Boeing machinists end their strike. This is what they won in the form of salaries, bonuses

Laurie Aratani and Rachel Lerman
| Washington Post

Striking Boeing machinists ended their nearly two-month strike by voting Monday to accept a four-year agreement that locks in historic wage and benefit increases that substantially exceed what the company was offering before the strike began.

The union victory, which secured a 38 percent raise over four years and $12,000 bonuses for approving the contract, also puts Boeing’s new chief executive Kelly Ortberg in a better position to begin steering the company away from a cascade of mistakes and bad news. this year it damaged her reputation and worsened her financial problems.

Leaders of the 33,000-member International Association of Machinists and Aerospace Workers Districts 751 and W24 welcomed the agreement, which includes a guarantee that Boeing’s next new plane will be built in the Seattle area. More than 26,000 union members voted Monday, with 59 percent voting to accept the agreement, union district president John Holden said as the vote was announced in Seattle. His statement was met with applause and loud cheers from the audience.

Less than two weeks ago, 64 percent of union members voted against the company’s proposal, which included a 35 percent pay increase and a $7,000 signing bonus. The strike began on September 13 after IAM members decisively rejected Boeing’s initial offer of a 25 percent pay increase over four years.

“We can hold our heads high,” Holden said. “We all persevered and achieved what we have not been able to achieve for the last 22 years.”

In a message sent to employees after the vote was announced, Ortberg said the company was pleased to make the deal: “We will move forward only 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.”

By the end of the four-year contract, average annual wages for machinists, excluding overtime, will rise to $119,309 from $75,608 by the end of the four-year contract, according to Boeing. The new contract also includes paid parental leave and restores the annual bonus program that Boeing eliminated from its first offer in September.

But the deal does not include restoring the traditional pension plan that machinists abandoned in 2014 amid threats from Boeing that the company would move aircraft production out of the Seattle region unless workers agreed to end the program.

The return of pensions has been a key sticking point for some union members. But such programs, once seen as a way to retain workers, are becoming increasingly rare as the costs of maintaining them rise. Striking auto workers also demanded the return of pensions in 2023 as part of their negotiations, but ultimately agreed to a deal that did not include them.

The Boeing union said workers could return to work as early as Wednesday, but given the length of the strike, experts say ramping up production of the plane could take months. After the 2008 IAM strike, which lasted 54 days, Boeing took two years to resume normal operations.

President Joe Biden congratulated the company and union on reaching the agreement in a statement. The administration has been closely monitoring the negotiations, with Acting Labor Secretary Julie Su helping to bring the two sides together after talks fell apart last month and then again last week, just days before Boeing made its latest offer.

The end of the strike removes one obstacle to the company’s recovery, but its problems are far from over. Last month the company reported a loss of $6.2 billion for its most recent quarter ended in September, and analysts estimate that a strike by members of the company’s largest employee union is costing the company $1 billion a month.

In his first extended speech since becoming CEO in August, Ortberg said last month that Boeing would be smaller and more focused on its core business of making airplanes in the future. As part of this, it has already taken cost-cutting measures, including a 10 percent cut to its 171,000 workforce expected to take effect early next year.

The strike has halted production of some of the company’s best-selling planes, including the 737 Max and the wide-body 777. Boeing must resume production of those planes if it hopes to escape a financial tailspin that has threatened its investment-grade credit rating.

Ortberg also said he may try to sell some of the company’s divisions. Last month, the Wall Street Journal reported that Boeing was considering selling parts of its space division, including the troubled Starliner program.

After members voted down the previous two proposals, union leaders stood by and urged them to approve Boeing’s latest proposal, warning that negotiators had “extracted everything they could in negotiating and abandoning our workforce.”

“We believe we have secured one of the strongest contracts in the aerospace industry,” union leaders wrote in a letter to members Saturday. “Many other negotiators will be inspired by our strength and the results you all have achieved.”

In a message to employees Friday, Ortberg emphasized the need for unity.

“It’s time for us all to come together and focus on rebuilding the business and producing the best airplanes in the world,” he wrote. “A lot of people depend on us.”

Boeing appears to have stabilized after two fatal crashes involving its 737 Max jets in 2018 and 2019 that killed 346 people and increased regulation of the company. The pandemic was another setback for the company, which posted a loss of nearly $12 billion in 2020. Boeing continued to lose money, but trimmed those losses to just over $2 billion by 2023.

But after a door panel blew out on a 737 Max operated by Alaska Airlines in January, problems began to multiply. Investigations found deficiencies in safety oversight programs that led the Federal Aviation Administration to place limits on the number of 737 Max planes it could produce.

The company also agreed to plead guilty to one count of fraud after the Justice Department found it violated the terms of a 2021 plea agreement related to the 737 Max crashes in Indonesia and Ethiopia.