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Boeing workers vote to accept contract proposal, ending strike

A Boeing 767-300F is built for FedEx on Jan. 26, 2022, at the company’s factory in Everett.  (Ken Lambert/The Seattle Times/TNS)
By Lori Aratani and Rachel Lerman Washington Post

Striking Boeing machinists have ended their nearly two-month walkout, voting Monday to accept a four-year deal that locks in historic gains in wages and benefits that are substantially higher than the company offered before the strike began.

The victory for the union – which secured 38 percent raises over four years and $12,000 bonuses for approving the pact – also puts Boeing’s new chief executive, Kelly Ortberg, in a better position to begin pivoting the company away from a cascade of missteps and bad news this year that damaged its reputation and deepened its financial woes.

Leaders of the 33,000-member International Association of Machinists and Aerospace Workers Districts 751 and W24 hailed the agreement, which includes a guarantee that Boeing’s next new airplane will be built in the Seattle area. More than 26,000 union members voted Monday, with 59 percent voting to accept the deal, union district president Jon Holden said at the vote announcement in Seattle. His announcement was met with some cheers and some loud boos in the hall.

Less than two weeks ago, 64 percent of union members voted no on a company proposal that included a 35 percent raise and $7,000 signing bonus. The strike began Sept. 13 after IAM members resoundingly rejected Boeing’s initial offer of a 25 percent raise over four years.

“We can hold our heads high,” Holden said. “We all stood strong and we achieved something that we hadn’t achieved the last 22 years.”

In a message sent to employees after the vote results were announced, Ortberg said the company was pleased to reach a deal.

“We will only move forward by listening and working together,” he wrote. “There is much work ahead to return to the excellence that made Boeing an iconic company.”

By the end of the four-year contract, average annual machinists’ pay without overtime will rise to $119,309 from $75,608, according to Boeing. The new contract also includes paid parental leave and restores the annual bonus program that Boeing eliminated in its first offer in September.

The deal does not however, include restoration of the traditional pension plan, which machinists gave up in 2014 amid threats by Boeing that it would move airplane production out of the Seattle region unless workers agreed to end the program.

Bringing back the pension was a key sticking point for some union members. But such programs, once seen as a way to retain workers, have become increasingly rare as the costs of maintaining them have grown. Striking autoworkers also demanded the return of pensions in 2023 as part of their negotiations, but they ultimately settled for a deal that did not include them.

The Boeing union indicated that workers could resume work as soon as Wednesday, but given the length of the strike, experts say ramping up aircraft production could take months. Following IAM’s 2008 walkout, which lasted 54 days, it took Boeing two years to resume normal operations.

President Joe Biden in a statement congratulated the company and the union for reaching an agreement. The administration has kept a close watch on negotiations, with acting labor secretary Julie Su helping to bring the two sides together after talks broke down last month, and then again last week just days before Boeing made its most recent offer.

Ending the strike removes one roadblock to the company’s recovery, but its problems are far from over. Last month, the company reported a $6.2 billion loss for the most recent quarter that ended in September, and analysts estimate that the walkout by members of the company’s largest employee union, has cost the company $1 billion a month.

In his first extended remarks since becoming CEO in August, Ortberg said last month that going forward Boeing will be smaller and more focused on its core business of building airplanes. As part of that, he already has instituted cost-cutting measures, including a 10 percent reduction to its 171,000-person workforce that is expected to take effect early next year.

The strike has idled production of some of the company’s best-selling jets including the 737 Max and 777 wide-body aircraft. Boeing must restart production of those planes if it hopes to dig out of the financial tailspin that has put its investment-grade credit rating at risk.

Ortberg also indicated he may seek to sell some of the company’s divisions. The Wall Street Journal reported last month that Boeing is exploring selling some parts of its space division, which includes the troubled Starliner program.

After members voted down two previous offers, union leaders endorsed and strongly encouraged them to approve Boeing’s most recent proposal warning that negotiators had “extracted everything that we can in bargaining and by withholding our labor.”

“We believe that we have secured one of the strongest contracts in the aerospace industry,” union leaders wrote in a Saturday message to members. “Many other bargaining units will be inspired by our strength and the results you all achieved.”

In a message to employees Friday, Ortberg emphasized the need for unity.

“It’s time we all come back together and focus on rebuilding the business and delivering the world’s best airplanes,” he wrote. “There are a lot of people depending on us.”

Boeing appeared to be stabilizing after two fatal crashes involving its 737 Max jets in 2018 and 2019 killed 346 people and increased regulatory scrutiny of its operations. The pandemic presented another setback for the company, which posted nearly $12 billion in losses in 2020. Boeing continued to lose money but had reduced those losses to just over $2 billion by 2023.

But after a door panel blew out of a midair 737 Max jet operated by Alaska Airlines in January, its problems began to multiply. Investigations uncovered shortcomings in its safety oversight programs, which led the Federal Aviation Administration to place restrictions on the number of 737 Max jets it could produce. The company also agreed to plead guilty to one count of fraud after the Justice Department determined it violated the conditions of a 2021 plea agreement related to 737 Max crashes in Indonesia and Ethiopia.