Tuesday 10 September 2024

Boeing’s Labor Deal Faces Rejection as Workers Threaten Strike: ‘Employees Feel Shafted,’ Say Union Leaders

As the Boeing Machinists’ union prepares to vote on a new labor contract this week, tensions have hit a boiling point, with widespread dissatisfaction among Boeing’s 33,000 machinists. The tentative agreement, announced on Sunday, promises a 25% wage increase over the next four years, reduced health care premiums, and a signing bonus. However, many workers say the deal doesn’t go far enough to address their financial needs and recover losses from a decade of concessions, setting the stage for a potential strike that could bring Boeing’s production lines to a standstill.

Union President Jon Holden, who leads the International Association of Machinists (IAM) District 751, expressed a grim outlook ahead of Thursday’s vote. “The response from people is it’s not good enough,” Holden told The Seattle Times. “Right now, I think it will be voted down, and our members will vote to strike.”

The Contract That Sparked the Unrest

At the heart of the discontent is the gap between worker expectations and the actual terms of the contract. The proposed wage increases — 25% over four years — are seen by many as inadequate in light of inflation and a decade of stagnant wages. Boeing employees, particularly those in Seattle and Everett, have seen the cost of living soar while their wages remained stagnant. “We deserve more than what’s being offered. After 10 years of losing ground, we’re just trying to catch up,” one 34-year Renton mechanic said.

Francis King, a machinist with 37 years of experience, echoed these sentiments, stating, “Bottom line, it’s absolutely unacceptable. The inflation rate’s at 4%, and they’re offering the same for the second and third years.” Workers are particularly angered by the fact that the performance-based bonus program, known as the Aerospace Machinists Performance Program (AMPP), would be eliminated under the new contract. This bonus was often a critical part of employee compensation, providing up to 4.6% in additional annual income. “They’ve taken away our incentive bonuses, and that’s going to hurt,” Rob Davis, a mechanic in Everett, explained.

A Decade of Concessions

Much of the frustration stems from the painful concessions Boeing workers agreed to in the last decade. In 2014, the IAM negotiated a contract extension that increased healthcare costs and froze pensions, which left many workers feeling betrayed. “It’s hard to come off 10 years when you lost so many things that were critical,” Holden said in reference to the 2014 contract, acknowledging the lasting bitterness from that period.

Workers were particularly disappointed by the lack of a pension restoration in the new agreement. “You need to get that pension back,” King added. “Some other companies doing the same work have restored pensions, so it’s possible.” Many Boeing employees feel the pension plan was an essential part of their financial future, and its absence in this new deal leaves them uncertain about their long-term security. “If they can pay a CEO $35 million a year, that’s what, the best they can do?” lamented Alexander, another union machinist.

Boeing’s Struggles Amid Labor Tensions

Boeing itself is facing an array of internal and external challenges. The company is still recovering from the fallout of its 737 MAX crisis and is now grappling with significant production issues and regulatory scrutiny. Its credit rating teeters just above junk bond status, and a strike could spell disaster for the company’s already fragile financial state. New CEO Kelly Ortberg, who took over in August, has been tasked with steering Boeing through these challenges, but the looming threat of a strike could derail those efforts.

Ortberg personally intervened during the labor negotiations to secure a commitment on job security, promising that Boeing’s next plane would be built in the Puget Sound region if it were launched during the contract’s four-year term. “He did give a commitment on job security,” Holden said, acknowledging Ortberg’s role in the talks. “But now we have work to do to make it worth something.”

Still, many workers remain skeptical. As Francis King pointed out, “We’re just not seeing enough in this contract to make us feel secure about our future.” Others worry that Boeing’s recent quality issues — including a door plug incident on an Alaska Air 737 MAX — are indicative of deeper problems within the company that won’t be solved by a new contract alone.

Strike Preparations Are Underway

If union members vote down the contract, a strike could begin as early as Friday, and workers are already preparing for that possibility. In Everett, Renton, and other Boeing locations, machinists have been holding break-time marches to demonstrate their dissatisfaction. “There’s a lot of frustration in the building,” said Brandon Felton, a machinist who participated in the marches. “We’re all together on this, and we’re ready to walk.”

Leaflets circulating through Boeing’s factories encourage workers to reject the deal and authorize a strike. One leaflet, viewed by Bloomberg, urged machinists to “Stand strong” and push for a 40% wage increase, along with the restoration of pensions and a seat on Boeing’s board. “We deserve a fair deal,” the leaflet declared, reflecting the sentiments of many Boeing employees.

The $3,000 signing bonus offered in the current contract has also been a point of contention, with workers recalling the $15,000 bonus they received in 2014. “A $3,000 bonus in 2024 is laughable,” said one Boeing employee, comparing it to inflation and rising costs. “Every employee I’ve spoken to said they are voting NO,” added another, emphasizing the collective anger over the proposed contract terms.

The Impact of a Potential Strike

A strike at Boeing could have far-reaching consequences, not just for the company but for the broader U.S. economy. Boeing employs more than 140,000 people globally and plays a critical role in both the commercial and defense sectors. If the strike proceeds, Boeing’s production of the 737 MAX and 777X aircraft would come to a halt, causing disruptions across the entire aerospace industry. The company would also face mounting debt, exacerbating its already precarious financial situation.

A strike would also be a significant setback for CEO Kelly Ortberg, who was brought in to stabilize Boeing after years of turmoil. His ability to negotiate labor peace and keep production running smoothly is crucial to Boeing’s recovery, particularly as it faces increased scrutiny from regulators and customers. A protracted strike could delay Boeing’s plans to ramp up production of its best-selling jets and further weaken its competitive position in the global market.

Will Workers Accept the Deal?

For now, all eyes are on Thursday’s vote. While union leaders, including Holden, are recommending that members accept the contract, many workers feel that the deal doesn’t go far enough to address their financial concerns and restore the benefits lost over the past decade. As machinist Francis King succinctly put it, “We need to hold strong. This deal isn’t enough, and we deserve better.”

Should the workers vote to strike, Boeing will not only face the challenge of resolving the labor dispute but also the financial and operational consequences of a walkout that could cripple its production lines and stall its long-term recovery efforts.

In the words of Jon Holden, “It’s in the members’ hands now. We will use the power they give us to fight for more.”



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