Boeing works to conserve cash as 33,000 factory workers go on strike

Machinists at Boeing voted Thursday to go on strike, another setback for the giant aircraft maker whose reputation and finances have been battered and now faces a shutdown in production of its best-selling airline planes.

The International Association of Machinists and Aerospace Workers said 94.6% of voting workers rejected the contract, which would have raised pay 25% over four years, and 96% approved the strike, easily surpassing a two-thirds requirement.

The strike by 33,000 machinists began at midnight Friday morning.

The company said it was taking steps to conserve cash while its CEO looks for ways to come up with a contract that the unionized factory workers will accept.

Boeing stock fell more than 3% in afternoon trading, bringing its decline for the year to nearly 40%.

“This is about respect, this is about the past, and this is about fighting for our future,” IAM District 751 President Jon Holden said in announcing the vote, The Associated Press reported.

Union leader speaks out about the Boeing strike vote

Holden answered questions at a press conference Thursday night after the vote was completed, KIRO 7 reported. When asked about concerns from union members who say the proposed deal was not what they were looking for, or who have expressed concerns that the union isn’t acting in their best interest, Holden disagreed with that assessment, but acknowledged union members had the final say.

“Well, I know that we’re acting in their best interests, so you know… we had an agreement that we negotiated and we recommended that because there was many important things in it, but within our system, our members have the final say,” Holden said, as KIRO 7 noted in its coverage. “This is exactly how it should be, we achieved everything we could in bargaining, short of a strike, and now it’s in their hands.”

Holden also stated that Boeing’s promise to build its next plane in Puget Sound, which had been guaranteed under the rejected tentative agreement, was a key issue for the union.

“It’s a major issue for us to land that — it was a part of this agreement,” Holden said as KIRO 7 cited. “There are other aspects of the agreement that clearly weren’t good enough for our members, but that will still be a priority for us — is to secure that work for the future.”

Holden also confirmed the strike would be an “unfair labor practice strike.” Violations of the law on the shop floor such as discriminatory conduct, coercive questioning, unlawful surveillance and unlawful promise of benefits were cited.

“We have a right to communicate; we have a right to use fliers, and some of that was inhibited,” Holden said, according to KIRO 7.

The union plans on communicating with members primarily through electronic surveys, by email, and by phone.

A Boeing spokesman sent a statement to multiple media outlets, including KIRO Newsradio, late Thursday acknowledging the result of the vote and pledging to work with its employees to get a deal done.

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” the statement reads. “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.”

Boeing’s rough patch continues

A walkout won’t cause flight cancellations or directly affect airline passengers, but it would be another blow to Boeing’s reputation and finances in a year marked by problems in its airplane, defense and space operations.

Very little has gone right for Boeing this year, from a panel blowing out and leaving a gaping hole in one of its passenger jets in January to NASA leaving two astronauts in space rather sending them home on a problem-plagued Boeing spacecraft.

Tough year: A strike would add to turbulent times at Boeing

As long as the strike lasts, it will deprive Boeing of much-needed cash that it gets from delivering new planes to airlines. That will be another challenge for new CEO Kelly Ortberg, who six weeks ago was given the job of turning around a company that has lost more than $25 billion in the last six years and fallen behind European rival Airbus.

Ortberg made a last-ditch effort to salvage a deal that had unanimous backing from the union’s negotiators. He told machinists Wednesday that “no one wins” in a walkout, and that a strike would put Boeing’s recovery in jeopardy and raise more doubt about the company in the eyes of its airline customers.

“For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” he said. “Working together, I know that we can get back on track, but a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.”

Workers were in no mood to listen.

Holden said Ortberg faced a difficult position because machinists are bitter about stagnant wages and concessions they have made since 2008 on pensions and health care to prevent the company from moving jobs elsewhere.

“It’s hard to make up for 16 years,” he said.

The vote was also a rebuke to Holden and union negotiators, who recommended that workers approve the contract offer. Holden, who predicted that workers would vote to strike, said the union will survey members to decide what issues they want to stress when negotiations resume.

Boeing workers express their frustration

Union members posted complaints about the deal all week on social media, often demanding bigger raises. On Thursday, several dozen blew whistles, banged drums and held up signs calling for a strike as they marched to a union hall near Boeing’s 737 Max plant in Renton.

Shortly after midnight, striking workers stood outside the Boeing factory in Renton, with signs reading, “Historic contract my a**” and “Have you seen the damn housing prices?” Car horns honked and a boom box played songs including Twisted Sister’s “We’re Not Gonna Take It” and Taylor Swift’s “Look What You Made Me Do.”

“As you can see, the solidarity is here,” said Chase Sparkman, a quality-assurance worker. “I’m expecting my union brothers and sisters to stand shoulder to shoulder, arm in arm, and let our company know that, hey, we deserve more.”

The machinists make $75,608 per year on average, not counting overtime, and that would rise to $106,350 at the end of the four-year contract, according to Boeing.

However, the deal fell short of the union’s initial demand for pay raises of 40% over three years. The union also wanted to restore traditional pensions that were axed a decade ago but settled for an increase in Boeing contributions to employee’s 401(k) retirement accounts.

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Boeing worker Adam Vogel called the 25% raise “a load of crap. We haven’t had a raise in 16 years.”

Broderick Conway, another quality-assurance worker and 16-year Boeing employee, said the company can afford more.

“A lot of the members are pretty upset about our first offer. We’re hoping that the second offer is what we’re looking for,” he said. “If not … we’re going to keep striking and stand up for ourselves.”

Machinists, like Chris, who declined to give his last name, told KIRO Newsradio they’re ready to hit the picket line.

“I’m going to vote ‘yes’ for strike, ‘no’ for the contract,” Chris said.

KIRO 7 previously caught up with a worker, who says the company’s offer does not go far enough to support workers financially.

“You shouldn’t have to go to the food bank to survive, especially when you’re skilled. You’re building planes,” the worker said.

The head of Boeing’s commercial-airplanes business, Stephanie Pope, tried earlier this week to discourage workers from thinking a strike would result in a better offer.

“We bargained in absolute good faith with the IAM team that represents you and your interests,” she said. “Let me be clear: We did not hold back with an eye on a second vote.”

Boeing Chief Financial Officer Brian West, speaking Friday at an investor conference in California, said the company was disappointed that it had a deal with union leadership, only to see it rejected by rank-and-file workers.

Vote took place Thursday: Who the Boeing strike will affect

Voting took place at union halls in Washington, Portland, Oregon, and a smattering of other locations.

Boeing believed it offered a significant benefit to the union by promising to build its next new plane in the Puget Sound area if workers ratified the contract. That plane — not expected until sometime in the 2030s — would replace the 737 Max. It was a key win for union leaders, who want to avoid a repeat of Boeing moving production of Dreamliners from the Seattle area to South Carolina.

The strike will stop production of the 737 Max, Boeing’s best-selling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Renton and Everett. It likely will not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.

TD Cowen aerospace analyst Cai von Rumohr said before the vote that it is realistic based on the history of Boeing strikes — the last two were in 1995 and 2008 — to figure that a walkout would last into mid-November, when workers’ $150 weekly payments from the union’s strike fund might seem low going into the holidays.

A strike that long would cost Boeing up to $3.5 billion in cash flow because the company gets about 60% of the sale price when it delivers a plane to the buyer, von Rumohr said.

Holden told members Monday the union got everything it could in bargaining and recommended approval of the deal “because we can’t guarantee we can achieve more in a strike.” But many of the rank-and-file remembered the concessions on pensions, health care and pay.

“They are upset. They have a lot of things they want. I think Boeing understands that and wants to satisfy a fair number of them,” said von Rumohr, the aerospace analyst. “The question is, are they going to do enough?”

Boeing has seen its reputation battered since two 737 Max airliners crashed in 2018 and 2019, killing 346 people. The safety of its products came under renewed scrutiny after a panel blew out of a Max during a flight in January.

And now it faces a strike that could cause it to fall farther behind European rival Airbus in orders and deliveries of new jetliners.

Editors’ note: This piece originally was published on Thursday, Sept. 12, 2024. It has been updated and republished multiple times since then.

Contributing: The Associated Press; KIRO 7; Steve Coogan, MyNorthwest; Luke Duecy, KIRO Newsradio