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Boeing Workers Walk Off the Job in First Strike Since 2008
Thousands of workers who build commercial planes in the Seattle and Portland, Ore., areas rejected a tentative contract recommended by union leaders.
transcript
Boeing Union Members Vote to Strike
Thousands of machinists and aerospace workers walked off the job on Friday, after rejecting a proposal that would have delivered raises and improvements to benefits but fell short of what the union initially sought.
“Strike! Strike! Strike! Strike!” “This is about respect. This is about addressing the past. And this is about fighting for our future. Our members rejected the contract by 94.6 percent. And they voted to strike by 96 percent. We will be back at the table whenever we can get there to drive forward on the issues that our members say are important. Congratulations, machinists.”
Thousands of Boeing workers walked off the job on Friday after rejecting a contract offer from the company, a potentially costly disruption as Boeing tries to increase airplane production after a safety crisis.
The strike, the first at Boeing in 16 years, is expected to bring operations to a halt in the Seattle area, home to most of Boeing’s commercial plane manufacturing. The slowdown could also further disrupt the company’s fragile supply chain.
Kelly Ortberg, the company’s new chief executive, had urged employees to approve the deal. “A strike would put our shared recovery in jeopardy, further eroding trust with our customers,” he said in an email to workers on Wednesday.
Boeing plays a substantial role in the U.S. economy. It employs almost 150,000 people across the country — nearly half of them in Washington State — and is one of the nation’s largest exporters. The company, which also makes military jets, rockets, spacecraft and Air Force One, is a global symbol of America’s manufacturing strength.
Boeing’s stock was down 2.5 percent Friday morning and has fallen nearly 40 percent this year.
The union said the strike vote passed by 96 percent, well above the two-thirds required to initiate a walkout, after 95 percent rejected the proposed contract.
The contract had been agreed upon by union leaders and company management on Sunday after months of talks. It included many gains for workers, but fell short of what the union initially sought. Union leaders had hoped to get bigger raises and other concessions from the company, but said it was still “the best contract we’ve negotiated in our history.”
In a statement on Friday after the vote, Boeing said it was “committed to resetting our relationship with our employees and the union.” The company said it was “ready” to continue negotiations on a new labor contract.
A vast majority of the 33,000 workers governed by the contract are represented by District 751 of the International Association of Machinists and Aerospace Workers. Members of that union, Boeing’s largest, mostly work on commercial airplanes in the Seattle area. The dispute also involves workers in the Portland, Ore., area who are represented by the union’s smaller District W24.
The union represents about a fifth of the company’s more than 170,000 employees worldwide.
“This is about respect. This is about addressing the past, and this is about fighting for our future,” said Jon Holden, the president of District 751.
Mr. Holden had said in a statement several days before the strike that union leaders had recommended approving the deal because “we can’t guarantee we can achieve more in a strike.” He added then that the union would “protect and support” whatever decision the members make.
Mr. Ortberg, who joined Boeing last month, has sought to reset the company’s relationship with its workers and met with employees in the Seattle area this week to hear their thoughts about the deal. Other pressing issues include improving quality and safety, restoring the company’s reputation, fixing its relationship with regulators and improving its financial position, which includes reducing its nearly $60 billion in debt.
The last Boeing strike, in 2008, lasted 50 days; the contract that ended the dispute has been extended twice. If the current strike lasts about as long, it will cost Boeing at least $3 billion, according to an estimate from Cai von Rumohr, a research analyst at the investment bank TD Cowen.
Boeing operates two large factories in the Seattle area: one in Renton, where it makes the 737 Max, and another in Everett, where it makes the 767 and 777.
The Max, by far Boeing’s most popular model, accounts for more than three-fourths of the 5,490 planes the company has on order. But output at the Renton factory is far behind where Boeing wants. The company has been forced to slow production to make quality improvements after a panel fell off a Max being used for an Alaska Airlines flight in January. Eventually, Boeing plans to expand Max production to Everett.
The rejection of the proposal on Thursday reflects resentment among workers over concessions made in past talks, including the loss of pension benefits a decade ago, which the union had sought to reinstate. Workers and the union were also angered by the company’s decision in 2009 to move final assembly of its 787 Dreamliner plane to a nonunion factory in South Carolina.
But many in the union were not around for those events: About half the members of District 751 have less than six years of experience at the company. Those workers generally earn less than their more experienced peers, which may make a strike financially difficult, even with the union’s offer to pay members $250 per week starting in the third week of the strike.
The proposed deal would have delivered raises of 25 percent over the life of the four-year contract; the unions started the talks by asking for raises of 40 percent. Some workers who started from a lower base wage would have received bigger raises; for about 7,500 workers, pay would have increased 45 percent, while another 5,000 workers would have received raises of 53 percent, according to Boeing.
The rejected deal also would have provided each union member with a $3,000 ratification bonus. Boeing had also agreed to increase annual payments to the union 401(k) plan by up to $4,160 per worker, cover more of the cost of health care, provide 12 weeks of paid parental leave and make improvements to work-life balance, including reductions in mandatory overtime. The company also agreed to commit to building its next commercial plane in the Pacific Northwest.
In rejecting the deal, workers may feel they have an upper hand as Boeing seeks to move past the crisis that began when the panel fell off a 737 Max. While no one was seriously injured in that incident, it reignited concerns about the quality and safety of Boeing’s planes five years after two fatal Max crashes led regulators worldwide to ground the plane for nearly two years.
After the January episode, the Federal Aviation Administration limited production of the Max. The company has since increased inspections, added training for new hires, started to simplify procedures and limited tasks performed out of sequence, a practice known as traveled work.
Boeing’s employees may also have been more willing to vote for a strike because they were emboldened by recent walkouts involving autoworkers, screenwriters and actors.
Because of an editing error, an earlier version of this article misstated the way Boeing’s chief executive, Kelly Ortberg, communicated with employees on Wednesday in urging them to approve a contract proposal. He did so in an email, not a video.
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Niraj Chokshi writes about aviation, rail and other transportation industries. More about Niraj Chokshi
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