Boeing’s largest union announces strike if collective bargaining fails

“We don’t want to strike – but we are ready and willing to do so to secure the best aerospace contract our members have ever seen,” Jon Holden, president of IAM District 751, said in a statement after the vote. “Without us, there would be no Boeing, and we have what it takes to get this company back to the level it once was.”

Negotiations began in March between Boeing and the 32,000-member union to replace the current collective agreement, which expires on September 12. A strike in September would require another vote by members.

Boeing has grappled with numerous investigations and controversies over safety and manufacturing integrity throughout the year. In January, the door panel on an Alaska Airlines 737 Max burst in midair, creating a gaping hole in the fuselage as the plane was forced to land. This month, Boeing agreed to plead guilty to conspiracy to defraud the government in connection with the crashes of 737 Max jets in Indonesia in 2018 and Ethiopia in 2019 that killed 346 people. The agreement with the Justice Department followed prosecutors’ determination that Boeing had failed to comply with the terms of a deal the company negotiated with the government in 2021 that would have shielded it from criminal prosecution.

Now labor issues are front and center. The union’s proposal calls for a wage increase of more than 40 percent and the reinstatement of the traditional pension program that was eliminated in 2014. While wages and benefits are important, after several years of Boeing threatening to move plane production elsewhere, Holden, president of IAM District 751, said one of the union’s top priorities is to ensure the company’s next new plane is built in Washington state.

Boeing has not announced plans for a new plane or said where it would build one, but Boeing’s threats to move production out of state in 2008, 2011 and 2014 enabled the company to win concessions from union members who wanted to keep production in Washington.

This time, however, Boeing’s negotiations come at a time when aviation unions have made significant gains.

Last summer, American Airlines pilots won a 46 percent pay raise, while Southwest Airlines flight attendants recently agreed to a deal that gives them a raise of more than 20 percent. And despite a six-day walkout at Spirit AeroSystems, a key supplier bought back by Boeing last month, IAM members ultimately won a 23.5 percent pay raise over the life of the contract, as well as other concessions, including the elimination of mandatory weekend overtime. IAM leadership and members have been following these negotiations closely.

“They have eyes and ears and can see what’s going on elsewhere,” says Stewart Glickman, deputy director of equity research at investment research firm CFRA.

Glickman sees two possible paths for Boeing: Either the company can pay more to avoid a strike, which would exacerbate the company’s liquidity crisis, or it can stand firm and risk a strike and further production disruptions.

Even a brief strike by machinists would affect Boeing’s ability to meet production targets, as they play a key role in assembling and inspecting the 737 Max and 777 planes. Wall Street analysts estimated that the company lost more than $2 billion in profits during the 2008 strike, which halted production for two months. Some suppliers were forced to lay off workers and slow production.

Richard Aboulafia, managing director of aerospace consulting firm AeroDynamic Advisory, said these negotiations could play an outsized role given Boeing’s numerous blunders.

“What is at stake is that Boeing could lose even more credibility in the eyes of customers, regulators, suppliers and the industry as a whole,” he said.

It has been 16 years since the two sides negotiated an entirely new contract. The last agreement in 2008 came after the two-month strike. Boeing resumed negotiations in 2011 and 2013. Both times, the company was able to win concessions, including an increase in workers’ health insurance contributions and the end of the traditional pension program, in exchange for agreeing to keep aircraft production in Washington state.

“We remain confident that we can reach an agreement that balances the needs of our employees and the business realities we face as a company,” Boeing said in a statement on Wednesday. Stephanie Pope, head of Boeing’s commercial aircraft, said the two sides had had “very constructive meetings” since March.

“We are united and committed to what we want the future of this company to look like,” Pope said in a video clip posted on the company’s website in April. “I’m very encouraged by the opportunity to make this happen.”

The union has held rallies and other actions to show the company that it is serious. Before the vote on the strike authorization on Wednesday Thousands of members crowded T-Mobile Park, home of the Seattle Mariners, for a raucous rally before the vote, with signs reading “WE DESERVE MORE IN 2024” and “MORE $$.”

“If you want to get an airplane to market as quickly as possible, you should take advantage of the infrastructure you have here,” Holden said. “This didn’t happen overnight. It took over 100 years to get to this point. The supply chain is here, the colleges, technical schools to train the next generation of workers and engineers. You can’t do this overnight, so they really need to come here.”