the strike dragged on over the weeks, Ortberg announced about 17,000 layoffs and a stock sale to prevent the company’s credit rating from plummeting.
To illustrate the strike’s impact on Boeing, just two weeks in, the total estimated cost reached $1.4 billion, with nearly $1.1 billion borne by Boeing shareholders. The direct cost to Boeing employees was estimated at around $207 million.
By mid-October, the direct financial impact of the first month of the strike had grown severely, reaching $5 billion, with $3.26 billion of that affecting Boeing directly. The company has reported a third-quarter loss of more than $6 billion, a representation of the second-worst quarter in the manufacturer’s 100+ year history.
Reaching the End of the Rope
As Boeing experiences a tightening of its financial reserves, Ortberg’s involvement in the negotiations emphasizes the urgency for both sides to reach an agreement. The Machinists Union’s bargaining committee now sees last week’s IAM/Boeing Proposal for Contracts as the best move forward for all parties.
Union members will vote for the third time on Monday, November 4, 2024. According to a tweet from IAM Union District 751, there will be one ballot to either accept or reject the bargaining agreement.
Should the vote pass, union members looking to return to work as soon as possible can go back to work “as early as the first shift on Wednesday, November 6, 2024.” If all goes well, striking workers will be back to their workstations by the start of their shift on Tuesday, November 12, 2024.
