A strike by Boeing mechanics has crippled the planemaker since the walkout began nearly six weeks ago. Union members overwhelmingly rejected the latest contract offer as the strike continued.
Mario Dama/Getty Images
Hide title
Change the title
Mario Dama/Getty Images
SEATTLE – Boeing Mechanics Voted to reject The company’s latest contract offer on Wednesday extended the strike, which had already lasted more than 40 days.
The deal – voted for by 64% of union members – will mean a significant pay rise for the 33,000 people on strike. Those workers instead dealt another blow to Boeing, which reported a big quarterly loss on Wednesday.
“When a company mistreats its workers year after year there are consequences,” John Holden, president of Machinists and Aerospace Workers International Union District 751, said in a statement announcing the vote.
“Boeing workers say they are fully and strongly committed to rebalancing it by winning back much of what has been taken away by the company for more than a decade,” Holden said.
The vote came on the same day that Boeing posted a $6 billion loss in the third quarter of this year, one of the worst quarters in the company’s history. Those disappointing results were the result of a strike that halted production at Boeing’s factories in the Pacific Northwest.
But Boeing’s problems run deeper than that. Even before the strike, the company was dealing with quality control and production issues in its commercial airline operations. The company reported a $2 billion loss in its defense and aerospace business.
“We’re at a crossroads,” Boeing CEO Kelly Ortberg said on a conference call with analysts. “We need to reset priorities and create a leaner, more focused organization.”
Ortberg has kept a low profile since taking over as CEO two months ago. That changed on Wednesday, when Ortberg laid out his thinking in a conference call and television interview. He talked about rebuilding Boeing’s culture, putting managers closer to engineering labs and factory floors.
“The first thing we need to do is stabilize the business. And obviously, getting past the IAM strike is the first big step in doing that,” Ortberg told CNBC. Back to building airplanes, delivering good airplanes.
Union members rejected Boeing’s contract proposal and went on strike on September 12. Workers at Aerospace Machinists District 751 say the 33,000 union members aren’t getting enough.
Jason Redmond/AFP via Getty Images
Hide title
Change the title
Jason Redmond/AFP via Getty Images
Union members overwhelmingly rejected the company’s first contract offer five weeks ago.
Boeing later proposed a second contract, which it offered as its “best and final offer.” But the company angered union members by releasing the offer directly to the media without negotiating privately. The union rejected the offer without a vote.
The union credits U.S. Labor Secretary Julie Sue with restarting stalled negotiations that ultimately led to the deal union members voted on Wednesday.
That deal also includes a 35% pay raise — a significant increase from Boeing’s initial offer of 25%, though still short of the 40% increase the union initially wanted. The company also pledged to increase its contributions to employee 401k retirement funds.
There was one key union demand where Boeing refused to budge: the pension plan. Union members have been very clear that they want to reinstate the defined benefit plan that was lost a decade ago.
The last time Boeing machinists went on strike in 2008, the work stoppage lasted eight weeks and cost the company $2 billion. This time the economic damage could be even greater.
KUOW’s Casey Martin reported from Seattle, and Joel Ross reported from Washington, DC.
