Boeing braces for union vote on wage deal that could end costly strike

October 23

By Daniel Catchpole

SEATTLE (Reuters) – Boeing factory workers will vote on Wednesday on a new contract proposal that could bring an end to a more than five-week strike, in a crucial moment for the troubled planemaker as it wrestles with a deepening financial crisis.

Some 30,000 machinists downed tools in Boeing’s West Coast factories on Sept. 13, halting production of the best-selling 737 MAX and 767 and 777 wide-body programs.

Since then, Boeing and the leadership of the International Association of Machinists and Aerospace Workers (IAM) union have been locked in often acrimonious negotiations, with both sides accusing the other of torpedoing talks.

Voting on the latest contract proposal will begin at 8 a.m. PDT (1500 GMT) and close at 5 p.m. The ballot will offer workers the choice to either accept or reject the deal with a simple 50%+1 majority needed to decide the result.

The vote comes on the same day as Boeing’s third-quarter financial results, which are expected to include a hefty loss. Ratings agencies have warned they could downgrade Boeing’s mounting debt to “junk” status if the strike drags on.

The latest offer includes a 35% pay hike over four years, a $7,000 ratification bonus, a reinstated incentive plan and enhanced contributions to workers’ 401(k) retirement plans.

The wage increase and ratification bonus are higher than in a previous offer that was rejected by 95% of workers in a vote last month. But the salary hikes fall short of a 40% pay rise over four years and the restoration of the defined-benefit pension lost in 2014 demanded by the IAM.

Some analysts have questioned whether the proposed contract will muster enough support from workers.

Reuters spoke to 14 striking factory workers in the Seattle area ahead of the vote. Three said they would accept the deal, eight said they would reject the proposal and three were undecided.

“I’m willing to wait it out to get a little sweeter deal,” said Jeromy Allen, a 53-year-old worker in the 737 MAX factory who said he wants Boeing to raise its wage offer and lower health insurance costs.

Many workers are still angry about the last set of negotiations in 2014 when Boeing used the threat of moving production of the new version of the 777 out of the region to push through a deal that ended traditional pensions.

“I’ve never gone into a strike where it was more about the last contract than the current one,” said Kevin Roehl, who works on the 737 and has been with Boeing for 35 years.

Roehl said he would vote to approve the latest deal because he was worried about his health after Boeing canceled workers’ insurance due to the strike.

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Boeing’s first strike in 16 years is costing the company around $100 million in daily revenue, analysts say. It is also sending shockwaves through the sprawling aerospace supply chain, where companies fear widespread job losses if the current contract is rejected.

“You’re actually holding the lives of people like us in your hands,” said Andrew Flores, president of California-based family-run supplier Independent Forge Co., which has already laid off a handful of its 26 employees due to the strike.

(Reporting by Daniel Catchpole in Seattle; Additional reporting by Allison Lampert in Montreal and David Shepardson in Washington; Writing by Joe Brock; Editing by Jamie Freed)

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