Boeing workers ratify 3-year contract, averting strike

Unionized Boeing workers at three St. Louis-area factories voted in favor of the company’s latest contract offer Wednesday, averting a strike that threatened to paralyze the company’s production of crucial military hardware.

A strike by roughly 2,500 members of the International Association of Machinists and Aerospace Workers District 837 would have commenced at midnight had the vote gone against the three-year deal.

The Machinists rejected the last contract offer on July 25, citing retirement benefits.

That proposal had included a 10% 401(k) match from the company, but workers said that paled in comparison with the pension plans it used to offer.

The new deal features the 10% match but also includes a $8,000 lump sum payment that can be deferred into an employee’s 401(k) plan, and a 14% general wage increase.

It also improves the company’s sick, parental, and funeral leave arrangements and eliminates a two-tiered wage system, according to a release published by the union.

“At the end of the day, that is what the impending strike was about. Congratulations to IAM District 837 members for standing strong in achieving an agreement that is more fair and just,” said Steve Galloway, a vice president at IAM .

A Boeing spokesman said the company is “pleased with the outcome of the vote and we look forward to our future here in the St. Louis area.”The union’s gains underscore the strengthened bargaining power employees have in an economy that is wracked by a broad-based labor shortage.

The number of weekly quits reached record highs last year, while the unemployment rate has remained low despite fears of a possible recession.

Another Labor Department jobs report out Friday should provide a more up-to-date look at the country’s job market.

Several high-profile contract renewals have turned contentious over the past two years as employees press for concessions.

A 19-day strike at a Frito-Lay factory in Kansas last year resulted in new requirements guaranteeing workers at least one day off per week.

John Deere workers spent a month on strike before agreeing to a contract that improved their wages, and a strike at Kellogg’s lasted 11 weeks before coming to an end in December.

At the same time, worker organizing campaigns have prevailed at some traditionally nonunion companies including Amazon, Apple and Starbucks.

Strikes in the defense industry are rare, even though significant portions of its factory workforce are unionized.

A walkout would be especially disruptive because many of these workers – who often fill highly technical engineering and tooling roles – have security clearances to protect sensitive information that might be of interest to U.S. adversaries.

The three-year Boeing deal averts a stalemate that could have severely disrupted the U.S. military’s production pipeline, had it resulted in a prolonged strike.

The factories covered by the new contract in St. Louis, St. Charles, and nearby Mascoutah, Ill. – are part of Boeing’s Arlington, Va.-based defense, space and security unit, whose work is considered “critical” to national security.

They produce military aircraft including the F-15 Eagle and F-18 Hornet fighter jets, the T-7 Red Hawk training jet and the MQ-25 refueling drone.

Those programs collectively generated about $3.5 billion in 2022 revenue for Boeing, according to an analysis by Jefferies investment bank, making up a sizable chunk of Boeing’s $25.7 billion-a-year defense business.

Boeing stock was up 1.9% by midafternoon, roughly in line with the broader stock market.