Machinists on Wednesday rejected Boeing’s latest contract proposal, dashing hopes for an end to the nearly six-week walkout and further complicating the aerospace giant’s path to a more stable future.
The vote by members of the International Association of Machinists and Aerospace Workers districts 751 and W24 came on the same day the company reported a loss of more than $6 billion for the quarter that ended in September.
Boeing had hoped the sweetened deal, which included a 35 percent pay increase, enhanced health and retirement benefits and a $7,000 signing bonus, would be enough to end the walkout by 33,000 machinists, but some observers say they may have underestimated the mistrust and lingering resentment that remains among rank-and-file workers, particularly those who have been through previous rounds of contract negotiations.
“We have made tremendous gains in this agreement in many of the areas that our members said were important to them. However, we have not achieved enough to meet our members’ demands,” union district president Jon Holden said in Seattle as he announced the vote results Wednesday night. “We remain on strike.”
Machinists gathered at the Seattle union hall cheered and chanted “Strike!” at his announcement. The proposed contract was rejected by 64 percent of the vote.
At a polling location in Renton, Washington, earlier in the day, some workers said they were voting to reject the deal because the wage gains fell short. Many were also hoping for the restoration of a pension program.
“Trust in our company has eroded,” Kelly Ortberg said earlier Wednesday in his first extended public remarks since becoming Boeing’s chief executive in August. “We’re saddled with too much debt. We’ve had serious lapses in our performance across the company, which have disappointed many of our customers.”
On a conference call with analysts, Ortberg described Boeing, which reported a $6.2 billion third-quarter loss, as a company at a “crossroads” and said his mission is to turn “this big ship in the right direction.”
Throughout the day, a steady stream of white vans shuttled workers from the picket lines to the International Association of Machinists and Aerospace Workers (IAM) office in Renton, Washington, so they could cast their ballots. Workers said they weren’t sure which way the ultimate vote would land, but many said they were willing to continue striking for higher pay increases and the restoration of a pension program.
“It’s not quite there yet,” said Vivian Vo, one of several striking workers who cited the wage increases as a chief concern. “It’s a step in the right direction.”
With the strike now in its sixth week, workers say they are making ends meet by picking up part-time or seasonal jobs elsewhere — gig work options that weren’t as widely available during a 2008 walkout, which lasted 54 days.
Ortberg acknowledged deep problems facing the company beyond the strike, which has idled production of most of its commercial airliners. He said he is focused on restoring Boeing’s reputation — a task Ortberg said involves changing its culture and streamlining operations so employees are focused on its core business of building airplanes. Company leaders need to be closer to the people who design and build its products, out on factory floors, in back shops and in engineering labs, he said, solving problems before they fester.
“We need to know what’s going on, not just with our products but with our people,” Ortberg said.
The union plans to get back to the bargaining table with Boeing, Holden said after announcing the vote results Wednesday.
“I know that our members are critical to restoring this company back to financial health,” he said. “It is my goal to get our members back to work so that they can earn money, we can build airplanes and get this company back on track.”
Even before the strike, Boeing had been struggling financially. Including this quarter, it has reported losses of more than than $30 billion since 2019 after reporting earnings of more than $10 billion in 2018. On Oct. 11, Ortberg announced the first in a series of steps aimed at turning the troubled aerospace giant around: a 10 percent reduction in the company’s workforce — about 17,000 jobs. He said the company also would further delay the launch of its 777X plane, with the first deliveries expected in 2026.
Under the new contract proposal that machinists rejected Wednesday, unveiled over the weekend, the average annual machinist pay would rise to $116,272 from $75,608, according to figures provided by Boeing.
Though union negotiators did not endorse the deal, which needed a simple majority to pass, they told members the revised proposal “is worthy of your consideration.”
Given the significant role Boeing plays as a leading exporter and defense contractor, the Biden administration has been closely monitoring negotiations, and acting labor secretary Julie Su met last week with both sides. Union leaders credited Su with helping negotiate the updated proposal.
Analysts estimate the walkout, which has shut down production of some of the company’s best-selling jets, including the 737 Max, is costing Boeing $1 billion a month.
Machinists resoundingly rejected the company’s first offer of a 25 percent pay increase. Though it included a promise that Boeing would built its next new aircraft in the Seattle region — a key union demand — it fell far short of the 40 percent pay increase** **machinists sought. A second offer, which included a 30 percent pay increase, was never voted on.
Many veteran machinists remain mistrustful, remembering past rounds of negotiations in which Boeing executives threatened to move airplane production out of the Puget Sound region unless the union agreed to concessions, including eliminating the traditional pension program.
An end to the walkout that began Sept. 13 would have been a step forward for Boeing, which is struggling to restore confidence in its brand after a series of missteps, including the midair blowout of a door panel from one of its 737 Max jets in January. A “no” vote, however, now threatens to stall Boeing’s recovery effort and deepen its financial woes.
Even if the strike is settled, the company must still grapple with myriad legal, manufacturing and financial crises, stemming in part from fatal crashes of two of its 737 Max jets — one in 2018 in Indonesia and one in 2019 in Ethiopia — that killed 346 people. It has agreed to plead guilty to one count of fraud in connection with the 737 Max crashes, but the settlement must still be approved by a federal court judge.
Paywall.
Machinists on Wednesday rejected Boeing’s latest contract proposal, dashing hopes for an end to the nearly six-week walkout and further complicating the aerospace giant’s path to a more stable future.
The vote by members of the International Association of Machinists and Aerospace Workers districts 751 and W24 came on the same day the company reported a loss of more than $6 billion for the quarter that ended in September.
Boeing had hoped the sweetened deal, which included a 35 percent pay increase, enhanced health and retirement benefits and a $7,000 signing bonus, would be enough to end the walkout by 33,000 machinists, but some observers say they may have underestimated the mistrust and lingering resentment that remains among rank-and-file workers, particularly those who have been through previous rounds of contract negotiations.
“We have made tremendous gains in this agreement in many of the areas that our members said were important to them. However, we have not achieved enough to meet our members’ demands,” union district president Jon Holden said in Seattle as he announced the vote results Wednesday night. “We remain on strike.”
Machinists gathered at the Seattle union hall cheered and chanted “Strike!” at his announcement. The proposed contract was rejected by 64 percent of the vote.
At a polling location in Renton, Washington, earlier in the day, some workers said they were voting to reject the deal because the wage gains fell short. Many were also hoping for the restoration of a pension program.
“Trust in our company has eroded,” Kelly Ortberg said earlier Wednesday in his first extended public remarks since becoming Boeing’s chief executive in August. “We’re saddled with too much debt. We’ve had serious lapses in our performance across the company, which have disappointed many of our customers.”
On a conference call with analysts, Ortberg described Boeing, which reported a $6.2 billion third-quarter loss, as a company at a “crossroads” and said his mission is to turn “this big ship in the right direction.”
Throughout the day, a steady stream of white vans shuttled workers from the picket lines to the International Association of Machinists and Aerospace Workers (IAM) office in Renton, Washington, so they could cast their ballots. Workers said they weren’t sure which way the ultimate vote would land, but many said they were willing to continue striking for higher pay increases and the restoration of a pension program.
“It’s not quite there yet,” said Vivian Vo, one of several striking workers who cited the wage increases as a chief concern. “It’s a step in the right direction.”
With the strike now in its sixth week, workers say they are making ends meet by picking up part-time or seasonal jobs elsewhere — gig work options that weren’t as widely available during a 2008 walkout, which lasted 54 days.
Ortberg acknowledged deep problems facing the company beyond the strike, which has idled production of most of its commercial airliners. He said he is focused on restoring Boeing’s reputation — a task Ortberg said involves changing its culture and streamlining operations so employees are focused on its core business of building airplanes. Company leaders need to be closer to the people who design and build its products, out on factory floors, in back shops and in engineering labs, he said, solving problems before they fester.
“We need to know what’s going on, not just with our products but with our people,” Ortberg said.
The union plans to get back to the bargaining table with Boeing, Holden said after announcing the vote results Wednesday.
“I know that our members are critical to restoring this company back to financial health,” he said. “It is my goal to get our members back to work so that they can earn money, we can build airplanes and get this company back on track.”
Even before the strike, Boeing had been struggling financially. Including this quarter, it has reported losses of more than than $30 billion since 2019 after reporting earnings of more than $10 billion in 2018. On Oct. 11, Ortberg announced the first in a series of steps aimed at turning the troubled aerospace giant around: a 10 percent reduction in the company’s workforce — about 17,000 jobs. He said the company also would further delay the launch of its 777X plane, with the first deliveries expected in 2026.
Under the new contract proposal that machinists rejected Wednesday, unveiled over the weekend, the average annual machinist pay would rise to $116,272 from $75,608, according to figures provided by Boeing.
Though union negotiators did not endorse the deal, which needed a simple majority to pass, they told members the revised proposal “is worthy of your consideration.”
Given the significant role Boeing plays as a leading exporter and defense contractor, the Biden administration has been closely monitoring negotiations, and acting labor secretary Julie Su met last week with both sides. Union leaders credited Su with helping negotiate the updated proposal.
Analysts estimate the walkout, which has shut down production of some of the company’s best-selling jets, including the 737 Max, is costing Boeing $1 billion a month.
Machinists resoundingly rejected the company’s first offer of a 25 percent pay increase. Though it included a promise that Boeing would built its next new aircraft in the Seattle region — a key union demand — it fell far short of the 40 percent pay increase** **machinists sought. A second offer, which included a 30 percent pay increase, was never voted on.
Many veteran machinists remain mistrustful, remembering past rounds of negotiations in which Boeing executives threatened to move airplane production out of the Puget Sound region unless the union agreed to concessions, including eliminating the traditional pension program.
An end to the walkout that began Sept. 13 would have been a step forward for Boeing, which is struggling to restore confidence in its brand after a series of missteps, including the midair blowout of a door panel from one of its 737 Max jets in January. A “no” vote, however, now threatens to stall Boeing’s recovery effort and deepen its financial woes.
Even if the strike is settled, the company must still grapple with myriad legal, manufacturing and financial crises, stemming in part from fatal crashes of two of its 737 Max jets — one in 2018 in Indonesia and one in 2019 in Ethiopia — that killed 346 people. It has agreed to plead guilty to one count of fraud in connection with the 737 Max crashes, but the settlement must still be approved by a federal court judge.