Boeing (BA, Financial) is awaiting a crucial vote as striking workers prepare to make a decision on an improved contract proposal. The offer, backed by the union, promises a 38% pay raise over four years and an increased signing bonus. The workers' vote comes at a pivotal time for Boeing, which recently announced plans to raise up to $24.3 billion to stabilize its financial position, heavily impacted by a seven-week strike by over 33,000 workers at its US West Coast factories.
The International Association of Machinists and Aerospace Workers (IAM) has emphasized the importance of this negotiation phase, warning that prolonging the strike might lead to setbacks or lower offers. Previous proposals by Boeing were rejected by union members, and a meeting facilitated by US Acting Labor Secretary, Julie Su, acknowledged the efforts of both parties in reaching the current proposal.
The vote is scheduled before a major political event, highlighting the significance of the negotiation's outcome in the broader context of US labor relations. President Biden has applauded the negotiation efforts, asserting that Boeing's machinists deserve a strong contract after years of sacrifice.
A successful resolution of this labor dispute could bolster Boeing's new CEO, Kelly Ortberg, who is aiming to drive a significant cultural change within the company. Earlier this year, a Boeing aircraft incident brought attention to safety and quality concerns, adding pressure to resolve these labor negotiations effectively.
The strike has already halted production of Boeing's key aircraft models, including the 737 MAX, 767, and 777. Boeing has encouraged employees to scrutinize the proposal and participate in the upcoming vote. A resolution is expected to benefit not only Boeing but also the aerospace supply chain and airlines facing delivery delays due to the strike.
However, uncertainty remains about the outcome of the vote. The union had been pushing for a 40% wage increase and the restoration of a fixed-benefit pension plan that was lost a decade ago. A recent proposal featuring a 35% raise was declined by 64% of the workers, despite initial union support for a 25% increase that was overwhelmingly rejected in September. A Boeing 737 mechanic expressed his intention to vote against the new offer due to pension concerns but is ready to return to work if the majority approves it.
The latest offer from Boeing includes a $12,000 signing bonus, comprising $7,000 previously proposed alongside a $5,000 one-time deposit into members' 401(k) retirement accounts.
