Boeing Workers Vote On New Contract To End Seven-Week Strike
Boeing factory workers on the US West Coast are voting on an improved contract offer this Monday, potentially ending a seven-week strike and resuming jet production at the embattled aerospace manufacturer.
The new proposal from Boeing includes a 38% wage increase over four years, an improvement from the 35% raise previously rejected by approximately two-thirds of the 33,000 machinists who voted 12 days ago.
This fourth offer from Boeing since the strike began on 13 September arrives at a crucial time for the company, which recently announced a $24 billion share issue to stabilise its finances following the production halt of its 737 MAX jet.
The International Association of Machinists and Aerospace Workers stated on Sunday that if the offer is accepted, workers could return to their shifts as early as Wednesday, with the latest return date of 12 November. However, it remains uncertain how swiftly Boeing can return to pre-strike production levels, with the delay potentially pushing the year-end target of 38 jets per month to 2025.
Although Boeing does not routinely disclose monthly MAX production numbers, CFO Brian West indicated that monthly output had risen from high single digits at the end of the first quarter to around 25 in June and July.
The proposed 38% wage increase is estimated to add approximately $1.1 billion to the workers’ cost base of about $2.5 billion over the four-year contract, according to an analyst note from Jefferies. Jon Holden, President of the union’s District 751, has endorsed the latest contract, warning that a rejection could lead to a less favourable offer from Boeing.
Boeing’s shares saw a 0.4% rise by midday, reaching $155.27, following a previous increase on Friday as investors speculated that the workers would accept the deal.
Voting will conclude at 7 p.m. US Pacific Time (0300 GMT), with results expected shortly thereafter. Factory workers interviewed by Reuters expressed mixed feelings about the new contract, with some eager to return to work and others holding out for additional benefits and the initially demanded 40% wage increase.
A positive vote would be a significant reprieve for Boeing CEO Kelly Ortberg, who took office in August with a commitment to improve relations with factory workers and initiate a “fundamental culture change” within the company. Boeing has faced ongoing crises since January when a door panel blew off a near-new 737 MAX plane midair, leading to the departure of Ortberg’s predecessor, Dave Calhoun. Resolving the strike, which has also stalled production of Boeing’s 767 and 777 widebody planes, would benefit aerospace suppliers dealing with worker furloughs, as well as airlines facing delays in aircraft deliveries.
Frances Ibiefo
Follow us on:
