Boeing workers reject offer of 25% pay increase, demand more favorable conditions in strike

Tens of thousands of Boeing assembly machinists in Washington voted overwhelmingly to halt production and go on strike after negotiations between the International Association of Machinists and Aerospace Workers and Boeing failed to reach an agreement that would increase workers’ pay and benefits.

According to The Associated Press , 94.6% of voting workers rejected Boeing’s contract proposal, which included a 25% wage increase over four years. In addition, 96% of members voted in favor of a strike, surpassing the two-thirds majority required for such an action.

“We strike at midnight,” IAM President Jon Holden said Thursday at the conclusion of the vote, per The Washington Post . Cheers of “Strike! Strike! Strike!” echoed his sentiment.

Union demands unmet

More than 33,000 Boeing workers participated in the walkout, seeking improved pay, benefits and working conditions.

“We just want to be treated right and they’re not doing it,” Charles Fromong, a Boeing mechanic of more than 37 years, told The Washington Post. “So I guess we’re going to get it done.”

In addition to wage increases, Boeing’s proposed contract offered better health coverage, retirement benefits and a key union demand to build its next plane in Washington state.

However, per The Associated Press , this was not sufficient for the workers who began negotiations with Boeing with the demand to receive a pay increase of 40% over three years. They also sought the restoration of pension plans ceased 10 years ago.

Boeing said in a statement that it was eager to return to the negotiating table.

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” the statement said, per CNN . “We remain committed to resetting our relationship with our employees and the union.”

Boeing faces financial challenges

Boeing’s new CEO, Kelly Ortberg, is working to turn around the company after years of financial losses.

The company’s stock value has dropped by more than 60% in the last five years, and Boeing has not been profitable since 2018, reporting losses exceeding $33 billion, according to CNN.

Boeing’s public image has also suffered following accusations of poor safety standards. Earlier this year, the company pleaded guilty to federal fraud charges related to two fatal plane crashes in 2018 and 2019, which killed 346 people.

The strike is expected to further impact Boeing’s recovery.

The company’s last strike in 2008 lasted eight weeks and resulted in losses of approximately $100 million per day. Sheila Kahyaoglu, a Jefferies aerospace analyst, estimates that the current strike could cost Boeing around $3 billion, per The Associated Press .

Ortberg warned IAM negotiators that a strike could hurt both sides.

“For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” he said. “Working together, I know that we can get back on track, but a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.”

Despite recommending that members accept Boeing’s initial offer, IAM leadership stated their support for the workers’ decision to strike.

“We are incredibly proud of the hard work and dedication shown by the negotiating teams from District 751 and W24 and the unwavering solidarity of our membership,” they said in a statement . “Their tireless efforts have been on display throughout this entire process. Now, they will regroup and begin planning the next steps on securing an agreement that our membership can approve.”

“Our goal is to get a strong contract that meets the needs of our members,” they added.