Boeing Workers Vote on Possible Strike to Halt Aircraft Production

Boeing is bracing for a crucial decision as 33,000 aircraft assembly workers, predominantly from the Seattle region, prepare to vote on a potential strike that could halt production of the company’s most popular aircraft.

The members of the International Association of Machinists and Aerospace Workers will vote on a contract proposal that offers 25% pay increases over the next four years. If the majority rejects the offer and two-thirds of voters opt to strike, production would come to a standstill starting Friday at 12:01 a.m. PDT.

While a strike would not lead to immediate flight cancellations or affect airline passengers directly, it would further tarnish Boeing’s reputation and financial standing in a challenging year marked by ongoing issues in its airplane, defense, and space operations.

In an attempt to avert the work stoppage, Boeing’s new CEO, Kelly Ortberg, implored workers on Wednesday, emphasizing that “no one wins” in such a scenario. He acknowledged the hardships the company faces, attributing some of the difficulties to its past errors.

“It’s clear that our business is experiencing tough times, and a strike could jeopardize our collective recovery,” Ortberg stated. He emphasized that the potential walkout could erode customer trust and hinder the firm’s ability to shape its future.

Despite the bargaining committee’s endorsement of the contract, Jon Holden, the president of IAM District 751, suggested earlier this week that workers might favor a strike. Many members have expressed dissatisfaction with the proposal on social media platforms.

The voting process is set to take place at union halls across Washington state, Portland, Oregon, and several other locations, with results anticipated to be announced later Thursday evening.

A strike would have immediate implications for the production of the 737 Max, Boeing’s flagship airliner, as well as the 777 and 767 cargo planes at factories located in Everett and Renton, Washington, near Seattle. Production of the 787 Dreamliners, constructed by nonunion employees in South Carolina, is likely to remain unaffected.

Aerospace analyst Cai von Rumohr from TD Cowen noted that historical context suggests a strike could persist into mid-November. This timing could lead workers to reconsider the financial implications of long-term strike pay, particularly as holiday expenditures approach.

Prolonged industrial action could strain Boeing’s finances significantly, potentially costing the company up to $3.5 billion in cash flow. Boeing typically realizes around 60% of the sale price upon delivering a plane, meaning any manufacturing halt would have severe financial consequences.

Although union negotiators unanimously recommended workers approve the tentative agreement reached over the weekend, the deal did not meet the initial demands of the union, which sought a 40% pay increase over three years and the reinstatement of traditional pensions that were eliminated a decade earlier.

Instead, the workers agreed to increased contributions to their 401(k) retirement plans from Boeing. Holden urged union members to back the deal, arguing that the union had pushed for the best possible outcome in negotiations and highlighted the uncertainty of achieving better terms through a strike.

Despite the negotiation efforts, many union members remain dissatisfied with past compromises made regarding pensions, health care, and wages.

“There is a palpable frustration among the workforce. Many feel they still have unmet needs,” said von Rumohr, reflecting on the current sentiments within the union. “The critical question now is whether Boeing will address enough of those concerns.”

Boeing’s reputation has already suffered significantly since two deadly crashes involving the 737 Max in 2018 and 2019, leading to the loss of 346 lives. Furthermore, safety issues resurfaced earlier this year when a panel blew off a Max during flight, prompting renewed scrutiny over the company’s aircraft reliability.