Boeing strike could end with workers to vote on new wage deal

Boeing workers have agreed to hold a vote on a new labor deal, potentially ending a month-long strike. The breakthrough came after Boeing offered a 35% increase in wages over 4 years.

The new deal

Over 33,000 Boeing workers have been on strike since September 13th, which has damaged Boeing’s productivity during a volatile time. The strike has resulted in a widespread delay of orders, including the 737 MAX and its 767 and 777 widebodies. This has been difficult on the company as it is midst a financially difficult time with previous safety issues and delivery delays.

The new contracts offer a 35% wage increase, less than the original goal of 40% from the International Association of Machinists and Aerospace Workers (IAM) union. The deal also offers a new ratification bonus, reinstated incentive plan, and new retirement plan. The new offer comes after the IAM has rejected the previous offers of 25% and 30% wage increases.

In a new statement, the IAM claimed the new labour deal is “worthy of… consideration”. The statement also credited the acting US secretary of labor, Julie Su, with helping achieve the proposal.

The IAM has said that
“This proposal will be carefully reviewed and voted upon by the frontline workers of Boeing whose dedication to their communities and families has made this company successful in the past.”

The ratification vote is scheduled for the 23rd of October. As of right now, it is unclear which direction the vote will take. The non-reinstatement of the defined pension plan is likely to cause dissatisfaction among the older workers.
reinstate Boeing’s defined benefit pension plan, seen as a sticking point by some union members who are resentful about past pay increases at times when executives were richly rewarded.

Boeing factory workers and supporters picket outside the Boeing building © Paul Christian Gordon

Impact on Boeing

The vote will occur alongside Boeing’s third quarter results. Despite a 4% increase in shares aimed at ending the strike, experts predict significant losses for the company.

Chief executive Kelly Ortberg addresses the employees, claiming that

“We will have to make structural changes to ensure that we can stay competitive and deliver for our customers over the long term.”

The current changes will be the 17,000 employee cut expected to happen align with a production delay of the 777X jet due to the losses suffered during the strike.

Analysts expect Boeing to have over $1 billion in wage-related expenses, but resolving the strike quickly is an important step in improving the company’s finances. Even after resolving the strike, Boeing will still face numerous challenges, such as restoring production levels to their previous levels.