Boeing is preparing to learn Thursday whether 33,000 aircraft assembly workers, most of them in the Seattle area, are going on strike and shutting down production of the company’s best-selling planes.
Members of the International Association of Machinists and Aerospace Workers plan to vote on whether to approve a contract offer that includes 25% pay raises over four years. If the factory workers reject the contract and two-thirds of them vote to strike, a work stoppage would begin Friday at 12:01 a.m. PDT.
A walkout would not cause flight cancellations or directly affect airline passengers, but it would be another blow to Boeing’s reputation and finances in a year marked by problems in its airplane, defense and space operations.
New CEO Kelly Ortberg made a last-ditch effort to avert a strike, telling machinists Wednesday that “no one wins” in a walkout.
“For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” he said. “Working together, I know that we can get back on track, 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.”
Although the bargaining committee that negotiated the contract recommended ratification, IAM District 751 President Jon Holden predicted earlier this week that workers would vote to strike. Many of them have posted complaints about the deal on social media.
Voting will take place at union halls in Washington state, Portland, Oregon, and a smattering of other locations, with results expected to be released Thursday night.
A strike would stop production of the 737 Max, the company’s best-selling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Everett and Renton, Washington, near Seattle. It likely would not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.
TD Cowen aerospace analyst Cai von Rumohr said it is realistic based on the history of strikes at Boeing to figure that a walkout would last into mid-November, when workers’ $150 weekly payments from the union’s strike fund might seem low going into the holidays.
A strike that long would cost Boeing up to $3.5 billion in cash flow because the company gets about 60% of the sale price when it delivers a plane to the buyer, von Rumohr said.
Union negotiators unanimously recommended that workers approve the tentative contract reached over the weekend.
Boeing promised to build its next new plane in the Puget Sound area. That plane — not expected until sometime in the 2030s — would replace the 737 Max. That was a key win for union leaders, who want to avoid a repeat of Boeing moving production of Dreamliners from Everett to South Carolina.
However, the deal fell short of the union’s initial demand for pay raises of 40% over three years. The union also wanted to restore traditional pensions that were axed a decade ago but settled for an increase in Boeing contributions to employee’s 401(k) retirement accounts.
Holden told members Monday the union got everything it could in bargaining and recommended approval of the deal “because we can’t guarantee we can achieve more in a strike.”
Many union members, however, are still bitter about previous concessions on pensions, health care and pay.
“They are upset. They have a lot of things they want. I think Boeing understands that and wants to satisfy a fair number of them,” aerospace analyst von Rumohr said. “The question is, are they going to do enough?”
Boeing has seen its reputation battered since two 737 Max airliners crashed in 2018 and 2019, killing 346 people. The safety of its products came under renewed scrutiny after a panel blew out of a Max during a flight in January.