Boeing Workers Strike After Rejecting Union-Backed Contract

Thousands of Boeing factory workers have gone on strike after rejecting a tentative contract that was backed by their own union leadership.

The walkout, involving around 33,000 members of the International Association of Machinists and Aerospace Workers (IAM), began shortly after midnight on September 13, 2024.

The vote to strike came after 94.6% of workers rejected the deal, which included a 25% pay increase over four years, among other concessions.

The IAM released the following statement:

“We are incredibly proud of the hard work and dedication shown by the negotiating teams from District 751 and W24 and the unwavering solidarity of our membership. Their tireless efforts have been on display throughout this entire process. Now, they will regroup and begin planning the next steps on securing an agreement that our membership can approve.

“We will make every resource available for our District 751 and W24 members during this challenging time. IAM members from across North America stand in solidarity with our members in the Pacific Northwest and California. Our goal is to get a strong contract that meets the needs of our members.”

Root Causes of the Strike

The strike comes at a time when Boeing is already grappling with significant financial pressures. While the proposed contract offered the largest wage increase in the company’s history, union members were frustrated by other elements of the deal.

According to Bloomberg, workers were in disagreement with the continuation of a provision that prevents them from reaching top pay scales until six years of service. In addition, there is thought to be lingering resenment among workers after Boeing ended defined-benefit pensions in 2014.

Impact on Boeing and the Aerospace Industry

The strike has brought production at Boeing’s key manufacturing facilities in Seattle and surrounding areas to a halt – primarily affecting the production of Boeing’s 737 Max. The strike could cause significant delays in deliveries, putting further strain on the company’s already tight cash flow.

Financial analysts have warned that an extended strike could have a severe impact on Boeing’s recovery. According to AJOT, investment bank TD Cowen said in a note that the walkout could cost the company between $3 billion and $3.5 billion in cash flow.

Next Steps in Negotiations

Boeing has expressed its willingness to return to the bargaining table, acknowledging that the tentative agreement had failed to meet workers’ expectations. In a statement, the company said it remains committed to “resetting its relationship” with its employees and union​. However, there is a significant breakdown of trust between the workers and both the union leadership and Boeing management. This lack of trust could prolong the strike, as workers push for better terms on pensions, healthcare, and wages​​.

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” Boeing said in a statement. “We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement.”

The last major strike at Boeing occurred in 2008 and lasted for eight weeks, costing the company an estimated $100 million a day in deferred revenue.

As Boeing grapples with this latest crisis, the outcome of the strike could have long-term consequences for the company’s recovery and its relationship with its workforce. For now, the machinists remain on the picket lines, determined to secure a deal that they feel adequately addresses their grievances.