Boeing union starts strike, 737 production halted!

Boeing factory workers have gone on strike, rejecting a proposed 25% wage increase over four years.

According to Bloomberg, the union representing 33,000 Boeing employees voted to strike starting midnight on Friday in Seattle, rejecting the peace appeal from Boeing's new CEO Kelly Ortberg and turning down the union leaders' suggestion to accept a guaranteed 25% wage increase over four years, demanding better treatment instead.

This strike marks the first strike by the International Association of Machinists and Aerospace Workers District 751 (IAM District 751) since 2008. The strike has paralyzed Boeing's commercial airplane manufacturing plant in Seattle, leading to a halt in 737 production, restricting Boeing's ability to deliver aircraft, and a prolonged strike could impact Boeing's credit rating. TD Cowen analyst Cai von Rumohr estimates that the strike could last more than 50 days, reducing Boeing's cash flow by $3-3.5 billion, similar to previous strikes.

This puts pressure on Boeing - since the accidents in January exposed flaws in Boeing's factories and forced production cuts, Boeing has been losing a significant amount of cash, facing financial difficulties. With $45 billion in debt, the aircraft manufacturer is in a tough spot, and this week has been seeking opinions from other workers to see if they can temporarily replace striking IAM members.

IAM District 751 President Jon Holden stated that as the union claims this is an unfair labor practice strike, the Federal National Labor Relations Board will appoint a mediator, with no negotiations scheduled yet.

In a recent statement, Boeing expressed its commitment to reshaping its relationship with employees and unions.

No New Agreement Reached Yet

The current contract between Boeing and the union was reached after an eight-week strike in 2008. In 2014, both parties agreed to extend the agreement, which expired at midnight on Thursday.

Before signing a new contract, IAM District 751 proposed several improvements to worker treatment, including a 40% pay raise. Boeing did not agree.

Earlier this week, union representatives suggested that union members accept a new agreement with a 25% pay raise over four years. Boeing also committed in this agreement to produce the next commercial airplane project in the Seattle area within the contract period.

Union members voted against this agreement - despite being the largest pay raise Boeing has ever offered, workers had expected a much larger increase and were angry about the provision to cancel annual bonuses.

Many union members expressed anger on social media, criticizing the agreement and accusing IAM leadership of compromising too much.

Boeing's Chief Operating Officer and head of commercial airplane business, Stephanie Pope, urged workers to accept the agreement, admitting on Tuesday that Boeing had previously made its best proposal after worker strikes in past negotiations, but not this time:

"We have chosen a new path - we showed the best sincerity at the first proposal, giving you the rewards and respect you deserve. Let me be clear: we have not reserved chips for a second vote."

The Angry Strike of the Masses

Union members overwhelmingly supported the strike plan, with 94.6% voting against the current 25% pay raise agreement and 96% voting in favor of the strike. Amid chants of "strike," Holden told the media:

"This has been brewing for a long time, and tonight our members have loudly and clearly expressed their wishes. Clearly, some aspects of this agreement are not good enough."

Union members expressed their anger over various issues, including stagnant wages, the cancellation of pensions in the 2014 agreement, and the requirement for hourly workers to work for six years before reaching the top wage category. Zachary Haley, a 737 quality inspector who has been working at Boeing for 5 years, said:

"I can only make ends meet by working overtime."