The Boeing strike continues as the latest deal was rejected by 64% of the union

Workers at a Boeing factory have voted against the company’s latest contract offer and remain on the picket line six weeks into a strike that has halted production of Aerospace’s best-selling planes.

Local union leaders in Seattle said 64% of members of the International Association of Machinists and Aerospace Workers who voted Wednesday voted against accepting the contract.

“After 10 years of sacrifice, we still have some ground to make, and we hope to do so by resuming negotiations soon,” said Jon Holden, head of the IAM District 751 union, in a statement Wednesday evening. “This is workplace democracy – and clear evidence that there are consequences when a company mistreats its employees year after year.”

A Boeing spokeswoman said officials had no comment on the vote.
The labor dispute comes amid an already challenging year for Boeing, which has been the focus of several federal investigations after a crew member blew up a 737 Max during an Alaska Airlines flight in January.

The strike has deprived the company of much-needed cash it receives from delivering new planes to airlines. On Wednesday, the company reported a third-quarter loss of more than $6 billion.

The union machines include the 737 Max, Boeing’s best-selling airliner, as well as the 777 or “triple-seven” and 767 freighters at factories in Renton and Everett, Washington.

The latest rejected offer included a 35% pay rise over four years. The version that union members rejected when they voted to strike last month revealed that it has increased by 25% in four years.

The union, which initially wanted a 40% wage increase over three years, said the annual increase in the revised proposal would be 39.8%, when combined.

Boeing said the average annual salary for a mechanical engineer is currently $75,608.

Boeing employees told Associated Press reporters that what’s holding them back is the company’s refusal to reinstate a standard pension plan that was suspended a decade ago.

“Pension should have been the priority. “We all said that was our priority, along with wages,” said Larry Best, a 38-year-old customer quality coordinator at Boeing, speaking on the pickup line outside the Boeing factory in Everett, Washington. “Now is the perfect opportunity to get our pensions back, and we all need to stay out and hold our heels.”

Theresa Pound, a 16-year Boeing veteran, also voted against the deal. He said the health plan has become too expensive and his pension benefits are not expected to be enough, even if they are combined with a 401(k) retirement account.

“I put more time into this place than was necessary. I really have blood, sweat and tears working for this company,” said the 37-year-old. “I am looking to work until I am 70 years old because I have this which makes me unable to retire due to what happens in the market.”

The strike began on September 13 and served as an early test for Boeing CEO Kelly Ortberg, who became chief executive in August.

In his first remarks to investors, Ortberg said earlier Wednesday that Boeing needed a “fundamental culture change,” and extended his plan to revive the aerospace giant after years of heavy losses and damage to its reputation.

Ortberg reiterated in a message to employees and on the earnings call that he wants to “reset” management-labor relations “so that we’re not as disconnected in the future.” He said company leaders need to spend more time in factories to know what is going on and “prevent problems from spreading and work better together to identify, fix and understand the cause.”

Ortberg, who is outside Boeing and once ran Rockwell Collins, a maker of airplanes and flight controllers for the airline and military, said Boeing is at a crossroads.

“The trust of our company is gone. We are burdened with too much debt. “We had a big mistake in our performance throughout the company, which disappointed many of our customers,” he said.

But Ortberg also highlighted the company’s strengths, including a backlog of aircraft orders worth half a billion dollars.

“It will take time to restore Boeing to its former legacy, but with the right focus and culture, we can become an iconic company and aerospace leader again,” he said.

In recent weeks, Ortberg has announced large-scale layoffs — about 17,000 people — and a plan to raise enough cash to avoid filing for bankruptcy.

Boeing hasn’t had a profitable year since 2018, and Wednesday’s numbers represent the second worst quarter in the manufacturer’s history. Boeing lost $6.17 billion in the period ended September 30, with an adjusted loss of $10.44 per share. Analysts polled by Zacks Investment Research had expected a loss of $10.34 per share.

Revenue came in at $17.84 billion, in line with Wall Street estimates.

The company burned nearly $2 billion in cash per quarter, weakening its balance sheet, which is loaded with $58 billion in debt. Chief Financial Officer Brian West said the company won’t be profitable until the second half of next year.

Boeing’s fortunes soured after two of its 737 Max planes crashed in October 2018 and March 2019, killing 346 people. Safety concerns were renewed in January, when a panel blew up the Max during an Alaska Airlines flight.

Ortberg needs to convince federal regulators that Boeing is fixing its safety culture and is ready to ramp up production of the 737 Max — a key step to bring in much-needed cash. That will not happen, however, until the striking workers return to their jobs.

At the start of the strike, Boeing made what it called “good and final”. The proposal included a 30% wage increase over four years, and angered union leaders because the company had announced it to striking workers through the media and set a deadline for approval.

Boeing backed down and gave the union more time. However, many workers insisted that the offer was not good enough. The company withdrew the proposed contract on October 9 after negotiations broke down, and the two sides announced the latest proposal on Saturday.

Charles Fromong, a mechanic who has worked at Boeing for 38 years, said Wednesday night after the results were announced that the company needs to take care of its employees.

“I feel sorry for young people,” he said. “I have spent my life here and I am preparing to go, but they deserve a pension and I should be promoted.

Boeing’s last strike, in 2008, lasted eight weeks and cost the company about $100 million a day in lost profits. The 1995 strike lasted 10 weeks.

Koenig reported from Dallas. Lindsey Wasson in Everett, Washington, contributed to this report.

-David Koenig and Manuel Valdes, The Associated Press