Boeing has to stop breaking the law, has to bargain in good faith, and we will be back at the table whenever we can get there to drive forward on the issues that our members say are important,” Jon Holden, president of IAM District 751, told a room of machinists at the Seattle union hall. He was met with loud cheers and a chant of “strike, strike, strike,” from the workers, many of whom carried signs related to the stoppage. The walkout is a stinging rebuke for Boeing and could represent the most disrupting challenge yet for a company that has spent much of this year in damage control as it careened from crisis to crisis. The strike risks derailing the aerospace giant’s recovery from ongoing financial and safety challenges and could cost the cash-strapped company an estimated $1 billion per week, according to analysts. The union plays a key role in assembling some of the company’s best-selling aircraft. The most direct impact is on Boeing’s assembly plants in Washington, especially in Everett and Renton. An extended work stoppage could also impact Boeing suppliers and possibly shrink its share of the aerospace market.
Worker Sentiments and Company Response
Machinists in Seattle said the strike was long coming. “We just want to be treated right and they’re not doing it,” said mechanic Charles Fromong, who has worked for Boeing for more than 37 years. “So I guess we’re going to get it done.” Boeing said early Friday that it would return to the bargaining table. “The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” the company said in a statement. “We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.”
After a string of tense, marathon negotiating sessions over the last several weeks, the IAM and Boeing announced Sunday that they had reached a tentative four-year agreement, including a 25 percent pay increase over four years and enhanced health and retirement benefits. Also significant: If workers had voted to accept the deal before the current contract, Boeing committed to building its next new aircraft in Washington state, a key union demand. Both sides and investors had cheered the deal. The optimism, however, proved short-lived. On Monday, Holden told the Seattle Times that members would probably reject the deal. Opposition grew as workers staged rallies and took to social media to vent their frustrations with the company’s offer. A copy of a flier obtained by The Washington Post urged members to “VOTE TO REJECT BOEING’S BAD DEAL,” circulated at many of the company’s plants. Machinists also were angered by the elimination of their annual bonus program.
Boeing workers picketing outside the company’s plants in Washington state.
Broader Implications and Historical Context
“We’ve got a lot of leverage — why waste that?” said Joe Philbin, a structures mechanic, outside the voting hall in Renton on Thursday. He’s worked for the company for six months and wants to see the mandatory overtime rules change. Several union members, who were being shuttled in from the nearby Renton plant on buses, said they were voting to reject the deal because they wanted to see higher pay increases. “Four years is not enough to make up for the last 16,” Boeing worker Roger Ligrano said before he voted. He said he was voting to strike, in part, to give union members more time to understand a deal. Harold Ruffalo, who has worked for Boeing for 28 years, said after the vote results were announced that too much corporate greed is impacting the company, and workers need more money to live as inflation hits paychecks. “They need to take care of us,” he said. The Biden administration was monitoring the situation; acting Labor Secretary Julie Su has been in contact with both sides.
Boeing executives spent much of the week trying to salvage the deal, urging IAM members to put the past grievances behind them. “I hope you will choose the bright future ahead,” Boeing CEO Kelly Ortberg said in a message to employees on Wednesday. “Working together, I know that we can get back on track,” he continued. “But a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.” But workers rejected his plea for solidarity. “I want the company to be fair with us,” said T E Sue, who has worked at Boeing for more than 35 years and said it was the “worst contract” during his time. “We’re the bread and butter of the company.”
Historical Context and Future Outlook
Leading up to the strike deadline, analysts said they were worried about how long a strike would last. They said that many workers have not forgotten previous rounds of negotiations in which Boeing pushed for concessions — including the end of the traditional pension program — to keep aircraft production in Washington state. Michael Bruno, Aviation Week Network’s executive editor for business, said in previous rounds of negotiations Boeing threatened to move airplane production to other states to extract concessions from the union, which soured relations. The last time IAM members struck was in 2008, a 57-day day walkout that Moody’s estimated cost Boeing about $1.5 billion a month. Boeing reopened negotiations on that contract twice, in 2011 and in 2013, and won significant concessions from workers.
Boeing has struggled to recover from major safety, financial and legal setbacks that began in January when a door panel of a 737 Max jet blew out of the fuselage in midair, leaving a gaping hole. Multiple investigations into the calamity uncovered serious shortcomings in the company’s manufacturing and safety oversight systems and led the Federal Aviation Administration to limit the number of 737 Max jets Boeing could build until it meets certain quality and safety milestones. In May, the Justice Department announced that Boeing had failed to meet the conditions of an agreement that shielded Boeing from criminal prosecution in connection with a 2018 crash of a Boeing Max jet in Indonesia and a second one in 2019 in Ethiopia that killed 346 people. Boeing agreed to plead guilty to one count of criminal fraud in connection with the case — a settlement that must still be approved by a federal judge. The company also has experienced major setbacks with its Starliner space program, which has been plagued by delays and cost overruns. The space capsule returned to Earth earlier this month, but without two astronauts it had carried to the International Space Station after NASA decided it was too risky to use the Boeing craft. Ortberg, the former chief executive of Rockwell Collins, took over the top job last month, pledging a new beginning.
Boeing's assembly line in Washington state.
Remember these 3 key ideas for your startup:
Employee Relations Matter: The Boeing strike highlights the importance of maintaining good relationships with employees. Fair treatment and open communication can prevent costly disruptions. For startups, fostering a positive work environment can lead to higher productivity and loyalty. For more insights, read about how to brand yourself as a remote company.
Adaptability is Crucial: Boeing’s ongoing challenges underscore the need for adaptability. Startups must be agile and ready to pivot in response to market demands and internal issues. This flexibility can be a significant competitive advantage. Learn more about task automation and why you should use it.
Financial Health is Key: The financial strain Boeing faces due to the strike and other setbacks is a reminder that financial health is crucial. Startups should prioritize financial planning and risk management to navigate through tough times. For more tips, check out resource allocation strategies.
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