Boeing machinists reject new contract, go on strike

More than 30,000 aerospace workers at Boeing will walk off the job on Friday after the vast majority of them rejected a tentative contract.

The International Association of Machinists and Aeronautical Workers announced the result on its website late Thursday evening after the completion of voting.

The union said its bargaining team would “regroup and begin planning the next steps to get an agreement that our members can approve.”

IAM boss Jon Holden said earlier this week that the provisional agreement was the best contract the union had ever negotiated.

Union leaders and Boeing (NYSE: BA ) reached a tentative deal on Sunday, but grassroots machinists immediately expressed unhappiness with it. The last contract was ratified 16 years ago. On Monday, workers rallied outside Boeing’s wide-body aircraft factory in Everett, Washington.

One of the biggest problems is payment. Boeing is offering a 25 percent pay increase over four years, but union members say that doesn’t include their current annual bonus. Boeing will also put more matching funds into a 401K retirement plan, but will not restore a pension plan that the machinists had and gave up in an earlier negotiation. The collective bargaining agreement would also change mandatory overtime so that workers would be required to work overtime and weekends less frequently and provide for a floating holiday. Workers will also be able to progress more easily through different job responsibilities.

The workers also complain that the pay increase is not high enough, that the pension has not been restored and that Boeing’s promise to build a future type of aircraft in the Puget Sound region only extends through the contract. Workers still feel betrayed by previous rounds of negotiations in which Boeing twice threatened to move jobs out of Washington.

If the strike is authorized and continues for a long period, the delivery of aircraft and components would stop. This would not have an immediate effect on airlines, but would exacerbate current aircraft inventory and further limit airlines’ ability to upgrade or expand their fleets to reach new markets.

A strike comes at a difficult time for Boeing, which has suffered years of losses due to regulatory restrictions following a series of accidents and injuries, as well as concerns about manufacturing quality and a safety culture that have slowed aircraft production rates . However, some analysts said a production shutdown now is not the worst outcome as airlines face overcapacity as travel demand falls and are not as eager to receive planes as last year last.

The story continues

A 10-week walkout in 1995 cost Boeing $100 million a day. The company has lost $27 billion since 2019.

FedEx pilots in the summer of 2023 rejected a labor agreement negotiated by union leadership and appear to have lost bargaining power since then. The air cargo market has weakened, and the pilot shortage that has allowed pilots at some passenger airlines to win substantial deals has finally eased, reducing pressure on FedEx to increase compensation beyond its target.

Boeing’s new CEO, Robert “Kelly” Ortberg, has been on the job for just over a month.

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