Boeing Workers Overwhelmingly Reject Contract, Prepare to Strike

In a decisive move, over 30,000 Boeing workers are poised to strike beginning Friday, effectively halting production of most of the company's aircraft. This comes after a significant majority of employees rejected a new labor contract proposed by Boeing and the International Association of Machinists and Aerospace Workers (IAM).

A worker walks outside the Boeing Co. manufacturing facility in Renton, Washington, US, on Thursday, Sept. 12, 2024.

The workers, primarily from the Seattle area and Oregon, voted 94.6% against the tentative agreement, with an overwhelming 96% in favor of a strike—far surpassing the two-thirds majority required for a work stoppage.

IAM District 751 President Jon Holden announced the results in a press conference, describing the strike as an “unfair labor practice strike.” He accused Boeing of engaging in “discriminatory conduct, coercive questioning, unlawful surveillance, and unlawful promises of benefits,” demanding that the company engage in fair negotiations.

While Boeing has not yet responded to the strike vote, Stephanie Pope, CEO of Boeing’s commercial airplane unit, defended the tentative deal as the “best contract we’ve ever presented.” She noted that the proposal included a 25% wage increase and improvements to healthcare and retirement benefits, though the union had requested a 40% raise. Workers criticized the agreement for not sufficiently addressing the rising cost of living.

This development is a setback for Boeing’s new CEO, Kelly Ortberg, who has been in office for just five weeks. Ortberg had urged workers to accept the contract, warning that a strike could hinder the company’s efforts to recover from recent setbacks.

The proposed agreement also included a commitment to build Boeing’s next commercial jet in the Seattle area, aiming to regain favor with workers after relocating 787 Dreamliner production to a non-union factory in South Carolina. If ratified, it would have marked the first fully negotiated contract for Boeing machinists in 16 years. The last strike, in 2008, lasted nearly two months.

The financial impact of the strike could be substantial. Jefferies aerospace analyst Sheila Kahyaoglu estimates that a 30-day strike could cost Boeing $1.5 billion, potentially destabilizing suppliers and supply chains. In contrast, the tentative agreement was projected to impact the company’s finances by $900 million annually if approved.

Boeing, grappling with significant financial strain, has already depleted around $8 billion this year and faces mounting debt. The company has struggled with production delays and industry-wide issues, including supply chain disruptions and labor shortages. Recent federal scrutiny has intensified following a blowout of a nearly new Boeing 737 Max 9 earlier this year, adding further pressure to Boeing’s production lines.