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Boeing machinists vote to strike after rejecting pay increases of 25% over 4 years



 Boeing's (BA.N), opens new tab U.S. West Coast factory workers walked off the job early on Friday after overwhelmingly rejecting a contract deal, halting production of the planemaker's strongest-selling jet as it wrestles with severe output delays and heavy debt.
The workers' first strike since 2008 comes as the planemaker is under heavy scrutiny from U.S. regulators and customers after a door panel blew off a 737 MAX jet mid-air in January.
The mounting crises battered Boeing's stock and sparked a leadership upheaval. Boeing shares fell 4% in U.S. pre-market trading on Friday. The stock has fallen nearly 38% since the start of 2024.
New CEO Kelly Ortberg CEO Kelly Ortberg was brought in just weeks ago to restore faith in the planemaker and had proposed a deal including a pay rise of 25% over four years, far lower than the 40% workers had demanded.
Roughly 30,000 International Association of Machinists and Aerospace Workers (IAM) members who produce Boeing's 737 MAX and other jets in the Seattle and Portland areas voted on their first full contract in 16 years, with 94.6% rejecting it and 96% favoring a strike in a two-part ballot.
"This is about respect, this is about addressing the past, and this is about fighting for our future," said Jon Holden, who headed the negotiations for Boeing's largest union, before announcing the vote result on Thursday evening.
"We strike at midnight," said the union leader who had agreed to the just-defeated deal, as members in the union hall cheered and chanted: "Strike! Strike! Strike!"

BOEING, UNION KEEN TO GET BACK TO THE TABLE

A long strike could badly hit Boeing's finances, which are already groaning due to a $60 billion debt pile.
"We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement," the planemaker said in a statement on Thursday.
The proposed deal included a $3,000 signing bonus and a pledge to build Boeing's next commercial jet in the Seattle area, provided the program was launched within the four years of the contract.
"The key question now is on the duration of the strike given the gap between the proposed wage increase and union members request," Jefferies analyst Chloe Lemarie said in a note, adding that a long strike represents a key risk for 737 MAX production levels.
Although IAM leadership recommended last Sunday that its members accept the contract, many workers had responded angrily, arguing for the original demand and lamenting the loss of an annual bonus.
Item 1 of 2 Boeing factory workers hold signs as they wait to vote on their first full contract in 16 years, at an International Association of Machinists and Aerospace Workers District 751 union hall, in Renton, Washington, U.S. September 12, 2024. REUTERS/David Ryder
"We're going to get back to the table as quickly as we can," Holden told reporters, without saying how long he thought the strike would last or when talks would resume. "This is something that we take one day at a time, one week at a time.”
MULTIPLE CHALLENGES
A strike presents Boeing with multiple challenges: it will need to decide how to respond at the bargaining table after saying it had offered everything it could. It must also find a way to secure factories full of valuable, part-built planes.
Workers have been protesting all week in Boeing factories in the Seattle area that assembles Boeing's MAX, 777, and 767 jets.
Shortly after midnight, striking workers started to gather outside the entrances of Boeing factories in the Seattle area. Many waved placards that read: ‘On Strike Against Boeing', and drivers passing by honked their car horns in support.
“I’m willing to strike for two months or even longer. Let’s go as long as it takes to get what we deserve,” said James Mann, a 26-year-old who works in a wings division at Boeing.
If prolonged, a strike would also weigh on airlines that depend on the planemaker’s jets and suppliers who manufacture parts and components for its aircraft.
Air India CEO Campbell Wilson said on Friday that Boeing's 737 MAX deliveries to his airline appeared to be "delayed a little bit" even before the strike announcement because of regulatory scrutiny after the Alaska Airlines door incident and supply chain issues affecting the broader industry.
"There's nothing official yet, but I think the indication is, or the expectation is that it's going to be a little bit later," he said in an interview in Sydney.
According to a pre-vote note from TD Cowen, a 50-day strike could cost Boeing $3 billion to $3.5 billion of cash flow.
The Boeing workers' last strike in 2008 shuttered plants for 52 days and hit revenue by an estimated $100 million per day.
S&P Global Ratings said that an extended strike could delay the planemaker's recovery and hurt its overall rating. Both S&P and Moody's rate Boeing one notch above junk status.
The White House did not immediately respond to a request for comment.

Boeing Machinists union members voted Thursday by a large majority to reject management’s contract offer and go on strike.

Boeing’s 33,000 blue-collar workers were instructed to walk out at 12 a.m. Friday and stay out indefinitely.

International Association of Machinists District 751 President Jon Holden, who on Sunday urged members to accept the contract deal, announced the result to raucous cheers and chants of “Strike! Strike! Strike!” late Thursday at the union headquarters in South Park.

“This is about respect, this is about addressing the past and this is about fighting for our future,” Holden told the crowd.

“We strike at midnight,” he continued.

About 94.6% voted to reject the contract and 96% voted to strike, more than the two-thirds majority required by union rules to authorize a walkout.

Even before Holden delivered the result, a team of union officials outside was busily cutting holes in large metal barrels, carving the initials “IAM” into the side of each and adding a cylindrical chimney on top. They’ll be used as “burn barrels,” with fires lit inside to keep picketers warm in the nights and days ahead.

Votes were tallied from polling places across the Puget Sound region, as well as in Moses Lake, Portland, Ore., Victorville, Calif., and Edwards Air Force Base in southern California.

The result was anticipated. Machinists have demonstrated and marched inside the local factories for days, loudly protesting Sunday’s contract offer.

The main reason workers interviewed gave for rejecting the contract was that the wage increase was far short of what they wanted.

They did not even accept that Boeing’s stated wage increase was really 25% over four years as the company presented it since the Machinists at the same time lost their annual bonus, which might have been worth around 4% each of those years.

Brandon Phelps, 35, a former U.S. Air Force mechanic who installed weapons systems on Boeing F-15s in Afghanistan and is now a team lead in the Renton 737 assembly plant, said the increase is just over 10% over four years once that takeaway is considered.

He said he loves working at Boeing, where he finds “the same camaraderie as in the military,” but backs a strike because the lower-paid, entry-level workers on his team cannot live on their wages.

“At Panda Express, they’re making as much as a grade-three mechanic,” Phelps said.

Bryan Schroeder, an electrician based in Everett, said Thursday outside the polling place that he initially thought the proposed contract was pretty good when he read it on Sunday.

But after talking through the details with colleagues the next day, he decided Boeing had misled workers about the wage increases in the offer. 

“It’s just a matter of them trying to make things look better than they are,” Schroeder said. “I realized it was smoke and mirrors.”

Relaxed and unified entering a strike

The last Machinists strike, in 2008, was unfortunately timed. Lehman Brothers bank collapsed, initiating a meltdown in global financial markets, just days after the strike was called.

The machinists returned to work with limited gains after 57 days on strike.

Yet on Thursday — 16 years later and 10 years after Boeing forced another bitterly resented contract on the union by threatening to build the new 777X jet elsewhere when a strike wasn’t an option — the atmosphere was relaxed and unified as a steady stream of Machinists of all ages and ethnicities voted at polling places near their worksites. 

Union members greeted colleagues as they walked into polling locations spread across the Puget Sound region and huddled in groups as they walked back out to discuss their votes. Workers asked one another if they voted “no” on the contract and “yes” on the strike.

In Everett, where workers split up to vote at a community park and a tech skills center near an area high school, machinists trickled in on breaks or before their shifts to cast their votes. Outside Kasch Park, one pickup truck kept a loudspeaker going with the chant “strike, strike, strike.”

Silay Chindavong, who has worked at the Everett widebody jet plant for the past year and a half, came to cast her vote with a T-shirt that read “Out The Door in ‘24.” Rossie Binet, a longtime Boeing contractor who recently joined as a full-time employee, stepped off the bus brandishing a Rosie the Riveter sign.

Binet and her husband, a longtime Boeing employee who was there for the 2008 strike, were prepared to make the necessary sacrifices, she said Thursday. “I hope it goes all the way. We need a fair contract.”

Yves Diirell and Elizabeth Sheridan, both longtime Boeing employees, said they weren’t returning to work after casting their vote to strike Thursday morning.

Diirell, who has worked at Boeing since 1997, said this year’s momentum is “stronger” than in 2008.

“This vote is not just about us,” he said. “This vote is for the people that come after us.”

At the Renton union hall, workers interviewed were similarly solid on voting to strike and seemed unfazed by the prospect of losing their paychecks.

Jacquelyn Vaden, 57, who has worked at Boeing for more than 36 years and is now a team lead in Everett at the facility that makes insulation blankets for the fuselage, has been through three strikes.

The eight-week 2008 strike wasn’t so tough, she said. “You prepare for it. You save. You are careful with how you spend your money.”

Vaden said she has saved again for this one and won’t look for another job. “I’ll utilize every day to get some rest and get stuff done for my dad.”

Zachary Haley, 37, with almost five years at the company and a quality inspector in Renton, is a third-generation Boeing employee.

“I have to work stupid amounts of overtime to get enough of a paycheck to survive. We’re not making microwaves in there; we’re making planes that fly around the world,” Haley said.

He says he’s not worried if a strike is extended. “I got a brain,” he said. “I can get jobs elsewhere.”

Younger machinists back the strike too

Workers who are relatively new to Boeing earn far lower wages, and one might expect more worry about how they’d make ends meet in the event of a long-term strike.

That didn’t stop recent hires from voting to walk out Thursday. 

One of those was Calvin, 24, who has worked on final assembly in Renton for just over a year and asked that only his first name be publicized for fear of retaliation.

He’s been pursuing a master’s degree in business part-time. On strike, he’ll just focus on that. He’s saved enough to last for three months, he said.

Calvin added that he’s not worried about a strike harming the company. “Boeing is America’s baby,” he said. “They won’t let that baby sink.”

Two workers who started in Everett this year, and also asked to remain anonymous to protect their jobs, said they were prepared to strike for one month. After that, they would need to look for seasonal work. 

Both had children at home, mortgages to pay, and families that were asking what a strike would mean for them.

But they didn’t hesitate to cast their vote, the workers said Thursday. “Solidarity is the most important thing to be a union member,” one said.

Another relatively new Renton employee, Myra Mercer, 29, is a third-generation Boeing employee with her mom and stepdad currently at Boeing.

Mercer said she loves the environment at Boeing and the people are great. However, she said the contract offer doesn’t reflect how hard people work and the importance of what they do building machines that carry people around the world.

Unmoved by the tide

At the Machinists Union headquarters in the South Park neighborhood of Seattle, close to Boeing Field but not the large assembly plants, a smaller flow of machinists came to vote Thursday, including some from Boeing’s Military Delivery Center at Boeing Field.

Among those was Michael Rizza, an eight-year U.S. Army veteran, who steadfastly took a different stand. Opposed to a strike, he said he likely won’t go out despite the vote.

“I did not vote to strike,” Rizza said. “I think it’s a fair deal.”

Rizza, 32, joined Boeing just about a year ago. He had done aviation flight-line mechanic work for six years previously and now maintains KC-46 tankers for the Air Force.

He said about 90% of the workers at the center are ex-military and “most of the vets over there are happy with the offer and think it’s a good deal,” he said, adding that he thinks the union is being unrealistic about the contract.

He currently earns $38 an hour and in addition to the raises in the offer, he’ll get an extra $2 an hour because he has security clearance, he said.

Rizza said he respects the union, but “I personally cannot strike. I have a little baby on the way, and my daughter has to have surgery. It’s not realistic to go find another job.”

If a strike is called, he said before votes were counted, “I’ll probably come to work.”

Strikes often inflame passions as union members suffering the loss of income resent anyone going to work through picket lines. That sometimes draws heated abuse from members on strike.

Yet Rizza is firm that he’ll do what’s right for him and his family. “I’m not afraid. Why should I be afraid?”

“People are entitled to their opinion. They don’t know me or my story,” Rizza said. “They won’t force their opinion on me. That’s 100% not what this country stands for.”

What’s next?

The longer this strike goes on, the more damage will be done to the company, the machinists, and the region’s economy.

The vote was emphatic but what comes next is unpredictable. There’s no telling how long the strike might last.

Many machinists say that if it lasts until Thanksgiving, Boeing — considering that the plants always close over the Christmas break — may just let the workers stay out until the New Year.

But such speculation conjures an immensely damaging strike of more than 100 days, longer than any Machinist strike since the first one in 1948 that lasted 140 days.

Boeing Commercial Airplane CEO Stephanie Pope told employees in a message Tuesday that management gave all it could in the negotiations, and “we did not hold back with an eye on a second vote.”

At some point though, there must be a way to get people back to work, a difficult challenge for Boeing’s new CEO Kelly Ortberg.

Broderick Conway, 29, a Renton Quality Inspector with just a year-and-a-half at Boeing, said the contract offer was so far from what the union wanted that management will “have to come up with something big to get us back.”


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