Boeing is waiting to find out on Thursday if 33,000 workers who put together planes, mostly in the Seattle area, are going on strike, which would stop production of the company’s best-selling planes.
The International Association of Machinists and Aerospace Workers is going to vote on whether to accept a contract offer that includes four years of 25% pay raises. There would be no work on Friday at 12:01 a.m. PDT if two-thirds of the plant workers vote to strike and reject the contract.
There wouldn’t be any direct effects on airline passengers or flights if workers went on strike, but it would be another blow to Boeing’s image and finances in a year that has been full of problems in its defence, space, and aeroplane operations.
To try to stop a strike one last time, new CEO Kelly Ortberg told machinists on Wednesday that a walkout is bad for everyone.
“It’s no secret that Boeing is having a rough time right now,” he said. “This is partly because of mistakes we made in the past.” “I know we can get back on track if we work together, but a strike would put our recovery at risk, which would hurt our ability to decide our future together and hurt trust with our customers even more.”
The group that negotiated the contract said it should be approved, but IAM District 751 President Jon Holden said earlier this week that workers would vote to go on strike. A lot of them have written negative things about the deal on social media.
Voting will happen in a number of places, including union halls in Washington state, Portland, Oregon, and others. The results should be made public Thursday night.
The company’s best-selling aircraft, the 737 Max, as well as the 777 (or “triple-seven”) jet and the 767 cargo plane would not be able to be made if there was a strike in Everett and Renton, Washington, which are both near Seattle. It most likely wouldn’t have an effect on Boeing 787 Dreamliners, which are made in South Carolina by workers who aren’t in a union.
Based on the history of strikes at Boeing BA 0.79%, Cai von Rumohr, an aerospace analyst at TD Cowen, said it is likely that the walkout will last until around the middle of November. At that point, the $150 weekly payments from the union’s strike fund might not seem like much since the holidays are coming up.
As von Rumohr said, a strike that lasts 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 hands over a plane to a buyer.
The union negotiators all agreed that workers should agree to the tentative agreement that was reached over the weekend.
Boeing said it would build its next new plane near Puget Sound. The 737 Max would be replaced by that plane, which won’t come out until sometime in the 2030s. That was a big win for union leaders, who don’t want Boeing to move Dreamliner production from Everett to South Carolina again.
Pay raises of 40% over three years were what the union had asked for, but the deal fell short of that. The union also wanted to bring back standard pensions that were cut ten years ago, but Boeing agreed to put more money into workers’ 401(k) plans instead.
Holden told union members on Monday that the talks went well and that the deal should be approved “because we can’t guarantee we can get more in a strike.”
But a lot of union members are still angry about giving up benefits like pensions, health care, and pay in the past.
“They’re mad.” They want many things. Von Rumohr, an aerospace analyst, said, “I think Boeing gets that and wants to please a fair number of them.” “Will they do enough?”
Boeing’s image has taken a hit since two 737 Max planes crashed in 2018 and 2019, killing 346 people. After a panel blew out of a Max during a trip in January, the company had to answer for the safety of its products again.
