Boeing machinists have voted against a proposed labor agreement that offered 35% wage increases over four years, according to a statement from their union on Wednesday. This decision extends the ongoing strike, which has lasted over five weeks and has significantly impacted the company’s aircraft production, primarily in the Seattle region.
The rejection of the contract by 64% of ballot participants marks a significant setback for Boeing, which warned that it will continue to experience cash flow challenges through 2025. The company also reported a quarterly loss of $6 billion, its most substantial since 2020.
The strike is estimated to cost Boeing approximately $1 billion per month, as indicated by S&P Global Ratings.
New CEO Kelly Ortberg has emphasized the importance of reaching an agreement with the machinists to stabilize the company following years of safety and quality issues. “My focus is getting everybody looking forward, getting them back to work, and improving that relationship,” Ortberg stated earlier on CNBC.
Ortberg has outlined plans for Boeing’s future, which may involve streamlining the company to concentrate on core operations. This follows his announcement that Boeing will reduce its workforce by 10%, affecting its total global employee count of 170,000.
The union’s more than 32,000 machinists in the Puget Sound region, as well as those in Oregon and other locations, initiated the strike on September 13 after voting down a prior agreement that suggested a 25% raise. The machinists initially sought a 40% wage increase. This strike marks their first since 2008.
The latest proposal, revealed on Saturday, included a 35% wage increase over four years, enhanced 401(k) contributions, a $7,000 bonus, and other concessions. Workers have been advocating for higher pay due to rising living costs in the Puget Sound area. Some machinists expressed frustration over the loss of their pension plan under a previous contract from 2014, and the current proposal also did not reinstate pension benefits.
In the new agreement, Boeing committed to constructing its next aircraft in the Pacific Northwest, addressing a concern for union members after the company relocated all of its 787 Dreamliner production to a non-union facility in South Carolina.
Jon Holden, president of IAM District 751, commented at a press conference, “We have made tremendous gains in this agreement. However, we have not achieved enough to meet our members’ demands,” indicating that the union aims to return to negotiations.
Boeing has chosen not to comment on the results of the voting.
This labor dispute adds to Boeing’s ongoing challenges, which began this year when a door plug malfunction occurred midair on a Boeing 737 Max 9, the company’s flagship aircraft, attracting renewed regulatory scrutiny.
The strike emerges as Boeing was attempting to increase production of the 737 and other models, creating additional strains on a fragile aerospace supply chain as the company navigates a post-pandemic recovery. Recently, Spirit AeroSystems announced it would temporarily furlough about 700 employees, and further layoffs or furloughs could occur if the machinists’ strike persists.