Boeing machinists have voted against a proposed labor agreement that offered 35% wage increases over the next four years, according to their union on Wednesday. This decision prolongs a strike that has lasted over five weeks, significantly disrupting aircraft production, primarily concentrated in the Seattle region.
The rejection, with 64% of the vote, represents a serious blow to Boeing, which indicated earlier in the day that it would continue to face financial challenges through 2025 and reported a $6 billion quarterly loss, the largest since 2020. A simple majority was required for the contract to be accepted.
According to S&P Global Ratings, the ongoing strike is costing Boeing approximately $1 billion each month. This situation threatens the company’s investment-grade credit rating, potentially increasing borrowing costs as it attempts to secure funding.
New CEO Kelly Ortberg emphasized the importance of reaching an agreement with machinists to restore the company’s stability following a series of safety and quality issues. “My focus is getting everybody looking forward, getting them back to work, and improving that relationship,” Ortberg stated in an interview on CNBC earlier in the day.
Ortberg has expressed a vision for restructuring Boeing to concentrate on its core businesses, which includes a recent announcement to reduce its global workforce by 10%, bringing the total down from 170,000 employees.
The strike began on September 13, involving over 32,000 machinists from the Puget Sound area, Oregon, and other locations, after they decisively rejected a previous agreement that suggested a 25% raise. The International Association of Machinists and Aerospace Workers initially aimed for wage increases of 40%. This marks the first strike for machinists since 2008.