Boeing machinists recently voted against a new labor deal that would have provided them with a 35% wage increase over four years. This resulted in an extended strike that has halted most of the company’s aircraft production, leading to a $1 billion monthly cost to the company. The rejection of the contract by 64% of voters is a setback for Boeing, which reported a $6 billion quarterly loss and projected continued cash burn through 2025.
Boeing’s new CEO, Kelly Ortberg, had emphasized the importance of reaching a deal with the machinists to improve the company’s situation after facing safety and quality issues in recent years. Ortberg had announced plans to streamline the company by cutting 10% of its workforce.
The strike, involving more than 32,000 machinists, began in September after previous proposals were rejected. Workers were seeking higher pay due to increased living costs in the Puget Sound area and concerns about losing their pension plan in a previous contract. While the latest proposal included some benefits, it did not offer a pension.
The International Association of Machinists and Aerospace Workers union expressed dissatisfaction with the latest proposal and indicated the intention to return to the negotiating table. The strike has also impacted Boeing’s suppliers, with Spirit AeroSystems temporarily furloughing workers and warning of potential layoffs if the strike continues.
Overall, the strike is just one of many challenges facing Boeing, including regulatory scrutiny and production issues with its aircraft. The company continues to navigate these challenges while working to resolve the labor dispute with its machinists.
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