Boeing strike threat looms as workers vote on contract By Reuters

By Joe Brock and Allison Lampert

SEATTLE (Reuters) – Workers at Boeing (NYSE: ) factories on the U.S. West Coast will vote on a much-criticized new contract and a possible strike on Thursday, putting pressure on the planemaker as it struggles with chronic production delays and with increasing debt.

A potential strike starting Friday would be a major blow to new CEO Kelly Ortberg, who was brought in last month to restore confidence in the planemaker after a door panel blew up a near-new 737 MAX in January.

Starting at 5 a.m. PT (1200 GMT), about 30,000 workers who make Boeing’s 737 MAX, 767 and 777 planes in the Seattle and Portland areas will vote on their first comprehensive contract in 16 years.

Voting will close at 6 p.m. PT, and the result will be announced this evening, the International Association of Machinists and Aeronautical Workers (IAM) said. If a strike is sanctioned, it could begin at midnight.

The proposed deal includes a 25 percent overall pay raise, a $3,000 signing bonus and a commitment to build the next Boeing commercial jet in the Seattle area, provided the program is launched within the four years of the contract.

Although IAM leadership recommended its members accept the deal on Sunday, workers responded angrily to the terms, with many arguing for the 40 percent pay increase initially demanded and lamenting the loss of an annual bonus.

Workers protested at Boeing’s Seattle-area factories that assemble Boeing’s MAX, 777 and 767 planes this week with pots banging and honking horns, two employees said.

Following a meeting to discuss the contract at the IAM office in Seattle on Wednesday, six Boeing employees told Reuters they would vote in favor of the strike and were confident most union members would do the same.

“I’m ready to go on strike as long as it takes to get everything we deserve,” said Josh King, a 36-year-old quality inspector, rejecting Boeing management’s claim that it had made the best possible offer.

“Normally a strike doesn’t make a worse offer, it always brings a better offer.”

In a sign that some workers are already preparing for picket lines, one union member left the meeting carrying a sign under his arm that read: “On strike against Boeing.”

THE FOLLOWING OF ORTBERG

Boeing shares have fallen 36% this year amid concerns about safety, production and a $60 billion debt burden. A strike would add to the financial pain and add to delays in aircraft deliveries to airlines already facing capacity shortages.

According to a note from TD Cowen, a 50-day strike could cost Boeing an estimated $3-3.5 billion in cash flow. The last strike by Boeing workers in 2008 shut down factories for 52 days and hurt revenue by about $100 million a day.

Ortberg sent a letter to workers Wednesday urging them to sign the agreement for the good of the company.

“A strike would jeopardize our shared recovery, further eroding trust with our customers and hurting our ability to determine our future together,” the letter said.

The labor talks are a key test for Ortberg, who met with the union’s chief negotiator after arriving in August with a pledge to improve labor relations and safety and increase production of the company’s best-selling 737 MAX passenger jet. Boeing.

Ortberg and Boeing Commercial Airplanes chief Stephanie Pope arrived at the company’s airplane assembly plants in Everett and Renton this week to talk with workers about the proposed deal, a source said.

Harold Wilson, a Boeing machine repairman, said he had mixed emotions about the contract and wanted to see better pensions and higher wages for younger workers.

“He’s sitting outside, I don’t see the contract going. I don’t think we’ll be here on Friday,” Wilson said.

“I think Boeing will stay fighting again.”