Boeing's West Coast factory workers have approved a new contract, concluding a seven-week strike that significantly disrupted production and exacerbated the company's financial challenges. The new agreement includes a 38% salary increase over four years and was supported by 59% of union members, easing pressure on Boeing's new CEO, Kelly Ortberg, after previous proposals were rejected.
Since January, Boeing faced numerous setbacks, including a near-catastrophe involving a 737 MAX aircraft, leading to the first strike in 16 years. About 33,000 mechanics responsible for Boeing's 737 MAX, 767, and 777 aircraft manufacturing went on strike on September 13, demanding a 40% pay raise and restoration of lost pension benefits.
The new contract did not reinstate the old pension system but improved company-matched contributions to the 401(k) plan. Boeing also pledged to construct its next aircraft in the Seattle area. The contract negotiation, facilitated by President Biden and Acting Labor Secretary Julie Su, was praised by both parties. Biden emphasized the effectiveness of collective bargaining.
Post-strike, Boeing aims to gradually increase production and improve cash flow, with expectations that 737 MAX output may see a minor monthly reduction from its pre-strike target of 38 units. While the strike cost Boeing approximately $100 million daily, it raised $24 billion to maintain its investment-grade credit rating. A positive relationship rebuild between Boeing and the machinists is now crucial, considering wage growth and the rising cost of living in the Seattle area.
The new contract forecasts an average annual salary of $119,309 by its conclusion, up from $75,608. Despite the approval, the contract faces criticism, with some union members expressing dissatisfaction, believing the leadership adopted a defeatist attitude in negotiations.
