Thousands of Boeing aircraft machinists have rejected a contract offer for the second time in less than two months, meaning a strike that has halted airplane production at the company’s factories around the Puget Sound region for nearly six weeks will go on.
When votes were tallied Wednesday night (Oct. 23), 64% of members of the International Association of Machinists and Aerospace Workers sided against the proposal. While the contract included wage increases that the union said were in line with what workers were looking for, it did not include pension benefits the machinists have sought to restore.
“We have made tremendous gains with this agreement in many of the areas our members said were important to them, however, we have not achieved enough to meet our members’ demands,” IAM District 751 President Jon Holden said just before announcing the vote result at a Seattle union hall. Union members who were there cheered at the outcome.
The International Association of Machinists and Aerospace Workers represents about 33,000 Boeing employees who are on strike in Washington, Oregon, and California. Workers last month voted down an offer negotiated by union leaders and the company before they walked off the job and onto picket lines on Sept. 13. The earlier contract proposal was rejected by 94.6% of voting members.
Machinists voted down the latest offer on the same day the company posted financial results showing a quarterly loss of $6.17 billion.
Boeing said it did not have any comment on the voting results. Earlier in the day, responding to the poor financial report, Boeing President and CEO Kelly Ortberg said the strike was “first and foremost on everybody’s mind today.”
“I remain committed to getting the team back and improving our relationship, so we don’t become so disconnected in the future,” he said.
‘They haven’t budged on that’
The package that the workers rejected included a 35% general wage increase spread over four years, with 12% of the boost in the first year. It also called for an incentive pay program to be reinstated, with a guaranteed minimum annual payout of 4%, and for workers to receive a one-time contract ratification bonus of $7,000.
Union officials said that with compounding wage increases over the life of the contract, the rise in pay was in line with the 40% hike workers were seeking.
The company also offered to match 100% of the first 8% of pay an employee puts toward their 401(k) retirement account, along with an automatic 4% company contribution. And the proposed contract included a one-time $5,000 contribution to workers’ 401(k) accounts.
But the machinists have pressed for restoration of a defined-benefit pension plan.
“Bring the pension back,” Jim Thul, an inspector at Boeing for 35 years, said Wednesday outside the Angel of the Winds Arena in Everett, where hundreds of machinists were casting votes on the contract.
“You got a lot of people that hired into Boeing and took pay cuts coming from different jobs just because it was one of the last companies that had a pension,” Thul said. “And when they took the pension away, they’re no longer getting those people that want a secure job and a pension.”
Boeing hasn’t shown any signs during negotiations that it is willing to bring back the pension program.
Holden acknowledged as much. “They haven’t budged on that throughout,” he said. “It still remains a hot issue, and we’ll have to work through that.”
“If they’re not willing to give it,” he said, “we’ve got to get something that replaces it, and we haven’t gone that far, right? And so it does come down to wages. It does come down to the 401(k) plan.” He also mentioned the possibility “other defined benefit options” could be explored.
Boeing is in a difficult position. Problems with flight control systems on its 737 Max airplanes led to crashes in 2018 and 2019 that killed 346 people, exposing gaps in the company’s safety culture and resulting in hundreds of millions of dollars in penalties. Then, in January, an Alaska Airlines 737-9 flight was forced to make an emergency landing after a door plug blew out of the plane.
The company has piled up debt – $57.7 billion as of Sept. 30 – and said earlier this month that it planned to cut about 17,000 employees company-wide as part of efforts to rein in costs. It also indicated in recent regulatory filings that it may seek to raise up to $25 billion with stock or debt.
S&P Global estimated in early October that the work stoppage is costing the company more than $1 billion per month, even after considering cost-saving measures taken in response.
Asked if he had concerns Boeing would look at manufacturing options outside the Northwest the longer the strike continued, Holden replied: “It’s a concern I always have, have had for a long time.”
“I do know that there isn’t production that matches what our members can do. The infrastructure that is here and developed over 100 years,” he added. “But I’m going to focus on trying to get the offer that our members deserve. That’s what I’m going to do.”
On the picket line
Around 9:30 p.m. Wednesday, a couple hours after Holden shared the vote result, about a dozen workers were on the picket line at a gate outside Boeing’s Renton factory, along Logan Avenue North. The company’s huge boxy buildings sat squat in the background, lit up.
When cars that passed honked in support, workers whooped back. Among them was Kenneth Orcine, a sealer who’s been with the company about two years.
Orcine said he was still feeling energized about the strike and had socked away money anticipating it would happen. As a relatively new employee who may work at the company another 20 or 25 years, he’s concerned about securing benefits for the long term.
“It’s actually good. Because we wanted more,” he said when asked for a reaction to the failed contract vote. “We want the pension, you know, we want 40% and they only gave us 35%.”
“That’s not it,” he said.
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Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: info@washingtonstatestandard.com. Follow Washington State Standard on Facebook and Twitter. Freelance journalist Ryan Berry contributed to this article, reporting from Everett. Lucia reported from Seattle and Renton.
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