The Boeing CEO gave an ultimatum

Kelly Ortberg, the recently appointed CEO of Boeing, personally delivered a tough message this week during the negotiations with the Machinists: Should striking union members reject the company’s most recent offer on Monday, the next contract proposal will be less generous, with potentially dire future repercussions.

“We can’t just keep giving more,” Machinists union leader Jon Holden stated in an interview on Friday, echoing Ortberg’s stance. “There will be a regressive offer next.”. “.”.

Boeing did not say what would be lost if Thursday’s offer failed, but Holden said it could mean giving up a number of benefits, such as a pledge to build the next aircraft in the Puget Sound area, abandoning a 38 percent pay raise, or forfeiting a 1 percent health care cost reduction.

“Anything’s on the table,” stated Holden, the president of Machinists Union District 731. They’re considering other options. “.”.

September saw the Machinists go on strike. 13. As the aircraft manufacturer’s cash reserves drain, Boeing idles its assembly facilities in Renton and Everett. In order to obtain more concessions from Boeing on compensation and retirement benefits, union members turned down two previous offers.

Holden and his negotiating team found that Ortberg’s direct message persuaded them that “we’ve got the most we can get.”. “.”.

The strike would end after 54 days if the 33,000 union members accept the offer, as they have recommended in Monday’s vote.

With an extra 3% general wage increase to reach that 38% raise over four years, Boeing’s proposal is a slight improvement over its previous offer.

Holden declared, “These are wages that can change your life.”.

He went on to say, “This pay increase is unprecedented in our history.”. When the general wage increases from 2002 to 2024 are added together, they total 31.5 percent. “.”.

Holden stated, “Our bargaining committee feels that it’s time to lock in this win.”. We are convinced that this is a win. “”.

The rank-and-file’s first response.

Holden’s warning was being followed by some employees on Friday.

In preparation for his interview with The Seattle Times, Holden had just concluded a Zoom call in which over 500 participants asked him pointed questions concerning the new offer and his advice to accept it. He had warned them of the possibility of losing their prior gains.

He stated that the replies from the callers “led me to believe … they’re looking to accept it.”. “”.

Undoubtedly, some machinists are still resistant to change.

Thirteen-year Everett employee Rob Davis declared that he would still not vote and called the union leadership “a finger puppet of Boeing.”. “”.

On Friday, Everett equipment operator Andrew DeFreese stated that he would also not be voting. More paid time off and faster advancement up the pay scale are what he wants to demand.

Some, however, are suffering greatly from the loss of income.

Because of the delicate nature of the vote, one employee, who wished to remain anonymous, told The Seattle Times that although he firmly rejected the offer in the last vote, he is now reconsidering.

The employee remarked, “I’m leaning more toward just accepting at this point, out of fear of many things.”.

His family is beginning to feel the financial strain, and he fears that he won’t be able to stay unemployed for very long.

Although he had hoped for more progress on the company’s wage offer, he is concerned that the union may lose more than it has gained if the offer is rejected.

He stated, “I believe the business is better positioned to wait us out.”.

Renton-based aircraft testing technician Carlos Del Villar stated that there is a “difference of opinion between those who want this to end and hopefully recover from these losses sooner than later, and the workers that will keep holding the line until a pension is reinstated.”. “”.

After starting at Boeing with a $20 hourly wage and working there for two and a half years, Del Villar claimed he was only able to save a small sum of money prior to the strike starting. He has accepted a temporary position with a staffing company in order to support himself.

He claimed that the current contract offer’s 38 percent wage increase is sufficiently near to the union’s initial 40 percent demand to win his support.

Many machinists, particularly those with more experience, have saved and prepared for a strike, according to Holden.

According to him, “many of our members can go much longer.”. Some people may not be able to. “”.

The union could keep the strike going, but “you risk the company going regressive.”. You put others at risk of experiencing severe hardship. “”.

Since the strike is so delicate, another Machinist, who wished to remain anonymous, stated on Friday that he is prepared to return to work and doesn’t want to take a second job to make ends meet.

If the strike goes on, he’s also concerned about the prospect of layoffs. He stated that regardless of the vote’s outcome, he has made the decision to report to work the following week.

Boeing employs a tough game.

Only in September did Ortberg personally add to the initial offer his pledge that Boeing would build its next new aircraft in the Puget Sound region, marking his only prior direct involvement in the Machinist contract negotiations.

Earlier, Boeing had abandoned the mediation effort led by acting Labor Secretary Julie Su, and he threatened that if Monday’s vote was rejected, the negotiations could regress.

Holden said the union pushed for improvements on the previous offer, which was turned down in October, when those negotiations took place in Seattle on Tuesday. 23 while the business requested a full vote on the same offer.

“That was not what we were going to do,” Holden stated.

At that time, mediators were moving between the rooms containing the union and company representatives. According to Holden, the management team left the building after becoming irate over the union’s proposals.

Holden claimed that he begged Su to keep the negotiations going. Boeing went back to mediation after she directly begged Ortberg for the additional 3% pay raise, but with a threat if it was turned down.

Holden claimed that the company was adamant about reintroducing the traditional pension that it had made the Machinists give up a decade prior.

The U.S. and the mediators. S. . The Labor Department introduced substitute retirement plans that offer a defined benefit without encumbering the business with unidentified, unfunded liabilities.

As Holden put it, “There was no traction.”. We simply failed to arrive. “”.

This gave the union a difficult decision.

Holden first disclosed to The Times why he had suggested the company’s initial offer of a 25 percent pay raise spread over four years, which sparked the strike with a 95 percent vote against it in September. 12—was due to Boeing’s conditional offer on his recommendation.

He stated, “Unless I recommended it, they weren’t going to give it.”.

This was once more a requirement of the revised offer on Thursday. However, Holden stated that he had a deeper reason for his choice this time.

According to him, it was the realization that “this is the inflection point … in the strike, where we could continue to stay out, but I can’t guarantee that we wouldn’t go backward.”. “”.

Holden shook hands with Ortberg and consented to suggest acceptance despite the impending danger.

Holden remarked, “I think we’ve done everything we can.”. We made our members a fantastic offer, and they are now holding it. “.”.

financial hardship.

The company did gain more time from the recent sale of its shares, Boeing. In order to strengthen its balance sheet and prevent a possible credit rating downgrade, it raised $21.1 billion last week by selling more company shares.

However, while they continue to stand on the picket line, workers are burning through their own savings. According to a calculation made by Jefferies analysts on Friday, workers’ average “financial pain” is $10,400 in lost wages.

That is getting close to the $12,000 ratification bonus that is being offered and, for some employees, the $9,900 in pay increases that they would receive during the first year of the contract.

Analysts wrote on Friday that Boeing is “probably in a stronger negotiating position” as a result of the significant capital infusion. “”.

The new offer from the company did not raise the company’s contribution to the 401(k) retirement plan from the previous offer, nor did it restore the defined benefit pension.

Instead, it combined the $7,000 ratification bonus and one-time $5,000 401(k) contribution from the prior offer, giving employees the option to divide the $12,000 payment between their retirement plan, paycheck, or both.

Machinists can start working again as early as Wednesday if the contract offer is accepted. They would have until November to get back to the factory. 12.

Holden remarked, “We make a recommendation, but we give our members the power.”.

“I’m hoping they can take this as a win and go on,” he continued. See you on Monday. “.”.