Boeing machinists have recently voted against a new labor deal that offered 35% wage increases over four years. This decision has extended a strike that has been ongoing for more than five weeks, halting most of the company’s aircraft production. The rejection of the contract by 64% of voters is seen as a setback for Boeing, which had warned of continued cash burn through 2025 and reported a $6 billion quarterly loss, its largest since 2020. The strike is costing the company about $1 billion a month, according to S&P Global Ratings.
New CEO Kelly Ortberg had emphasized the importance of reaching a deal with machinists to get the company back on track after years of safety and quality issues. Pushing for higher pay, workers had been seeking wage increases amid rising living costs in the Puget Sound area. The latest proposal, which included 35% raises over four years, increased 401(k) contributions, and a $7,000 bonus, was still not enough to meet the members’ demands, according to the International Association of Machinists and Aerospace Workers union.
The strike is the first for the machinists since 2008, and comes in the midst of a challenging time for Boeing, as they had experienced issues with their 737 aircraft earlier in the year. The extended strike also poses challenges for the aerospace supply chain, as Boeing’s suppliers may face layoffs or furloughs if the strike continues. Boeing has agreed to build its next aircraft in the Pacific Northwest in the new contract, despite moving all of its 787 Dreamliner production to a non-union factory in South Carolina.
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