Stricken Boeing Finally Reaches Agreement With Aircraft Workers Union

Boeing plant workers voted to accept the contract offer and end their contracts. strike after more than seven weekspaving the way for the aerospace giant to restart production of its popular airliner and raise much-needed cash.

Leaders of the International Association of Machinists and Aerospace Workers’ Seattle district said 59% of voting members agreed to approve the company’s fourth formal proposal, while a third was put to a vote. The agreement includes a 38% wage increase over four years, as well as ratification and performance bonuses.

However, Boeing refused to comply with the strikers’ demand to restore the company’s pension plan, which was frozen almost ten years ago.

Ratification of the contract on the eve of Election Day cleared the way for a major U.S. manufacturer and government contractor to reopen Pacific Northwest assembly lines that had been idle for 53 days due to the strike.

Bank of America analysts estimated last month that Boeing was losing about $50 million a day during the now-ended strike, which did not affect the nonunion plant in South Carolina where the company makes the 787 plane.

Boeing CEO Kelly Ortberg said in a message to employees that he was pleased to reach an agreement.

“While the last few months have been difficult for all of us, we are all part of the same team,” Mr. Ortberg said. “We will only move forward by listening and working together. There is still a lot of work ahead to return to the excellence that has made Boeing an iconic company.”

The union says the 33,000 workers it represents could return to work as early as Oct. 6 or as early as Nov. 12. Mr Ortberg said it could take “a couple of weeks” for production to resume, in part because some workers may need to be retrained.

The average annual salary for Boeing machinists is currently $75,608 and will eventually rise to $119,309 under the new contract, according to the company. The union said the total cost of the promised wage increases would be an increase of more than 43% over the life of the agreement.

“It’s time for us to come together. This is a victory,” IAM District 751 President John Holden told members as he announced the vote count late on Oct. 4. “You stood firm, persevered and won.”

Reaction was mixed even among union members who voted to accept the contract.

Although she voted “yes,” Seattle calibrator Yip Bolaño said the result “probably wasn’t a win.” Ms. Bolaño said she and her fellow workers made a wise but infuriating choice in accepting the offer.

“We were threatened by a company that was crippled, dying, bleeding on the ground, and we, as one of the largest unions in the country, could not even get two-thirds of our demands from them. It’s humiliating,” she said.

For others, such as William Gardiner, the laboratory’s calibration manager, the revised proposal was cause for celebration.

“I’m very encouraged by this vote,” said Mr. Gardiner, who worked for Boeing for 13 years. “We haven’t fixed everything – that’s normal. Overall, this is a very positive contract.”

Union leaders backed the latest proposal, saying they believed they had gotten all they could through negotiations and a strike. Along with the pay increase, the new contract gives each worker a $12,000 ratification bonus and retains the performance bonus that the company wanted to eliminate.

“Now is the time for our members to build on these gains and confidently claim victory,” the local union district said before the vote. “We believe that asking members to continue the strike any longer would be wrong as we have had so much success.”

President Joe Biden congratulated Machinists and Boeing on reaching an agreement that he said supports fairness in the workplace and improves workers’ ability to retire with dignity. The contract, he said, is important to Boeing’s future as “a critical part of America’s aerospace sector.”

Biden’s acting Labor Secretary, Julie Su, has intervened in the negotiations several times, including when Boeing made its latest offer last week.

An ongoing strike would plunge Boeing into even greater financial danger and uncertainty. Last month, Mr. Ortberg announced plans to lay off about 17,000 people and sell shares to prevent the company’s credit rating from being downgraded to junk status.

The strike began on September 13, when the vast majority (94.6%) rejected the company’s offer of a 25% wage increase over four years, far less than the union’s initial demand for a 40% wage increase over three years.

Machinists voted against another proposal – a 35% raise over four years and still no pension renewal – on Oct. 23, the same day Boeing reported a third-quarter loss of more than $6 billion.

The contract refusals reflected bitterness built up after union concessions and modest wage increases over the past decade.

The labor standoff, the first strike by Boeing machinists since an eight-week strike in 2008, was the latest setback in a volatile year for the aerospace giant. The 2008 strike lasted eight weeks and cost the company about $100 million a day in deferred revenue. The 1995 strike lasted 10 weeks.

Boeing has been the subject of several federal investigations this year after a door seal came off on a 737 Max jet during an Alaska Airlines flight in January. Federal regulators have set limits on Boeing’s plane production that they say will remain in place until they feel confident the company can produce safely.

The door jam incident has renewed concerns about the safety of the 737 Max. Two planes crashed less than five months apart in 2018 and 2019, killing 346 people. The then-CEO, whose efforts to turn around the company failed, announced in March that he was resigning. In July, Boeing agreed to plead guilty to conspiracy to commit fraud to defraud regulators who approved the 737 Max.

Washington Gov. Jay Inslee said the Oct. 4 vote will put Boeing’s future back on a stronger footing.

“Washington is home to the world’s most skilled aerospace workers, and they have understandably taken a stand to demand the respect and compensation they deserve,” Mr. Inslee said in a statement congratulating the workers.

This story was reported by the Associated Press.