New difficulty for the American aircraft manufacturer in an already difficult situation. Boeing employees in the Seattle region in the northwestern United States voted by a large majority in favor of a strike on Friday, September 13, rejecting the new agreement proposed by their company, announced their union. The workers rejected the contract by 94.6% and voted on Thursday afternoon in favor of the strike by 96%, said Jon Holden, president of the machinists union IAM-District 751, which represents about 33,000 workers in the Pacific Northeast.
The strike will shut down two major assembly plants in the Puget Sound region. It will halt production of the 737, 777 and 767 freighters, whose deliveries are already experiencing delays. A situation that is all the more problematic since the aircraft manufacturer collects the majority of the payment (around 60%) upon delivery of the planes.
Despite the massive vote in favor of the strike, the Boeing Group stated in a press release that it was ” engaged “ in the negotiation. “We remain committed to repairing our relationship with our employees and the union, and we are ready to return to the bargaining table to reach a new agreement.”the aircraft manufacturer said.
Multitude of quality problems.
According to the workers, the proposed agreement was much less generous than the managers had claimed. This new agreement, which affects IAM members in the Seattle sector, provided for a 25% wage increase over four years, as well as a commitment to invest in the region. It also included the construction of the next aircraft – announced for 2035 – in the historic birthplace of the aircraft manufacturer, which would provide employment for several decades.
Boeing had hoped these concessions would be enough to avoid a strike, while its financial situation has been precarious since the crash of two 737 MAX 8s in 2018 and 2019, which cost the lives of 346 people, and numerous production quality problems. “It is no secret that our business is going through difficult times, in part due to our own past mistakes. (…) A strike would jeopardize our common recovery”Kelly Ortberg, who succeeded Dave Calhoun as CEO of the US aircraft manufacturer on August 8, warned on Wednesday evening. She had urged employees not to “sacrifice” future progress due to “frustrations linked to the past”.
The dissatisfied, however, consider that the wage increase is too far from the union’s demands (+40% initially) and that the pension aspect is unsatisfactory. A week after taking office, Mr. Ortberg promised to “reboot” the relationship with the IAM. But when many union members read the agreement, they reacted negatively and called for a work stoppage.
Boeing has come under increased scrutiny since an in-flight incident in early January involving an Alaska Airlines 737 MAX 9. A series of compliance and quality control issues have reignited questions raised about those same deficiencies after the two crashes.
The last strike by the American aircraft manufacturer was in 2008 and lasted 57 days. According to analysts at TD Cowen, a 50-day strike would deprive Boeing of $3.5 billion in liquidity and have a $5.5 billion impact on its turnover.
