Boeing machinists hold contract vote that could end their 7-week strike

A Boeing employee looks at informational pamphlets before heading in to vote on a new contract offer from the company, Wednesday, Oct. 23, 2024, at the Aerospace Machinists Union hall in Renton, Wash. (AP Photo/Lindsey Wasson)

Unionized factory workers at Boeing were voting Monday whether to accept a contract offer or to continue their strike, which has lasted more than seven weeks and shut down production of most Boeing passenger planes.

A vote to ratify the contract on the eve of election day would clear the way for a major U.S. manufacturer and government contractor to resume airplane production. If members of the International Association of Machinists and Aerospace Workers vote for a third time to reject Boeing's offer, it would plunge the aerospace giant into further financial peril and uncertainty.

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In its latest proposed contract, Boeing is offering pay raises of 38 per cent over four years, as well as ratification and productivity bonuses. IAM District 751, which represents Boeing workers in the Pacific Northwest, endorsed the proposal, which is slightly more generous than one the machinists voted down nearly two weeks ago.

"It is time for our members to lock in these gains and confidently declare victory," the union district said in scheduling Monday's vote. "We believe asking members to stay on strike longer wouldn't be right as we have achieved so much success."

Union officials said they think they have gotten all they can though negotiations and a strike, and that if the current proposal is rejected, future offers from Boeing might be worse. They expect to announce the result of the vote late Monday.

Boeing says average annual pay for machinists is US$75,608 and would rise to $119,309 in four years under the current offer.

Pensions were a key issue for workers who rejected the company's previous offers in September and October. In its new offer, Boeing did not their demand to restore a pension plan that was frozen nearly a decade ago.

If machinists ratify the contract now on the table, they would return to work by Nov. 12, according to the union.

The strike began Sept. 13 with an overwhelming 94.6 per cent rejection of Boeing's offer to raise pay by 25 per cent over four years -- far less than the union's original demand for 40 per cent wage increases over three years.

Machinists voted down another offer -- 35 per cent raises over four years, but still no revival of pensions -- on Oct. 23, the same day Boeing reported a third-quarter loss of more than US$6 billion. However, the offer received 36 per cent support, up from five per cent for the mid-September proposal, making Boeing leaders believe they were close to a deal.

In addition to a slightly larger pay increases, the proposed contract includes a US$12,000 contract ratification bonus, up from $7,000 in the previous offer, and larger company contributions to employees' 401(k) retirement accounts.

Boeing also promises to build its next airline plane in the Seattle area. Union officials fear the company may withdraw the pledge if workers reject the new offer.

The strike drew the attention of the Biden administration. Acting Labor Secretary Julie Su intervened in the talks several times, including last week.

The labour standoff -- the first strike by Boeing machinists since an eight-week walkout in 2008 -- is the latest setback in a volatile year for the company.

Boeing came under several federal investigations after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January. Federal regulators put limits on Boeing airplane production that they said would last until they felt confident about manufacturing safety at the company.

The door plug incident renewed concerns about the safety of the 737 Max. Two of the plane's crashed less than five months apart in 2018 and 2019, killing 346 people. The CEO whose effort to fix the company failed announced in March that he would step down. In July, Boeing agreed to plead guilty to conspiracy to commit fraud for deceiving regulators who approved the 737 Max.

As the strike dragged on, new CEO Kelly Ortberg announced about 17,000 layoffs and a stock sale to prevent the company's credit rating from being cut to junk status. S&P and Fitch Ratings said last week that the US$24.3 billion in stock and other securities will cover upcoming debt payments and reduce the risk of a credit downgrade.

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The strike has created a cash crunch by depriving Boeing of money it gets when delivering new planes to airlines. The walkout at Seattle-area factories stopped production of the 737 Max, Boeing's best-selling plane, and the 777 or "triple-seven" jet and the cargo-carrying version of its 767 plane.

Ortberg has conceded that trust in Boeing has declined, the company has too much debt, and "serious lapses in our performance" have disappointed many airline customers. But, he says, the company's strengths include a backlog of airplane orders valued at a half-trillion dollars.