Boeing’s striking union has reached a preliminary agreement with management after over a month of labor disputes halting production and costing the company billions. The deal, facilitated by the Biden administration, includes a proposed 35% pay increase over four years and a $7,000 signing bonus, but lacks restoration of the abolished pension plan. The union plans to present the proposal for a vote on October 23, as the strike has incurred $7.6 billion in direct losses.
Washington – The union representing Boeing workers announced on Saturday that a preliminary agreement has been reached with the company’s management, coming more than a month into a labor dispute that has halted production of its flagship aircraft and inflicted severe financial losses on the manufacturer.
This agreement was facilitated by the Biden administration’s involvement, particularly through Labor Secretary Julie Su, as noted by the union via social media. Negotiations have been ongoing since mid-September, aided by federal mediators.
The International Association of Machinists and Aerospace Workers (IAM) stated on social media, “We have received a negotiated proposal that is worthy of consideration and will be presented to our members.” A vote on this proposal is scheduled for Wednesday, October 23.
The new agreement offers workers a 35% salary increase over four years and a signing bonus of $7,000. This proposal comes after negotiations regarding wages had stalled, with unions initially seeking a 40% pay hike.
However, the proposal does not reinstate the pension system previously eliminated in 2008; instead, Boeing is set to increase its contribution to employees’ funded pension plans.
In response, the aerospace giant expressed anticipation for the vote on this negotiated proposal from its workforce.
Challenging Times Ahead
The strike, which involves over 33,000 workers, has disrupted operations at Boeing’s two primary facilities in the Seattle area since September 13. These include the Renton plant, known for producing the 737—Boeing’s most popular aircraft—and the Everett plant, which manufactures the 777 and 767 models and various military programs.
To manage its cash flow amid these challenges, Boeing has implemented several measures, such as planning to reduce its global workforce by approximately 10% in the coming months, equating to about 17,000 jobs.
The company has also reported several billion dollars in pre-tax charges for the third quarter, largely due to the strike and the suspension of 767 Freighter production.
On October 15, Boeing disclosed its strategy to raise up to $25 billion through financial markets and secure $10 billion in credit lines from multiple banks.
In a stock market filing, Boeing indicated it may issue various securities, including bonds and shares, to restore cash flow hindered by the labor stoppage.
Recent estimates from the Anderson Economic Group indicate that the five-week strike has resulted in direct losses totaling approximately $7.6 billion, with Boeing itself incurring around $4.35 billion in damages and its suppliers losing about $1.77 billion.
Boeing is currently facing significant hurdles, which have been exacerbated by ongoing production quality issues highlighted by an in-flight incident in early January involving an Alaska Airlines 737 MAX 9.
The company remains under close scrutiny from the U.S. Federal Aviation Administration (FAA) and is subject to multiple investigations from Congress and federal law enforcement.