Boeing Co. workers and supporters hold signs outside the Aerospace Machinists Union District 751 Hall before a vote on the union contract in Renton, Washington, U.S., Thursday, Sept. 12, 2024.
M. Scott Brauer | Bloomberg | Getty Images
More than 30,000 Boeing Workers were due to strike on Friday, halting production of most of the company's aircraft after staff overwhelmingly rejected a new labour contract.
It is a costly development for the manufacturer, which has struggled to ramp up production and restore its reputation following safety crises.
Workers in the Seattle and Oregon areas voted 94.6 percent against a tentative agreement that Boeing and the International Association of Machinists and Aerospace Workers announced Sunday. Ninety-six percent voted in favor of striking, far more than the two-thirds vote needed for a work stoppage.
“We will strike at midnight,” Jon Holden, president of IAM District 751, said at a news conference announcing the results of the vote. Holden called it an “unfair labor practices strike,” alleging that factory workers had suffered “discriminatory conduct, coercive interrogations, illegal surveillance and illegal promises of benefits.”
He said Boeing needs to negotiate in good faith.
Boeing did not immediately comment.
A worker walks outside a Boeing Co. manufacturing facility in Renton, Washington, U.S., Thursday, Sept. 12, 2024.
M. Scott Brauer | Bloomberg | Getty Images
The preliminary proposal included 25% wage increases and other improvements to health and retirement benefits, although the union had requested increases of around 40%. Workers had complained about the deal, saying it did not cover rising costs of living.
The vote is a blow to CEO Kelly Ortberg, who has been on the job for five weeks. A day before the vote, he had urged workers to accept the contract and not strike, saying that would jeopardize the company's recovery.
The ultimate financial impact of the strike will depend on its duration.
Sheila Kahyaoglu, an aerospace analyst at Jefferies, estimated that the cash impact of a strike within 30 days could represent a $1.5 billion hit for Boeing and said it “could destabilize suppliers and supply chains.” She predicted the tentative deal would have had an annual impact of $900 million if approved.
Boeing has burned through nearly $8 billion so far this year and is saddled with mounting debt. Production has fallen short of expectations as the company works to eliminate manufacturing glitches and grapples with other industry-wide problems, including supply and labor shortages.
An explosion of a nearly new Boeing 737 Max 9 earlier this year has brought additional federal scrutiny to Boeing's production lines.
