Possible Strike Threatens Boeing

Workers at Boeing’s West Coast factories in the United States began voting on Thursday on a new highly criticized contract and a potential strike, adding pressure to the aircraft manufacturer as it grapples with chronic production delays and mounting debt.

Concerns of a strike could arise on Friday, representing a significant blow to new CEO Kelly Ortberg, who was hired last month to restore confidence in the aircraft manufacturer after an incident in January where a panel from a nearly new 737 MAX aircraft door exploded mid-air.

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Vote on Collective Agreement

Approximately 30,000 workers producing Boeing’s 737 MAX, 767, and 777 aircraft in the Seattle and Portland areas are voting on their first collective contract in 16 years.

Voting will close at 6 p.m. (Pacific Time or 10 p.m. in Chile) and the results will be announced tonight, as reported by the International Association of Machinists and Aerospace Workers (IAM). If a strike is approved, it could begin at midnight.

The proposed agreement includes a general wage increase of 25%, a $3,000 signing bonus, and a commitment to build Boeing’s next commercial aircraft in the Seattle area, provided the program is launched within four years of the contract.

While IAM leaders recommended their members accept the deal last Sunday, workers reacted angrily to the terms, with many advocating for the originally demanded 40% wage increase and expressing regret over the loss of an annual bonus.

Following a meeting to discuss the contract at the IAM office in Seattle on Wednesday, six Boeing employees told Reuters that they would vote in favor of the strike and were confident that the majority of union members would do the same.

“I am willing to strike for as long as necessary to get everything we deserve,” said 36-year-old quality inspector Josh King. “Normally, a strike doesn’t bring a worse offer, it always brings a better one.”

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Preparation for Potential Strike

Indicating that some workers were already preparing for picketing, a union member left the meeting on Wednesday with a sign under his arm that read, “Striking against Boeing.”

Workers have been protesting all week at Boeing’s factories in the Seattle area that assemble Boeing’s MAX, 777, and 767 aircraft. On Thursday, workers waiting to vote formed a line snaking along the street outside the union offices in Renton, the suburb of Seattle where Boeing manufactures its top-selling aircraft, the 737.

One member wearing a high-visibility vest shouted, “It’s time to strike!” as he exited the building after casting his vote. Reuters spoke to four workers who said they had voted in favor of the strike but refused to give their names or provide further comments.

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Company Actions

Boeing’s stocks rose by 0.6% in morning trading.

Boeing’s shares have fallen by 36% this year due to concerns about safety, production, and a $60 billion debt. A strike would exacerbate the financial issue and increase delays in delivering aircraft to airlines already grappling with capacity shortages.

According to TD Cowen, a 50-day strike could cost Boeing between $3,000 and $3,500 million. The last strike by Boeing workers in 2008 shuttered plants for 52 days and impacted earnings by about $100 million per day.

S&P Global Ratings stated on Thursday that an extended strike by workers could delay Boeing’s recovery and harm its overall rating. Both S&P and Moody’s rate Boeing one level above junk status.

Ortberg sent a letter to workers on Wednesday, urging them to sign the agreement for the sake of the company.

“A strike would jeopardize our shared recovery, further eroding customer confidence and impeding our ability to shape our future together,” the letter read.

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