Boeing union says approves contract, ending over 7-week strike

SEATTLE: Striking workers at Boeing approved a new contract proposal on Monday (Nov 4), ending a more than seven-week stoppage that had cost the beleaguered aviation giant billions.
The International Association of Machinists and Aerospace Workers (IAM) District 751 said it had ratified the offer by a vote of 59 per cent after rejecting two prior offers.
The move will send some 33,000 Seattle-area employees back to work and restore operations at two major assembly plants at a time when Boeing is trying to recover from multiple setbacks.
The contract includes a 38 per cent wage hike, a US$12,000 signing bonus and provisions to lift employer contributions to a 401K retirement plan and contain health care costs.
But the contract does not restore Boeing’s former pension plan that had been sought by older workers.
Jon Holden, head of the Seattle union, described the agreement as a win for workers who were determined to make up for more than a decade of stagnant wages from prior negotiations that had enraged many rank-and-file workers.
“The strike will end and now it’s our job to get back to work and start building the airplanes, increase the rates and bring this company back to financial success,” Holden said at a news conference.
Holden described the contract as “rebalancing the scales in favour of the middle class” after earlier concessions to the company, according to an IAM press release.
Boeing CEO Kelly Ortberg welcomed the ratification, adding that management and workers must work together as “part of the same team”, according to a statement released by the company.
“We will only move forward by listening and working together,” Ortberg said. “There is much work ahead to return to the excellence that made Boeing an iconic company.”
The news was also cheered by President Joe Biden, who congratulated the union on the wage hike and provisions that “improves workers’ ability to retire with dignity”, according to a statement released by the White House.
“Good contracts benefit workers, businesses, and consumers – and are key to growing the American economy from the middle out and the bottom up,” Biden said.
Boeing staff can return as soon as Nov 6 and must be back on the job by Nov 12, the IAM said on social media platform X.
The strike had exacerbated Boeing’s already precarious outlook after a January incident in which a fuselage panel blew out mid-flight on a 737 MAX operated by Alaska Airlines.
There were no major injuries, but the episode plunged Boeing back into crisis after two earlier fatal MAX crashes, with US air safety regulators limiting production output until the company got its house in order.
In March, Boeing announced a management shakeup that included the exit of CEO Dave Calhoun, who was replaced in August by former Rockwell Collins chief Ortberg.
Ortberg has cautioned that a turnaround at Boeing would take time given travails that also include major cost management problems in defence contracts and problem-filled space missions.
In October, as Boeing reported a whopping US$6.2 billion quarterly loss, Ortberg described the need for a “fundamental culture change” at Boeing and said he was reviewing the company’s portfolio with an eye towards shrinking its mission in order to restore excellence.
Bu the IAM strike had threatened turnaround efforts under the new CEO.
Jo-Ellen Pozner, an associate professor at Santa Clara University’s business school, had warned ahead of the vote that another rejection by IAM workers could have plunged the company into deeper crisis.
But with the contract now ratified, “there is a way forward”, she said.
The IAM strike had been driven by worker exasperation after more than a decade of near stagnant pay – a problem exacerbated by higher inflation in recent years and higher living costs in the Seattle region, a growing tech hub.
The strike recently surpassed the 2023 United Auto Workers strike against Detroit carmakers to become the costliest in the 21st Century, according to Anderson Economic Group, which estimated the total economic hit at US$11.6 billion.