Boeing Workers to Vote on Improved Contract Offer Amid Ongoing Strike
Oct 23, 2024
Tens of thousands of Boeing machinists are set to vote this week on a new contract offer, which could potentially end their weeks-long strike. Last month, workers rejected a previous proposal by a wide margin, so it’s uncertain how they’ll vote this time.
The new offer from Boeing includes a 35% pay raise over four years, an improvement from the 25% raise offered previously, according to the International Association of Machinists and Aerospace Workers (IAM), which represents 33,000 Boeing employees. However, the offer still falls short of the union’s request for a 40% pay increase.
The proposal also boosts Boeing’s contributions to workers’ 401(k) retirement plans but does not meet the demand to bring back the company’s pension plan.
Labor experts believe this new offer has a better chance of being accepted by workers, especially given the improved terms and the financial strain on both the employees and Boeing during the strike. However, it’s hard to predict how workers will feel given the high stakes of the ongoing conflict.
“This is a much better offer than Boeing’s previous one,” said Henry Harteveldt, a travel industry analyst at Atmosphere Research Group. “It doesn’t give workers everything they want, but it’s a big step forward.”
When asked for a comment, Boeing referred to a statement on its website, saying, “We look forward to our employees voting on the negotiated proposal.”
The union also issued a statement, acknowledging the help of Acting U.S. Secretary of Labor Julie Su in reaching the proposal and encouraging workers to consider it.
Both Boeing and the workers have lost money during the five-week strike. Union members have received just $250 per week from the strike fund, a sharp decrease for many. For example, mid-level machinists typically earn $20 an hour, or $800 for a full workweek, while higher-paid workers earn nearly $2,000 per week.
“Being on strike for weeks changes how you see things,” said Art Wheaton, director of labor studies at Cornell University. “Contract offers start looking better after standing in the cold for a month or two.”
The strike has also hit Boeing hard. The company has been losing about $108 million per day, and investment bank TD Cowen estimates the total losses could reach $5.5 billion if the strike lasts 50 days. So far, it’s been 38 days.
In response to the strike, Boeing announced furloughs and pay cuts for some white-collar employees last month. The company’s CEO, Kelly Ortberg, also revealed plans to cut 17,000 jobs, or about 10% of Boeing’s global workforce.
“That’s a real wake-up call for workers,” said Jake Rosenfeld, a sociology professor at Washington University in St. Louis who studies labor movements. “It shows that Boeing is feeling the pressure.”
Some workers, however, may see Boeing’s recent concessions as a sign that they have more leverage to push for a better deal. “They’ve got more power than they’ve had in years,” said Richard Aboulafia, managing director at aerospace consulting firm AeroDynamic Advisory. “That’s the risk—they might hold out for more, even if it’s not realistic.”
Strikes at Boeing have historically been long. The most recent one, in 2008, lasted 57 days. On average, strikes at Boeing in the Pacific Northwest have gone on for about 60 days, according to a report by Bank of America Global Research.
The union vote is scheduled for Wednesday. If a majority of workers approve the new contract, the strike will end.
Boeing’s stock rose by as much as 5% on Monday, indicating that many investors believe the workers will accept the deal. But Aboulafia warned that the stock market’s optimism doesn’t necessarily reflect the workers’ views. “They’re getting a lot of what they asked for,” he said. “The question is whether it’s enough for them to say yes.”
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