Union Rejects Latest Contract Offer
Boeing machinists have voted to reject the company’s latest contract proposal, with 64% of union members opposing the offer, according to Jon Holden, president of the International Association of Machinists District 751. The announcement came Wednesday night, marking a significant development in a strike that has disrupted Boeing’s production lines for over a month. Despite ongoing negotiations and a proposal from the company aimed at bringing over 33,000 boeing machinists back to work, the union remains unsatisfied with the terms. “We have not achieved enough to meet our members’ demands,” said Holden, confirming that the strike, which began on September 13, would continue.
The strike initially began after boeing machinists voted to reject Boeing’s previous contract when the existing agreement expired. This ongoing labor dispute has caused a major slowdown in Boeing’s operations, particularly affecting the production of some of its most profitable jet models. Workers have stood firm on their demands, pushing back against offers they believe fall short of securing better pay and benefits for union members.
Key Sticking Points in Negotiations
One of the central issues in the prolonged contract negotiations is the union’s demand for the reinstatement of a pension plan that Boeing discontinued in 2014. While Boeing has consistently refused to bring pensions back, the company did offer increased contributions to its existing retirement plans. However, union members are still pushing for better long-term financial security. In addition to the pension dispute, another key point of contention is wages. Union members have demanded a 40% wage increase over the course of the contract. Boeing’s latest offer came close, promising a 35% raise. The company noted that the average annual machinist pay under the previous contract was $75,608 and that this rejected four-year contract would have raised that to $116,272 by its conclusion.
The drawn-out negotiations have been contentious, with both Boeing and the union filing complaints with the National Labor Relations Board (NLRB) over unfair labor practices. Despite the tensions, Boeing CEO Kelly Ortberg has expressed a desire to reset the relationship between the company’s management and labor, hinting at hopes for a resolution.
Boeing Faces Financial Risks as Strike Drags On
The ongoing strike is not only a labor dispute but also a significant financial burden for Boeing. The company posted $6 billion in losses for the third quarter, a higher-than-expected figure exacerbated by the strike’s impact on production. The 737 Max, one of Boeing’s most profitable jet models, is among those affected by the work stoppage, further threatening Boeing’s financial stability.
According to a report by S&P Global, the strike could cost Boeing approximately $1 billion for every month it continues, jeopardizing the company’s ability to meet its production goal of 38 Max jets per month by the end of 2024. With these challenges, Boeing has been placed on credit watch by S&P Global, facing the possibility of a downgrade to junk bond status by the end of the year if the strike remains unresolved. The financial pressure adds urgency to Boeing’s efforts to strike a deal with the boeing machinists, as both sides continue to seek a path forward amid a growing economic strain.
