Boeing workers from International Machinists and Aerospace Workers District 751 participate in a rally at union hall during the ongoing strike on October 15, 2024 in Seattle, Washington, USA.
david rider reuter
boeing Machinists have voted against a new collective bargaining agreement that includes a 35% wage increase over four years, the union announced Wednesday, extending a strike for more than five weeks and halting the company’s aircraft production mainly in the Seattle area. Most of them have stopped.
The deal was rejected by 64% of voters, another major setback for the company. The company warned early Wednesday that it would continue to burn cash through 2025 and reported a quarterly loss of $6 billion, its biggest since 2020. A contract to give.
The strike is costing the company about $1 billion a month in losses, according to S&P Global Ratings, putting Boeing’s investment-grade rating at risk and potentially raising borrowing costs as it seeks to raise capital. There is.
New CEO Kelly Ortberg said reaching an agreement with the mechanics is a top priority to get the company back on track after years of safety and quality issues.
Asked about the strike earlier in the day on CNBC’s “Squawk on the Street,” Ortberg said, “My focus is on getting everyone moving forward and getting back to work and improving relationships. That’s true.”
Ortberg laid out a vision for Boeing’s future that includes slimming down the company to focus on its core business. Earlier this month, he announced that Boeing would cut 10% of its 170,000 global workforce.
The Biden administration has been involved during the outage, with Acting Labor Secretary Julie Su meeting with Boeing and unions before the latest proposal last week.
“Both sides need to decide the best way forward,” a Labor Department spokesperson said Thursday. “Acting Director Su has been in contact with the union and the company and stands ready to assist them.”
Boeing workers from International Machinists and Aerospace Workers District 751 arrive at union hall to vote on a new contract proposal during an ongoing strike in Renton, Washington, USA, October 23, 2024. conduct.
david rider reuter
More than 32,000 Boeing machinists in Oregon’s Puget Sound region and elsewhere will retire on September 13 after overwhelmingly rejecting an earlier tentative agreement that proposed a 25% pay increase. did. The International Association of Machinists and Aerospace Workers initially called for a 40% wage increase. This is the first strike by machinists since 2008.
The strike has further delayed deliveries to many Boeing customers, which are already dealing with production delays not only at Boeing but also at rival Airbus.
“I look forward to the day when they are no longer just a distraction.” american airlines CEO Robert Isom said Thursday on CNBC’s “Squawk Box.” “We’ve been wrestling with them for the past five years.”
Mr. Ortberg met with Mr. Isom and other major airline CEOs early in his term, which began in August.
“We need quality aircraft delivered on time,” Isom said, adding that American Airlines expects to meet its capacity plans for next year. “If Boeing says they’re going to do that, I’m going to welcome that call.”
Boeing’s latest proposal, announced last Saturday, includes a 35% pay raise over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.
Workers were demanding higher wages as the cost of living soars in the Puget Sound region. Some machinists were angry about losing their pension plans in a previous contract they signed in 2014, but the latest proposal would not provide for them.
Ben Tsokanos, director of aerospace at S&P Global Ratings, said in a statement that the company was unlikely to agree to the pension, saying “this refusal increases the risk of a long strike if the obstacle lies in restoring the pension.” added. The cost.
Boeing has also agreed in a new contract to build its next generation of planes in the Pacific Northwest, which will become the region’s first choice after Boeing moves all 787 Dreamliner production to a non-union factory in South Carolina. This had become a bottleneck for unionized workers.
“We’ve accomplished a great deal with this agreement, but we haven’t accomplished nearly enough to meet the needs of our members,” IAM District 751 President John Holden said at a news conference Wednesday night. He said the union would push to return to the bargaining table.
Boeing declined to comment on the voting results.
The labor dispute is the latest in a long list of problems at Boeing. The labor dispute began earlier this year after a door plug erupted mid-air from a crowded Boeing 737 Max 9, the company’s best-selling airliner, reigniting regulatory scrutiny of the company.
The strike began as Boeing was working to expand production of the 737 and other aircraft.
The extended shutdown also challenges the company’s aerospace supply chain, which has been made vulnerable by the pandemic, as the company’s supplier network needs to quickly train new employees.
Spirit Aero SystemsThe company, which is in the process of being acquired by Boeing Co., announced last week that it would furlough about 700 workers, and that layoffs and other furloughs are possible if the Boeing machinists’ strike continues. said.
