By James Myers, OAN Staff
Friday, September 13, 2024 10:40 AM
Boeing workers walked out of a Boeing factory near Seattle on Friday morning after union members went on strike and rejected a tentative contract that would have raised wages by 25 percent over four years.
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The official strike began at 12:01 a.m. PDT, just three hours after the local chapter of the International Union of Machinists and Aerospace Workers announced that more than 94 percent of workers who voted rejected the contract proposal and 96 percent voted in favor of striking, exceeding the two-thirds majority requirement.
The aircraft manufacturer currently has a total of 150,000 employees in the United States and estimates that it contributes approximately $79 billion annually to the U.S. economy and directly and indirectly supports 1.6 million jobs.
“This is about fighting for our future,” John Holden, chairman of Boeing's largest IAM chapter, said in announcing the vote. “We are always open to coming back to the negotiating table and moving forward on the issues that our members say are important.”
Meanwhile, Boeing representatives said they are willing to return to the negotiating table to reach a new contract if necessary.
“The message was clear: the tentative agreement reached with IAM leadership is unacceptable to our members,” the union said in a statement. “We remain committed to rebuilding relationships with employees and the union.”
Boeing said its machinists will earn an average annual salary of $75,608, excluding overtime, increasing to $106,350 at the end of their four-year contract.
The agreement fell short of the union's original demand for a pay increase of at least 40 percent over three years. The union also wanted to restore traditional pension plans that were eliminated a decade ago, but agreed to increase Boeing's contributions to employees' 401(k) retirement accounts.
Boeing responded by commenting on the strike, saying it was “ready to return to the negotiating table to reach a new agreement.”
“The message was clear: the tentative agreement reached with IAM leadership is unacceptable to our members. We remain committed to rebuilding relationships with our employees and the union,” the company said in a statement.
But Boeing has had a series of accidents, including a passenger plane panel bursting and creating a gaping hole in January and NASA leaving two astronauts stranded in space aboard a “problem-ridden” Boeing Starliner spacecraft without a return flight.
Boeing's reputation has plummeted after two 737 Max jets crashed in 2018 and 2019, killing 346 people.
Those issues will pose a major challenge for Boeing's new CEO, Kelly Ortberg, who took on the role six weeks ago with hopes of turning around a company that has lost more than $25 billion over the past six years and now trails European rival Airbus.
Still, Ortberg pleaded with workers, arguing that a strike would jeopardize Boeing's recovery.
“It's no secret that Boeing is in a difficult period of business due in part to its own past failures,” Ortberg said. “By working together, we know we can get back on track, but a strike would jeopardize our shared recovery, further erode trust with our customers, and undermine our ability to define our future together.”
What's more, if the strike continues through the holiday season, Boeing could lose up to $3.5 billion in cash flow, said Kai von Rumohr, an aerospace analyst at TD Cowen, because the company makes about 60% of the profit on the sales price once it delivers planes to buyers.
Union negotiators unanimously recommended that workers approve the tentative agreement reached over the weekend, while many members remain unhappy with the benefits they have received so far in terms of pensions, health care and salaries.
“They're angry. There's a lot of things they want. I think Boeing understands that and wants to satisfy a significant number of them,” von Rumohr said. “The question is, will they do enough?”
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