Boeing workers vote to strike and reject contract reached by own union leaders

Chicago - Boeing factory workers are poised to walk off the job, crippling manufacturing across the plane maker’s Seattle commercial jet hub after members of its largest union rejected a contract offer and voted to strike.

The walkout, from midnight on Sept 13, is the first since 2008 by the district of the International Association of Machinists And Aerospace Workers (IAM) representing 33,000 Boeing workers across the US West Coast. It adds to the strain on the plane maker, already reeling from the

fallout over quality lapses

after a near-catastrophe at the start of 2024 that spurred investigations, a customer revolt and an executive shake-up.

Members ignored a plea for peace by

new Boeing chief executive Kelly Ortberg

, who has vowed to reset labour relations. And they bucked the recommendation of their own union leaders that they accept terms that included a 25 per cent guaranteed wage increase over four years. While that is the largest such pay hike ever offered by the plane maker, workers had expected a far greater increase. They were also angered that the terms also eliminated an annual bonus.

Although IAM leadership recommended on Sept 8 that its members accept the contract, many workers had responded angrily, arguing for the originally demanded 40 per cent pay rise and lamenting the loss of an annual bonus.

Boeing has been in a financially difficult situation since a Jan 5 accident exposed deficiencies at its factories and forced the plane maker to reduce production. The company has been bleeding cash as a result, and its credit rating is hovering one step above speculative grade, putting the plane maker in a difficult position as it contends with a heavy debt load of US$45 billion (S$58.5 billion).

The defeat at the hand of workers means that Boeing and IAM District 751 will need to head back to the negotiating table to try and find terms that satisfy members of a union with a long history of activism.

A strike will halt production of Boeing’s 737 Max, its strongest-selling jet, as the plane maker wrestles with chronic output delays and mounting debt.

Mr Cai von Rumohr, an analyst at TD Cowen, estimates the walk-out could run for more than 50 days, in line with previous strikes, clipping between US$3 billion and US$3.5 billion from Boeing’s cash flow.

Boeing has said its offer was the best it could put forward given its strained finances. The company has not said how it would respond, but managers have been canvassing other workers this week to see if they have the skills to temporarily replace striking IAM members. BLOOMBERG, REUTERS