Boeing Faces Possible Strike as Workers Vote on Contract Offer

Boeing is awaiting the outcome of a crucial vote by 33,000 aircraft assembly workers, primarily based in the Seattle area, to determine if they will strike and halt production of the company's top-selling planes.

The International Association of Machinists and Aerospace Workers are deciding whether to accept a contract proposal that includes a 25% pay raise over four years. A strike would commence if two-thirds of the workers vote against the contract, starting Friday at 12:01 a.m. PDT.

Impact on Production and Operations

A potential walkout would not directly affect flight operations or airline passengers but would deal a significant blow to Boeing's reputation and finances. The strike would halt production of the 737 Max, 777, and 767 models at factories in Everett and Renton, Washington. Production of the Boeing 787 Dreamliner in South Carolina, which involves nonunion workers, would remain unaffected.

CEO's Appeal and Union Response

Boeing’s new CEO, Kelly Ortberg, made a final plea to avoid a strike, emphasizing the negative impact it would have on the company's recovery and trust with customers. The average annual salary for machinists is currently $75,608, with a proposed increase to $106,350 by the end of the contract.

Historical Context and Financial Impact

Historical patterns suggest that a strike could last until mid-November, potentially costing Boeing up to $3.5 billion in cash flow. The company earns about 60% of the sale price upon delivering a plane, making a prolonged strike financially damaging.

Contract Details and Union Sentiment

Despite a recommendation from the bargaining committee to ratify the contract, many workers have expressed dissatisfaction, particularly regarding concessions on pensions and health care. The union’s initial demand was for a 40% pay raise over three years and the restoration of traditional pensions, but the final offer includes increased Boeing contributions to 401(k) plans instead.

Boeing’s Ongoing Challenges

The company’s reputation has suffered since two fatal 737 Max crashes in 2018 and 2019. Further scrutiny emerged in January when a panel issue occurred with a Max aircraft. The company’s commitment to building its next new plane in the Puget Sound area was a significant concession to the union, aiming to address past grievances and avoid moving production out of the state.