Boeing’s factory personnel are set to cast their votes on a new contract proposal this Wednesday, which if approved, may terminate a strike that has lasted over five weeks, a key development as the aircraft manufacturer grapples with a serious financial downturn. Some market watchers cast doubt over whether the proposed contract will gain adequate backing to be approved, referencing social media posts and picket line feedback from labourers.
More than 30,000 machinists in Boeing’s West Coast facilities ceased operations on the 13th of September, resulting in a stoppage of the production of the best-selling 737 MAX and 767 and 777 wide-body aircraft. From that point, Boeing and the leadership of the International Association of Machinists and Aerospace Workers association have been entangled in often heated discussions, with both factions blaming each other for sinking dialogue.
Prior to the 8 am start of voting, workers assembled to cast their vote near the 737 MAX manufacturing site in Renton, Washington. The voting, ending at 5 pm, gives workers the opportunity to either approve or decline the deal, requiring a simple majority of 50 per cent plus one to resolve the outcome. Approval of the proposal signifies the closure of the strike.
On its Wednesday quarterly call, Boeing revealed its anticipation of cash burn in 2025, even as CEO Kelly Ortberg acknowledged the lack of a swift resolution for the beleaguered aircraft manufacturer. Potential downgrading of Boeing’s escalating debt to “junk” status by rating agencies, should the strike persist, has been reported.
Boeing’s latest offer involves a 35 per cent salary increase over four years, a ratification bonus of $7,000 (€6,400), a refreshed incentive scheme, and augmented contributions to employee’s 401(k) retirement schemes. Although the pay promotion and ratification bonuses surpass those in an earlier offer, which was refused by 95 per cent of workers in the previous month’s vote, they are still short of the 40 per cent increase in pay over four years and the re-establishment of the defined-benefit pension lost in 2014 sought by the union.
Approximately 40 per cent of the labour force were recipients of the defined-benefit pension, according to the union. Reuters communicated with 20 laborers currently on strike in the Seattle region prior to or following their vote casting – three of them pledged their acceptance of the deal, 14 declared they would refuse the proposal, with three remaining uncertain.
Twenty-year-old mechanic Manuel Munoz, who is currently on strike, expressed his decision to vote against the contract in a bid to secure a higher wage increment. He believes that they presently have an advantage over Boeing and it’s beneficial to continue seeking improved terms.
Many employees harbour resentment from the previous negotiation round in 2014. During that period, Boeing exploited the potential relocation of the new 777 version’s production to force the termination of conventional pensions. This has left a lasting bitterness, as Kevin Roehl, a 35-year veteran at Boeing working on the 737, noted. His comments highlighted that more grievances stem from past contracts rather than the present one. Despite this, he plans to vote in favour of the recent deal due to concerns about his health following Boeing’s termination of worker’s insurance amidst the strike.
The first strike Boeing has seen in 16 years is costing the firm a staggering $100 million daily, according to business analysts. This industrial action has also created a ripple effect throughout the aerospace supply sector, with fears of extensive job cuts if the current contract gets rejected. Andrew Flores, head of family-owned, California-based supplier Independent Forge Company, gave voice to this concern. The ongoing strike has already caused his company to lay off several of its 26 workers.
This text comes as a report from Reuters and maintains copyright by Thomson Reuters, 2024.