(Seattle) Talks between Boeing and the IAM machinists union are due to resume early next week, under the auspices of federal mediation, in an attempt to end the strike that began Friday and is blocking production at its home on the American northwest coast.
The work stoppage began after the massive rejection of the draft new collective agreement, negotiated since March by Boeing and the local branch of the IAM and which was to succeed the one dating from 2008 which expired Thursday at midnight.
The planemaker’s more than 33,000 union members in the Seattle area – out of some 170,000 employees – rejected the agreement announced on September 8 by 94.6% and approved a walkout by 96%. The last strike, in 2008, lasted 57 days.
Early in the evening, the Federal Mediation and Conciliation Service (FMCS) announced that the parties would “resume their meetings at the beginning of next week”.
He welcomed their willingness to work to find a “mutually acceptable solution” with “the ultimate goal of preventing economic disruption and creating a positive working relationship.”
The walkout has paralyzed the two major assembly plants in Renton and Everett, which produce the best-selling 737 MAX, the 777 and the 767 (cargo and military tanker versions), whose deliveries are already running into delays.
PHOTO DARRYL DYCK, THE CANADIAN PRESS
A 737 MAX aircraft
Production at other sites, including a parts plant in nearby Portland, Oregon, has also been halted, as has the remanufacturing of dozens of 787 Dreamliners that has been taking place in Everett for several months.
However, assembly of the Dreamliner is not disrupted at this stage, because the plant is located in South Carolina and is not affected by this collective agreement.
“Shaky”
“For a financially faltering Boeing, a strike is the last thing it needs,” according to aviation website Leeham News.
The aircraft manufacturer actually collects the largest portion of the payment (around 60%) when the planes are handed over. It can deliver those that have received the green light from the FAA regulator before the strike, but its production rate has been running at a slower pace since an in-flight incident in early January involving an Alaska Airlines 737 MAX 9.
A 50-day strike would cost Boeing $3 billion to $3.5 billion in cash and hit revenues by $5.5 billion, according to TD Cowen analysts.
“The strike will affect production, deliveries and operations, and it will threaten our recovery,” Boeing Chief Financial Officer Brian West said Friday morning at a conference hosted by a bank.
“The strike injects so much uncertainty” that he refused to make any forecast for 2024 and 2025, assuring that the immediate priority was to “preserve our liquidity.”
PHOTO LINDSEY WASSON, ASSOCIATED PRESS
This social movement paralyzed the two large assembly plants in Renton and Everett as early as Friday morning.
“The message that the tentative agreement reached with IAM leaders is not acceptable to its members is clear,” Boeing responded after the votes, saying it was “ready to return to the negotiating table to reach a new agreement.”
Boeing shares ended Friday’s session on the New York Stock Exchange down 3.69%.
The rejected collective agreement included a 25 percent wage increase over four years, a commitment to invest in the region, and the construction of the next plane — scheduled for 2035 — around Seattle, which was supposed to provide jobs for decades.
Boeing had hoped that these concessions would be enough to avoid a strike. Its financial situation has been precarious since the crash of two 737 MAX 8s in 2018 and 2019 (346 deaths), and numerous production quality problems.
“It’s no secret that our business is going through a difficult time, partly because of our own past mistakes. […] “A strike would jeopardize our joint recovery,” warned Kelly Ortberg, the group’s new boss, on Wednesday evening, urging employees not to “sacrifice” future progress because of “frustrations related to the past.”
But the disgruntled consider the salary increase too far removed from the union’s demands (+40% initially) and the pension section unsatisfactory. “We were sold off,” Kamie Bryan, a Boeing employee for 18 years, told AFP on Thursday.
“They’re talking about a 25% increase, but that’s not the case,” said Paul Janousek, denouncing a “misleading” presentation by Boeing. According to this 55-year-old electrician, 13 of whom have worked at the aircraft manufacturer, his increase would only reach about 9% because of the elimination of an annual bonus.
According to the IAM rules, strikers will receive $250 per week starting from the third week of work stoppage.