SEATTLE —
Aircraft assembly workers went on strike Friday at Boeing factories in Washington, Oregon and California after union members overwhelmingly rejected a tentative contract that would have raised wages by 25 percent over four years.
The strike, which involved 33,000 aircraft drivers, will not immediately disrupt commercial flights but is expected to halt production of Boeing’s best-selling aircraft, dealing another setback to a company already grappling with a damaged reputation and financial losses.
Boeing shares fell 2.2% in morning trading, bringing their year-to-date losses to 38.9%.
The strike began less than three hours after the regional branch of the International Association of Machinists and Aerospace Workers (IAM) said 94.6 percent of voting workers had rejected its bargaining committee’s recommendation to approve the proposed contract and 96 percent had supported the strike.
Shortly after midnight, workers stood outside Boeing’s factory in Renton, Washington, holding signs that read “Historic contract for nothing” and “Have you seen the damn housing prices?” Car horns blared and a boombox played songs like Twisted Sister’s “We’re Not Gonna Take It” and Taylor Swift’s “Look What You Made Me Do.”
Several workers were upset by the company’s recent decision to change the criteria for paying annual bonuses. Many said they found the pay offer inadequate given how much the cost of living has risen in the Pacific Northwest. Toolmaker John Olson, 45, said he had received a 2 percent raise during his six years at Boeing.
Boeing worker Ritz Amador, 40, who works as a customer coordinator, wears a cap with the slogan “Make Boeing Great Again” (a reference to Donald Trump’s slogan, “Make America Great Again”) during the picket line after union members voted overwhelmingly to reject a contract offer and go on strike on Friday, Sept. 13, 2024, in front of the company’s factory in Renton, Wash.
(Lindsey Wasson/AP)
“The last contract we negotiated was 16 years ago and the company is basing increases on wages from 16 years ago,” Olson said. “They’re not even keeping up with the cost of inflation that’s happening right now.”
Machinists earn an average of $75,608 a year, not including overtime, and under the offer would rise to $106,350 at the end of the four-year contract, according to Boeing.
The offer, however, fell short of the union’s initial request for a 40 percent pay increase over three years. The union also wanted to restore traditional pensions that had been eliminated a decade ago, but settled for an increase in Boeing’s new contributions to employees’ 401(k) retirement accounts to as much as $4,160 per worker.
Under the terms of the contract they rejected, the workers would also have received $3,000 payments and a reduction in their contribution to their health care plan. In addition, Boeing had met a key union demand by agreeing to build its next new plane in Washington state.
Boeing Machinists Union members Dave Hendrickson, left, and Steven Wilson, right, on the picket line at the Renton Assembly Plant, Friday, Sept. 13, 2024, in Renton, Wash.
(John Froschauer/AP)
Local union leader Jon Holden, president of IAM District 751, said the union would poll its members to decide which issues will be priorities when negotiations resume. Boeing responded to the strike announcement by saying it was “willing to return to the table to reach a new agreement.”
“The message was clear: the tentative agreement we reached with union leadership was not acceptable to its members. We remain committed to restoring our relationship with our employees and the union,” the company said in a statement.
Very little has gone right for Boeing this year, from a panel breaking that left a gaping hole in one of its commercial jetliners mid-flight in January to NASA’s decision to strand two astronauts in space before they returned to Earth in a problem-plagued capsule built by the company.
The striking machinists assemble the 737 Max, Boeing’s best-selling passenger jet, along with the 777 and 767 freighters. The strike is unlikely to halt production of Boeing’s 787 Dreamliners, which are built by nonunion workers in South Carolina.
The strike will deprive Boeing of the vital cash it gets from delivering orders to airlines. It will be another challenge for new CEO Kelly Ortberg, who was tasked six weeks ago with turning around a company that has lost more than $25 billion in the past six years and has fallen behind European rival Airbus.
Ortberg made a last-minute effort to salvage a deal that had been unanimously backed by union negotiators. On Wednesday, he told machinists that “nobody wins” with a walkout, and that a strike would put Boeing’s recovery in jeopardy and raise further doubts about the company in the eyes of its customers.
“It’s no secret to Boeing that our business is going through a difficult period, in part due to our own past mistakes,” he said. “Working together, I know we can get back on track, but a strike would jeopardize our shared recovery, further erode our customers’ trust and undermine our ability to determine our future together.”
Ortberg was in a difficult position, according to Holden union leader, because drivers were resentful of stagnant wages and concessions made since 2008 on pensions and healthcare to prevent the company from offshoring jobs.
“This is about respect, this is about the past and this is about fighting for our future,” Holden said in announcing the strike.
Depending on the length of the strike, halting aircraft production could prove costly for struggling Boeing. An eight-week strike in 2008, the longest at Boeing since a 10-week walkout in 1995, cost the company about $100 million a day in deferred revenue.
Before the tentative deal was announced Sunday, Sheila Kahyaoglu, an aerospace analyst at Jefferies, estimated that a strike would cost the company about $3 billion, based on the 2008 strike plus inflation and current aircraft production rates.
Solomon Hammond, 33, another Renton toolmaker, said he was prepared to strike indefinitely to get a better contract.
Boeing’s offer “just doesn’t fit the current climate. Wages are too low,” Hammond said. “I make $47 an hour and live paycheck to paycheck. Everything costs more.”
