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PATRICK T. FALLON/Getty Images
- Unionized Boeing employees voted on Monday to accept a new contract proposal, effectively ending a seven-week strike.
- The agreement includes a 38% salary increase over four years and provides workers with a bonus for approving the contract.
- A Bank of America analyst estimated that Boeing incurred losses of approximately $50 million daily due to the strike.
Boeing Workers Approve New Contract After Lengthy Strike
On Monday, union members at Boeing approved a labor contract that will raise their wages by 38% over the next four years, bringing an end to their seven-week-long strike.
The International Association of Machinists and Aerospace Workers Local 751 reported that 59% of its members voted in favor of the proposal after union leaders backed it earlier in the week.
In response to inquiries, IAM directed Business Insider to their official statement released on Monday evening. The joint statement from Jon Holden and Brandon Bryant, presidents of IAM districts 751 and W24 respectively, emphasized: “This contract lays down new foundations for future growth starting today.”
“We are prepared to assist Boeing in shifting its focus back towards producing top-quality and safest aircraft globally,” they added.
A Comprehensive Agreement with Significant Benefits
This successful negotiation also includes an additional $12,000 bonus for ratification. This victory follows two previous rejections by machinists since September 13 when more than 30,000 union workers initially opted for striking due to dissatisfaction with an initial offer that included only a 25% pay increase.
The second rejected offer came in late October; it proposed a pay rise of 35% along with a $7,000 bonus but still lacked the highly sought-after pension plan eliminated nearly ten years ago. This latest agreement marks Boeing’s fourth attempt at reaching consensus; notably, their second offer featuring a proposed salary increase of 30% was withdrawn after negotiations faltered.
A New Standard Set in Aerospace Employment
“This agreement establishes new benchmarks within the aerospace sector—signaling clearly that jobs in this field should provide middle-class livelihoods where employees can prosper,” stated Brian Bryant, IAM’s international president on Monday.
This resolution allows Boeing to resume production as airlines continue expressing concerns regarding delayed aircraft deliveries. Newly appointed CEO Kelly Ortberg can now fully execute his cultural transformation strategy as factory workers return from their hiatus.
“The past few months have posed challenges for all involved; however we are united as one team,” Ortberg communicated through an internal message seen by Business Insider on Monday. ”Progress will only be achieved through collaboration and open dialogue. We face significant tasks ahead if we wish to restore the excellence synonymous with Boeing’s legacy,” he concluded.
The Financial Impact of Strikes on Production
An estimate from Bank of America suggests that during this period of industrial action alone, Boeing lost around $50 million each day. The strike also resulted in announced layoffs affecting about ten percent of staff while further delaying progress on the much-anticipated 777X program alongside halting substantial portions of production operations based out Seattle facilities.
This situation has compounded existing issues faced by the beleaguered manufacturer which began earlier this year when safety concerns arose following incidents such as door plugs detaching from newly manufactured737 Max models leading into subsequent audits revealing quality control problems exacerbated by leadership changes amid whistleblower reports highlighting assembly line deficiencies.
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