Is This the Deal to End Boeing's Seven-Week Strike?

More than 30,000 Boeing workers are set to vote again on Monday regarding the termination of a challenging seven-week strike. The outcome of this vote will be crucial not just for the workers, but also for Boeing as a company, the global travel industry, and the overall economy.

The deal being proposed is similar to an offer that was previously rejected by nearly two-thirds of the union members just over a week ago.

The International Association of Machinists has led this strike, which has reportedly cost about $11.5 billion so far, making it the most expensive American strike of the 21st century. Although union leadership is encouraging members to approve the latest offer, the outcome remains uncertain.

The strike isn't only impacting Boeing, which has already incurred substantial losses. Airlines have been affected too, as they are not receiving promised deliveries of new, fuel-efficient aircraft. Additionally, Boeing's extensive supplier network, which spans all 50 states, is also feeling the impact.

Currently, Boeing plays a significant role in the U.S. economy. According to the Labor Department, around 44,000 jobs were impacted in October, including not only the 33,000 strikers but also workers at Boeing and its suppliers who have been temporarily laid off due to the halt in commercial aircraft manufacturing.

Details of the Proposed Deal

The latest offer includes an immediate pay raise of 13% for the workers, along with 9% raises in each of the next two years, and a final 7% increase by the end of the four-year contract. When all increases are combined, workers would see a total raise of more than 43% by the conclusion of 2028.

Boeing states that by the end of the contract, the average annual salary for union members would rise to $119,300, up from an average of $75,600 before the strike.

The proposal also contains increased contributions to the workers' 401(k) plans, and a $12,000 ratification bonus that can be taken as cash or added to their retirement accounts.

However, the offer does not reinstate the pension plans that the union lost ten years ago, which has led to frustration among the union members in previous votes. Furthermore, the current proposal represents only a modest improvement from the offer rejected on October 23.

Union leaders are urging members to accept this deal, asserting it locks in gains and represents a significant victory for them.

“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” the union stated. “We are at that point now and risk a regressive or lesser offer in the future.”

In the past, union members have rejected offers endorsed by union leaders only to accept similar deals afterward that offered little improvement. This pattern was seen in 2021 at John Deere and also at Boeing a decade ago, where members felt compelled to accept offers due to fears of losing their jobs.

Brandon Felton, an employee at Boeing, indicated that he plans to vote against the offer, believing the improvements in the new proposal are insufficient. He expressed, “It’s still not good enough,” emphasizing concerns regarding inflation and low morale among employees.

Challenges Surrounding Pension Plans

The absence of traditional pension plans, which provide retirees a guaranteed monthly income, remains a critical point of contention. Currently, workers have 401(k) plans where Boeing matches employee contributions.

This anger regarding the lost pension scheme contributes significantly to the prevailing discontent. Jon Holden, president of the largest IAM local at Boeing, has stated that many members have not moved past the disappointment of losing their pensions. He mentioned that the ongoing grievance regarding the pension is a major factor in the vote.

Boeing has maintained that reintroducing traditional pension plans is not an option, citing prohibitive costs in light of industry trends.

Furthermore, the union has attempted to negotiate better retirement security for its members while facing the challenge of being the first American union to restore a lost pension.

Potential Impact of the Strike

Ending this strike holds significant importance for the workers who have been away from their jobs for nearly two months with limited financial support. It is equally vital for Boeing, which continues to face financial losses and increased debt while being unable to produce most commercial planes that generate a large portion of its revenue.

According to estimates, the strike has resulted in economic losses amounting to around $11.6 billion. Boeing has been grappling with severe financial struggles for over five years, primarily following incidents involving the 737 Max aircraft, which led to significant operational challenges and reported losses totaling nearly $40 billion.

Boeing workers have faced substantial income losses during the strike, while the company itself has lost over $6.5 billion, according to estimates. Beyond Boeing, its tens of thousands of suppliers across the U.S. are experiencing disruptions as well.

Additionally, airlines face challenges due to halted deliveries of new jets from Boeing. While existing fleets continue to operate, delays in new aircraft deliveries add to existing concerns about production quality and safety.

For Boeing’s new CEO, Kelly Ortberg, ending the strike is crucial as he steps into his leadership role. He aims to improve the relationship between the company and the union. Holden acknowledged that the current struggles are linked to historical issues but emphasized the importance of resolution for both Boeing and its employees.

Boeing, strike, economy, union, workers