Fresh Boeing crisis as 30,000 workers prepare to strike after rejecting 25% pay rise
Boeing is facing a fresh crisis as 30,000 workers prepare to walk out after unanimously rejecting a 25 per cent pay rise.
Boeing is facing a fresh crisis as 30,000 workers prepare to walk out after unanimously rejecting a 25 per cent pay rise.
The strike at Boeings West Coast factory will halt production of the planemakers strongest-selling jet as it wrestles with chronic output delays and mounting debt.
It comes after a series of shocking incidents involving the companys planes which have caused widespread uncertainty among the general public.
In January, a Boeing 737 Max 9 craft operated by Alaska Airlines was forced to make an emergency landing after a door plug flew off midair and later that month a front nose wheel fell off a Delta Airlines Boeing 757 plane as it was taxiing on the runway.
The strike, which is the first since 2008, will start at midnight Pacific time and comes just weeks after new CEO Kelly Ortberg was brought on in August to restore faith in the planemaker.
An International Aerospace Machinists union member holds a sign encouraging a strike
A door plug area of an Alaska Airlines Boeing 737 Max 9 aircraft awaiting inspection is pictured with paneling removed
A worker holds a sign in support of a strike as Boeing factory workers wait in line to vote on their first full contract in 16 years
Roughly 30,000 workers who produce Boeings 737 MAX and other jets in the Seattle and Portland areas voted on their first full contract in 16 years.
International Association of Machinists and Aerospace Workers (IAM) members voted 96 per cent in favor of striking and 94.6 per cent to reject the agreement.
This is about respect, this is about addressing the past, and this is about fighting for our future, said Jon Holden, who headed the negotiations for IAM, Boeings largest union, before announcing the vote result.
We strike at midnight, he said, as members in the union hall cheered and chanted: Strike! Strike! Strike!
Boeing said late on Thursday the vote sent a clear message that the tentative deal it had reached with IAM leadership was not acceptable to members.
We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement, the planemaker said in a statement.
Boeing factory workers hold signs in support of a strike as they vote on their first full contract in 16 years
Boeing workers arrive to vote on whether to strike or not at the union building in Renton, Washington, on September 12
Boeing workers gather outside after submitting their votes on a proposed contract between Boeing and union leaders on September 12
The deal included a general wage increase of 25%, a $3,000 signing bonus and a pledge to build Boeings next commercial jet in the Seattle area, provided the program was launched within the four years of the contract.
Although IAM leadership recommended last Sunday that its members accept the contract, many workers had responded angrily, arguing for the originally demanded 40% pay rise and lamenting the loss of an annual bonus.
Were going to get back to the table as quickly as we can, Holden told reporters, without saying how long he thought the strike would last or when talks would resume. This is something that we take one day at a time, one week at a time.
Workers have been protesting all week in Boeing factories in the Seattle area that assemble Boeings MAX, 777 and 767 jets.
Boeing shares closed up 0.9% on Thursday before the vote results were announced but are down 36% this year on concerns over safety, production and a $60 billion debt burden.
Boeing workers listen to union leaders speak in Seattle, Washington, on July 17
Pictured: The door plug that fell from Alaska Airlines Flight 1282 on January 8 this year
A worker holds a sign in support of a strike as Boeing factory workers wait in line to vote on their first full contract in 16 years
The duration of the walkout is not clear. A long strike would weigh not only on Boeings financials, but on airlines that depend on the planemakers jets and suppliers who manufacture parts and components for its aircraft.
According to a pre-vote note from TD Cowen, a 50-day strike could cost Boeing an estimated $3 billion to $3.5 billion of cash flow.
The Boeing workers last strike in 2008 shuttered plants for 52 days and hit revenue by an estimated $100 million per day.
S&P Global Ratings said that an extended strike could delay the planemakers recovery and hurt its overall rating. Both S&P and Moodys rate Boeing one notch above junk status.
The White House did not immediately respond to a request for comment.
