Boeing strike appears increasingly likely, as union votes on contract

More than 33,000 union workers will start voting Thursday on measures that could bring Boeing airplane production to a halt with a massive strike at the embattled aerospace giant early Friday morning.

The work stoppage would begin if members, mostly in Washington, reject a deal reached by Boeing and union leadership this past weekend hailed by both parties for its historic gains for workers, including 25 percent pay raises over four years.

Despite the strong gains won in the contract, aggrieved rank-and-file union members, who build the company’s flagship planes, are eager to seize a rare opportunity to claw back lost ground over more than a decade of pay that has failed to keep up with the cost of living.

Jon Holden, president of International Association of Machinists and Aerospace Workers District 751, told the Seattle Times on Tuesday that he expected his members to vote down the deal and strike.

A strike could derail Boeing’s recovery from ongoing financial and safety challenges, costing the cash-strapped company an estimated $1 billion per week, according to analysts. An extended work stoppage would also jeopardize industry suppliers and further shrink Boeing’s aerospace market share as the company’s new chief executive seeks to rebuild its tattered reputation.

The tentative deal is widely considered unprecedented. In addition to the big pay hikes for members, they would see lower health-care costs and an increase in Boeing’s contribution to retirement plans. Significantly, it also includes a Boeing commitment to build any new aircraft in the Seattle-Portland region, if launched during the four-year contract.

But Boeing’s offer falls short of what the union had demanded in negotiations, most notably a 40 percent pay increase and the restoration of pension plans, which went away in favor of a 401(k).

The strike threat coincides with a period of increased militancy by unions eager to secure stronger contracts amid a tighter labor market that has afforded workers more leverage. Last fall, the United Auto Workers secured the pay gains of at least 25 percent over four years after a six-week strike against the Big 3 Detroit automakers, and last July the Teamsters won one of the strongest contracts in UPS history. Workers in the aerospace industry have also notched significant victories with mere strike threats: American Airlines pilots scored a 46 percent increase in total compensation over a four-year contract last year and Southwest Airlines flight attendants in April got a 33 percent raise over four years.

“What’s happening at Boeing is very consistent with the broader trend that we’re seeing of rising worker expectations,” said Barry Eidlin, a labor sociologist at McGill University.

Boeing’s union members began voting at 5 a.m. Pacific time, ahead of a midnight contract expiration. Workers could walk off the job if both more than 50 percent of those voting reject the deal and at least two-thirds reaffirm a previous strike vote.

Stephanie Pope, chief executive of Boeing’s commercial airplanes division, reacted to workers’ feedback Tuesday in an email to members, writing, “We put our best foot forward on the first offer to give you the reward and the respect you deserve.”

“Simply put, this is the best contract we’ve ever presented,” she continued, urging members to read the contract for themselves and stressing that a strike would “hurt all of us.”

Holden called the deal “the best contract we’ve negotiated in our history,” and urged members to approve it Sunday, later qualifying that the union had “secured all that we could in bargaining short of a strike.”

Last week, Holden told The Washington Post that his members feel the pain of working under the same contract for 16 years with stagnant wages, rising health-care costs and lost pension benefits - and that the decision to strike “remains in our members’ hands.”

“We know we have enormous leverage right now with the situation that Boeing is in,” Holden said. “We see those at the top making decisions for short-term gain and long-term destruction.

Since the parties reached the agreement on Sunday, hundreds of emboldened workers have aired their frustrations on social media forums, calling for a strike. Others marched in protest this week through one of the company’s largest facilities in Washington’s Puget Sound and circulated a flier that says, “VOTE TO REJECT BOEING’S BAD DEAL,” according to a copy obtained by The Washington Post.

Beyond wages and the restoration of retirement benefits, critics of the deal also point to its elimination of bonuses tied to productivity, quality and safety improvements that they say detracts from the wage gains. They also expressed concern that the guarantee to build the next plane in the Pacific Northwest does not extend beyond the four-year contract, as Boeing has not announced plans to launch a new aircraft.

One third-generation Boeing worker at the plant in Everett, Wash., who spoke on the condition of anonymity because he feared company retaliation for speaking to the media, said he planned to vote down the deal, calling it “absolute garbage,” as the wage gains fall short of membership’s demands amid high inflation in the region.

“We haven’t had an effective raise in years, since we also lost our pension,” he said. “Factoring in food, fuel and housing, it’s become untenable. If I had to buy my house again, I couldn’t afford it.”

The strike would extend to Boeing’s major production plants in Everett, Wash.; Renton, Wash.; and Portland, Ore.; as well as facilities in Moses Lake, Wash.; Victorville and the Edwards Air Force Base in California, and elsewhere.

The last contract agreement in 2008 followed a two-month strike that Wall Street analysts estimated cost the company more than $2 billion in profits. (The previous machinist’s strike against Boeing in 2005 lasted a month.)

Boeing reopened negotiations on that contract twice - in 2011 and again in 2013 - with the union agreeing to major concessions, including raising the amount employees pay for health care and ending the traditional pension program, in exchange for agreeing to keep airplane production in Washington state.

Widespread dissatisfaction since the pandemic amid a tighter labor market has resulted in rank-and-file members voting against robust deals negotiated by union leadership, said Eidlin, the McGill sociologist. In August, Alaska Airlines flight attendants rejected a deal with average raises of 32 percent over three years. Thousands of machinists at Spirit AeroSystems in Kansas, a supplier in the process of being acquired by Boeing, voted down a contract deal last year and went on a six-day strike securing bigger raises.

“Workers are rejecting deals or voting ‘no’ on them in large numbers, not because they think they’re bad, but because they’re not good enough,” Eidlin said. “That’s a big shift.”

Boeing is struggling financially as it attempts to regain its footing amid a string of crises in its commercial aircraft and space divisions. A midair blowout in January aboard an Alaska Airlines jet has raised questions about the company’s quality oversight and manufacturing systems, with multiple federal investigations open in connection with the incident. A federal hearing into the accident last month painted a picture of a chaotic factory environment where workers struggled to meet production targets because of supply chain shortages.

Aircraft deliveries are key to Boeing’s bottom line and a production slowdown has weighed heavily on the company’s finances. Boeing reported a second-quarter net loss of $1.4 billion, more than triple that of a year earlier.

Analysts say even a brief walkout will put the company further behind with a trickle-down hit to Boeing’s suppliers. George Ferguson, a senior airlines, aerospace and defense analyst with Bloomberg Intelligence, said Boeing can’t afford a very long strike.

“They need a strong second-half recovery, and they can’t afford to burn more cash,” he added.