More than 30,000 Boeing workers were poised to go on strike after overwhelmingly rejecting a new labor contract that had been proposed by the company and the International Association of Machinists and Aerospace Workers. The workers, based in the Seattle area and Oregon, voted 94.6% against the tentative agreement and 96% in favor of striking, exceeding the two-thirds majority required for a work stoppage. The vote was announced by IAM District 751 President Jon Holden, who labeled it an “unfair labor practice strike” due to alleged discriminatory conduct and coercive questioning faced by factory workers. Holden emphasized the need for Boeing to engage in good faith bargaining.
The rejected proposal included a 25% wage increase and enhancements to health-care and retirement benefits, though the union had been seeking raises of about 40%. Workers expressed dissatisfaction with the agreement, claiming that it did not adequately address the rising cost of living. This situation presents a challenge for Boeing CEO Kelly Ortberg, who recently assumed the leadership role and had urged employees to accept the contract and avoid a strike in order to support the company’s recovery efforts. Given the overwhelming rejection of the proposed agreement, the company’s financial outlook is uncertain.
The potential impact of the strike will depend on its duration, with Jefferies aerospace analyst Sheila Kahyaoglu estimating a 30-day strike could cost Boeing around $1.5 billion. She warned that a prolonged strike could disrupt suppliers and supply chains, exacerbating existing challenges faced by the company. The tentative agreements had been projected to have an annual impact of $900 million if ratified, indicating the significant financial stakes involved. Boeing has faced a series of setbacks in recent months, including production delays, quality control issues, and industry-wide challenges such as supply chain disruptions and labor shortages.
In addition to the labor dispute, Boeing is also under increased federal scrutiny following the engine failure of a nearly new Boeing 737 Max 9 aircraft earlier this year. The incident has raised questions about the company’s manufacturing processes and quality control measures, adding to its existing challenges. Boeing has been grappling with significant financial pressures this year, having already used up approximately $8 billion in cash and facing mounting debt. The strike represents a significant setback for the manufacturer as it works to address production issues, enhance safety measures, and rebuild its reputation in the wake of recent crises. The outcome of the strike will have far-reaching implications for Boeing’s operations and financial outlook in the months ahead.
