SEATTLE: Boeing’s US west coast factory workers walked off the job on Friday after overwhelmingly rejecting a contract deal, halting production of the planemaker’s strongest-selling model and sending shares down over two per cent.
The first strike since 2008 comes as the planemaker is under heavy scrutiny from regulators and customers after a door panel blew off a 737 MAX jet mid-air in January.
The mounting crises hit Boeing’s stock and sparked a leadership upheaval. The shares fell 2.1pc in the early morning trading session. The stock has lost nearly 38pc so far this year, losing $58 billion in market value.
New CEO Kelly Ortberg was brought in just weeks ago to restore faith in the planemaker and proposed a deal including a pay raise of 25pc over four years, far lower than the 40pc workers had demanded.
Roughly 30,000 International Association of Machinists and Aerospace Workers (IAM) members who produce Boeing’s top selling 737 MAX and other jets in the Seattle and Portland areas, voted on their first full contract in 16 years, with 94pc rejecting it and 96pc favouring a strike in a two-part ballot.
“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. The union will get back to the table as quickly as it can, Holden told reporters, without saying how long he thought the strike would last or when talks would resume.
Boeing said it was ready to get back to the negotiating table, a sign that it could sweeten the deal.
“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the union,” the planemaker said in a statement. Boeing said it had offered workers everything it could and needs to plan for the investments needed to replace its best-selling single-aisle models while placating striking workers.
A long strike could badly hit Boeing’s finances, already groaning due to a $60bn debt pile. To cover debt maturities, Boeing needs to generate enough cash flow.
Bank of America said Boeing would likely have to move closer to IAM’s initial wage proposal.
Boeing’s challenges
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 programme was launched within the contract term.
Although IAM leadership recommended last Sunday that its members accept the contract, many workers responded angrily, arguing for the original demand and an annual bonus.
Workers have been protesting all week in Boeing factories in the Seattle area that assemble MAX 777 and 767 jets.
On Friday, members in the union hall cheered and chanted “Strike! Strike! Strike!” and shortly after midnight, striking workers started to gather outside Boeing factories in the Seattle area. Many waved placards that read: On Strike Against Boeing’, and drivers honked 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.
Published in Dawn, September 14th, 2024
