Boeing’s factory workers have decisively voted against accepting a contract proposal, prolonging a strike that has lasted over five weeks and dealing a significant blow to new CEO Kelly Ortberg’s strategy to stabilize the aerospace company’s finances.
With a 64% majority, workers dismissed the offer that promised a 35% wage increase over the next four years, marking a considerable defeat for CEO Ortberg, who assumed leadership in August with promises of fostering better relations with the workforce.
This rejection, following an overwhelming 95% opposition to an initial contract last month, highlights longstanding discontent among employees who have felt shortchanged by past negotiations, exacerbating the company’s financial troubles.
Union officials expressed their readiness to reengage in talks with Boeing immediately, marking the first significant negotiation since 2014, when Boeing threatened to relocate production to secure a deal that ultimately phased out conventional pension plans.
The union’s demands include a 40% wage hike and the reinstatement of defined-benefit pensions, emphasizing the workers’ complaints over stagnant wages and perceived corporate excess in executive bonuses and stock buybacks over the last decade.
“This membership has gone through a lot… there are some deep wounds,” the union’s lead contract negotiator Jon Holden told reporters after the vote.
“I want to get back to the table. Boeing needs to come to the table as well. Hopefully, we can have some fruitful discussions with the company and Mr. Ortberg to try and resolve this.”
Approximately 33,000 machinists at Boeing’s West Coast facilities ceased work on September 13, stopping the production of the popular 737 MAX and the 767 and 777 wide-body aircraft.
As the largest U.S. exporter and facing an imminent presidential election on November 5, Boeing and its largest union are under pressure to finalize a deal during this politically sensitive period.
Earlier in the month, an impasse between Boeing and the International Association of Machinists prompted Acting U.S. Secretary of Labor Julie Su to facilitate a new vote on the latest contract offer after she met with both parties in Seattle.
Following the union’s vote, Holden indicated he would request additional support from the White House to strengthen their negotiating position with Boeing.
Aviation analyst Scott Hamilton remarked on the rejection of the initial contract offer, stating, “After the first contract offer was rejected, the honeymoon was over on the labor reset. This further validates that,” said Scott Hamilton, an aviation consultant.
“It’s bad news for everybody—Boeing, labor, suppliers, customers, even the national economy.”
Boeing is the largest customer for a U.S. aerospace supply chain that is already under significant financial strain.
Spirit AeroSystems, a major fuselage supplier, has cautioned that continued strikes past November could result in significant layoffs and even more severe furloughs.
Currently being acquired by Boeing, the company has preemptively initiated a 21-day furlough for 700 of its employees.
Boeing is moving forward with plans to lay off 17,000 workers and is nearing a strategy to secure up to $15 billion from investors to maintain its investment-grade credit rating, as ongoing production delays compel airlines to adjust their flight schedules.
