Boeing is preparing to learn Thursday that 33,000 aircraft assembly workers, most of them in the Seattle area, are going on strike and shutting down production of the company’s best-selling planes.
Members of the International Association of Machinists and Aerospace Workers plan to vote to approve a contract offer that includes a 25% pay increase over four years. If the factory workers reject the contract and two-thirds of them vote to strike, the work stoppage will begin on Friday at 12:01 am PDT.
The walkout won’t cause flight cancellations or directly affect airline passengers, but it could be another blow to Boeing’s reputation and finances in a year marked by problems in its aircraft, defense and aerospace operations.
New CEO Kelly Ortberg made a last-ditch effort to avoid a strike, telling mechanics Wednesday that “no one wins” in the walkout.
“At Boeing, it’s no secret that our business is in difficult times, in part because of our past mistakes,” he said. “By working together, I know we can get back on track, but a strike could jeopardize our recovery together, destroy trust in our customers and disrupt our ability to decide our future together.”
Although the bargaining committee negotiating the contract recommended approval, IAM District 751 President Jon Holden predicted earlier this week that workers would vote to strike. Many of them have filed complaints about this agreement on social media.
Voting will be done in union halls in the state of Washington, Portland, Oregon, and elsewhere, and the results are expected to be released Thursday night.
The strike will halt production of the 737 Max, the company’s best-selling aircraft, as well as the 777 or “triple-seven” and the 767 freighter at factories in Everett and Renton, Washington, near Seattle. It likely won’t affect Boeing 787 Dreamliners, which are built by non-union workers in South Carolina.
TD Cowen aviation analyst Cai von Rumohr said it is reasonable based on Boeing’s history of strikes to expect the walkout to continue until mid-November, when workers’ $150 weekly payments from the union’s strike fund could be seen as low as the holidays roll in.
A prolonged strike could cost Boeing as much as $3.5 billion in cash flow because the company receives about 60% of the sale price when it delivers the plane to the buyer, von Rumohr said.
Union negotiators unanimously recommended that workers ratify the tentative agreement reached over the weekend.
Boeing has promised to build its next new airplane in the Puget Sound area. That plane — not expected until sometime in the 2030s — will replace the 737 Max. That was an important win for union leaders, who want to avoid a repeat of Boeing’s production of Dreamliners from Everett to South Carolina.
However, the agreement fell short of the union’s initial demand for a 40% wage increase over three years. The union also sought to restore traditional pensions that were eliminated a decade ago but ruled out increasing Boeing’s contributions to workers’ 401(k) retirement accounts.
Holden told members Monday that the union had gotten everything it could in negotiations and recommended ratifying the agreement “because we can’t guarantee we can get more out of the strike.”
However, many union members are still unhappy about the pension, health care and wage agreements.
“They are sad. There are many things they want. I think Boeing understands that and wants to satisfy a fair amount of them,” says aerospace analyst von Rumohr. “The question is, will they do enough?”
Boeing has seen its reputation damaged since the crashes of two 737 Max planes in 2018 and 2019, killing 346 people. The safety of its products was re-examined after the team exploded the Max during a flight in January.
-David Koenig, AP Airlines writer
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