After more than a month of crippling strikes that have affected Boeing Co.’s airplane manufacturing, the company and the union representing 33,000 striking workers have finally reached a new deal to end the work stoppage. The proposal, which was hammered out overnight in Seattle, includes a wage increase of 35% spread over four years, a guaranteed annual bonus of at least 4%, and an additional $7,000 bonus if workers approve the contract. The IAM District 751 announced the details of the agreement on its website, with a ratification vote set for Oct. 23.
The assistance of US Labor Secretary Julie Su played a crucial role in jump-starting the stalled talks between Boeing and the union. Su met multiple times with both parties, including new Boeing CEO Kelly Ortberg, to help facilitate the negotiations. Boeing expressed its anticipation for the employees to vote on the negotiated proposal.
The potential breakthrough comes at a crucial time for Ortberg, who joined Boeing in August with a mandate to revamp operations. The agreement could provide a much-needed boost as Ortberg is set to address analysts and investors for the first time on Oct. 23 when Boeing reports its third-quarter results.
Despite the tentative deal, there is no guarantee that all workers will approve it. In a previous vote, employees overwhelmingly rejected the first proposal backed by both sides. Boeing subsequently sweetened its offer twice, first with a 30% increase directly to workers, and now with the latest plan that is 10 percentage points above the initial offer.
As the strike enters its sixth week, pressure is mounting for Boeing, its suppliers, and striking workers. The work stoppage has forced Boeing to shut down assembly lines for its 737 Max, 767, and 777 aircraft. The planemaker is also moving forward with plans to cut 10% of its workforce as part of a broader realignment under Ortberg.
Boeing has taken steps to raise capital to support its operations and maintain its credit rating. The company has secured a $10 billion credit facility with banks and filed a shelf registration to raise up to $25 billion over the next three years.
The strike by IAM District 751 is the first major labor dispute at Boeing in 16 years. Workers are pushing for pay increases and better retirement benefits, driven by resentment over stagnant wages while senior executives received substantial rewards. The latest agreement addresses many of the workers’ frustrations with earlier proposals but does not reinstate Boeing’s defined-benefit pension plan, which could be a sticking point for some members.
Instead, Boeing plans to increase its contributions to workers’ retirement savings plans. The company will make a one-time contribution of $5,000 to eligible workers’ 401(k) plans and fully match their contributions of up to 8% of salaries.
With assistance from Allyson Versprille and Danny Lee, the agreement marks a significant milestone in ending the labor dispute that has impacted Boeing’s operations. This development is a positive step forward for both the company and its employees as they work towards a resolution.
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