Boeing and the Machinists union, which represents 33,000 of its employees on the West Coast, have reached a tentative deal that could avoid a strike that had been set to start this Friday.
Before it will take effect, the deal would need the approval of the rank-and-file union members who build commercial jets.
But leadership of the union praised the tentative deal and said it achieved the union’s goals.
The deal represents Boeing’s biggest pay raise for union members.
The deal also includes increased job security for union members with a promise to build the next new airplane at one of the union-represented plants in the Puget Sound region.
The rank-and-file members will have the chance to vote Thursday on the tentative agreement and a no vote could possibly lead to a strike.
That has happened in some recent labor agreements at other companies, but the union leadership is recommending that members vote in favor of the agreement.
Years of problems at Boeing Boeing has had a series of setbacks over the last five years, starting with a 20-month grounding of its best-selling plane, the 737 Max, in 2019 and 2020, following two fatal crashes tied to a design flaw in the plane.
Union had upper hand in talks But Boeing’s problems meant it was in no position to deal with striking workers for the first time in 16 years.
Former CEO Dave Calhoun had told investors in July that Boeing’s intention was to avoid a strike and seemed to signal the company was willing to go to great lengths to avoid a work stoppage.
A tentative agreement reached by Boeing and the Machinists union, which represents 33,000 of the company’s workers on the West Coast, may prevent a strike that was scheduled to begin this Friday.
The agreement must be approved by the regular union members who construct commercial aircraft before it can go into force. However, union leadership applauded the tentative agreement and claimed that the union’s objectives were met.
The International Association of Machinists and Aerospace Workers said in a statement on its official website on Sunday, “You sent us here to stand strong for your priorities, and we are proud to have done so.”.
In addition to better 401(k) plan contributions, lower employee health insurance contributions, and more time off, Boeing said the agreement offers raises totaling 25 percent over the course of the four-year contract.
Boeing’s largest pay increase for union members is represented by this deal.
What matters to you for the new contract has been communicated to us. Stephanie Pope, CEO of Boeing’s commercial aircraft division, said in a statement, “And we have reached a tentative agreement with the union on a historic offer that takes care of you and your family.”.
Along with a pledge to construct the next generation of aircraft at one of the union-represented plants in the Puget Sound region, the agreement also gives union members more job security. Builds the 787 Dreamliner at its single nonunion facility in South Carolina. Under the terms of the last two contracts with Boeing, the union had to give in on things like increased employee health care contributions and the termination of the traditional pension plan in exchange for the company rescinding its threat to build the then-planned 737 Max and 777X aircraft at new, nonunion factory.
The agreement covers approximately 1,200 workers at a Boeing parts plant in Portland, Oregon, as well as production workers who assemble Boeing commercial jets at three facilities in the Seattle region. This Thursday is the tentative agreement’s vote day for the rank-and-file members; a strike could result from a no vote. Though the union leadership is advising members to vote in favor of the agreement, that has happened in some recent labor agreements at other companies.
years of issues with Boeing.
Over the past five years, Boeing has experienced a number of setbacks. The most notable of these was the 20-month grounding of its best-selling aircraft, the 737 Max, in 2019 and 2020 due to two fatal crashes linked to a design flaw in the aircraft.
Furthermore, as a result of a sharp decline in air travel, Boeing’s airline customers suffered significant losses during the pandemic, which further reduced the company’s revenue. Additionally, ten minutes into an Alaska Airlines 737 Max flight in January, a door plug blew off the aircraft. Though the incident did not result in any fatalities, it did draw attention to Boeing’s quality and safety issues, particularly after it was discovered that the plane in question had left the factory without the four bolts required to keep the door plug in place.
Because of its numerous issues, Boeing has reported core operating losses of $33.3 billion since the Max was grounded in 2019. It is predicted that losses will persist for the remainder of this year. Because it borrowed a lot more money to cover its losses during that period, Boeing faces the risk of having its debt downgraded to junk bond status.
The financial standing of some other significant businesses, like UPS, General Motors, Ford, and Stellantis, that struck profitable union agreements last year, stands in sharp contrast to this. Prior to those discussions, those companies had released earnings records.
Union was ahead in the negotiations.
However, due to its issues, Boeing was unable to handle a walkout by employees for the first time in sixteen years.
Boeing’s two union local presidents, Jon Holden and Brandon Bryant, sent a message to members on Sunday stating, “Financially, the company finds itself in a tough position due to many self-inflicted missteps.”. “In the end, we utilized every bit of power at our disposal to pursue everything you indicated was significant while we were in a strong position of leverage. Although we did not obtain our desired outcome, you should all feel proud of your resilience, cooperation, and cohesion as you have succeeded in securing the best agreement we have ever had. “.
Prior to the last round of negotiations, company executives had given up some of the union’s negotiating power. Former CEO Dave Calhoun appeared to indicate that Boeing was prepared to go to considerable measures in order to prevent a work stoppage when he told investors in July that the company’s goal was to prevent a strike.
“We anticipate significant wage demands,” Calhoun stated. “In this process, we’re not scared to treat our employees well. We’re just going to do everything in our power to prevent a strike. “.
Following a meeting with the union’s leadership, his replacement, Kelly Ortberg, took office on August 8 and immediately made a statement stating his desire to “reset” relations with the organization.
