Boeing workers vote to reject 35% wage hike and continue strike

SEATTLE - Boeing factory workers voted to reject a contract offer and continue a more than five-week strike on Oct 23, in a blow to

new chief executive Kelly Ortberg

’s plan to shore up the finances of the struggling planemaker.

The vote was 64 per cent in opposition to the deal, which offered a 35 per cent rise in wages over four years.

The rejection of Boeing’s offer reflects years of resentment from workers who felt cheated by the company in talks a decade ago, and it also deepens a financial crisis.

After the vote, union leaders said they were ready to immediately resume negotiations with Boeing on the first new contract since 2014 when the company used the threat of moving production of the new version of the 777 out of the region to push through a deal that ended traditional pensions.

The International Association of Machinists and Aerospace Workers has been seeking a 40 per cent pay rise and the return of the defined-benefit pension.

Boeing factory workers were also venting frustration after a decade when their wages have lagged inflation while the planemaker spent tens of billions of dollars on share buybacks and paid out record executive bonuses.

More than 30,000 machinists downed tools in Boeing’s West Coast factories on Sept 13, halting production of the best-selling 737 MAX and 767 and 777 wide-body programmes.

Time is running out for Boeing, historically the largest US exporter, and its biggest union to reach a deal before the US presidential election on Nov 5.

“After the first contract offer was rejected, the honeymoon was over on the labour reset. This further validates that,” said Mr Scott Hamilton, an aviation consultant.

“It’s bad news for everybody – Boeing, labour, suppliers, customers, even the national economy.”

Fuselage supplier Spirit AeroSystems has already announced a 21-day furlough for 700 workers and said if the strike continues beyond the end of November, financial pressures and a significant inventory buffer would lead to layoffs and more drastic furloughs.

Boeing has announced plans to cut 17,000 jobs and is closing in on a plan to raise up to US$15 billion (S$19.8 billion) from investors to help preserve its investment-grade credit rating, while some airline customers have had to trim flying schedules due to aircraft delivery delays.

During its quarterly earnings call on Oct 23, Boeing forecast it would burn cash through 2025 and Mr Ortberg warned there was no quick fix for the ailing planemaker. The spectre of a quality crisis from a

January midair panel blowout

hangs over Boeing.

The rejection from workers on Oct 23 was the second in a formal vote after the offer of a 25 per cent pay rise over four years was rejected in September, leading to the strike. REUTERS