Potential work stoppage looms over Boeing as union employees cast votes on proposed labor agreement today
Boeing confronts a pivotal union vote tonight that could persuade employees to leave their posts at a parts center in Oregon and three airplane factories along with a fabricating plant in the Seattle area. This walkout may occur despite the union and the company reaching a preliminary agreement on a four-year contract to prevent a work stoppage.
Some of the benefits included in the contract would see union members' wages increase at least 25% over the four-year period. Union officials, announcing the preliminary agreement on Sunday, described it as "the best contract we've ever negotiated in our history." However, employees are discontented: They feel coerced into accepting two past deals that eliminated their traditional pension plans and raised their health insurance costs.
The union agreed to these unpopular deals in previous years when Boeing was recording substantial profits. The union compromised at the time due to concerns that Boeing would transfer union jobs to non-union plants that the company was threatening to establish.
Employee resentment has also accumulated over the years due to various issues that have been either tragic, shameful, or financially devastating for Boeing. These problems include "two fatal crashes" that claimed 346 lives, "a 20-month grounding of its best-selling jet," and an "Alaska Airlines flight door plug detaching" in January because the plane departed the factory without the required four bolts to secure it. Boeing admitted to committing criminal deception against regulators earlier this year and has experienced more than $33 billion in core operating losses since reporting a profit in 2018, resulting in its credit rating nearing "junk" status.
Union members have organized numerous demonstrations outside of Boeing facilities this week and may ultimately reject the new contract that union leaders negotiated with Boeing management. If they reject the deal, they could vote to go on strike as early as Friday.
A strike would not impact consumer travel. Airplanes already delivered to airlines and in operation worldwide will continue to fly. However, it would cause a delay in deliveries of jets scheduled for airlines, halting Boeing's primary revenue source.
Depending on the strike's duration, it could also create problems for nearly 10,000 Boeing suppliers spread across all 50 US states. Beyond the 33,000 union members out of the nearly 150,000 US employees, Boeing estimates its own annual contribution to the US economy to be $79 billion, sustaining 1.6 million jobs directly and indirectly.
Forecasts of a 'no' vote on the agreement
Even if the voters do not endorse the new contract, a strike is not guaranteed. It would require a two-thirds supermajority of members voting to go on strike for a walkout to commence. With fewer than two-thirds of members voting to strike, the contract would still be enacted, even if a majority of members opposes it.
Boeing refers to the deal with the International Association of Machinists (IAM) as the most lucrative it has ever struck with the union. CEO Kelly Ortberg, who has only been in the position for a month, has pledged to "reset our relationship" with the union.
Jon Holden, president of the IAM local who led the negotiations and supports the agreement, has now predicted that members will reject the contract and authorize a strike.
"The response from people is that it's not good enough. Right now, I think it will be voted down, and our members will vote to strike," Holden told The Seattle Times in an interview, which the union confirmed to CNN.
Ortberg issued a statement to union members Wednesday evening appealing for their support, but acknowledged that the rank-and-file hold a significant amount of animosity toward the company.
"I know the reaction to our tentative agreement with the IAM has been passionate," he said. "I understand and respect that passion, but I ask you not to sacrifice the opportunity to secure our future together, because of the frustrations of the past."
If they vote to strike, it would begin at 11:59 p.m. PT Thursday, or 2:59 a.m. ET on Friday. Voting continues until 6 p.m. PT Thursday, and the results of the vote should be known shortly after that.
Holden, while promising to support workers if they vote to go on strike, told members in a message Tuesday that the union leadership recommends accepting the deal because it represents the best achievable result without a strike.
"We recommended acceptance because we can't guarantee we can achieve more in a strike," he said in that message. "But that is your decision to make, and it is a decision that we will protect and support, no matter what. We have secured all that we could in bargaining short of a strike. The membership must now take it into their own hands."
A 'no' vote on the agreement may not prompt a strike
However, the intensity of rank-and-file animosity toward Boeing, as well as unusual union rules, will determine if workers go on strike.
Those rules stipulate that members will cast two different votes on Thursday. The first vote is whether or not to ratify the agreement. If more than 50% of the members vote in favor of the preliminary agreement, it will be officially approved, preventing a strike, no matter how many workers vote to strike. But even if a majority votes "no" on the contract, workers will not go on strike unless at least two-thirds of members have also voted to strike. If fewer than two-thirds of members vote against a strike, then the contract takes effect, regardless of the results of the ratification vote.
In 2002, a split vote occurred with 62% voting against ratifying a deal and only 61% opting for a strike. This was the last instance of such a scenario leading to a deal's ratification at Boeing. The last time the workforce went on strike was in 2008.
The Content of the Agreement
The agreement, sealed on a Sunday, guaranteed workers a minimum increase of 25% in wages throughout the deal's four-year duration. Additionally, cost-of-living adjustments were promised, potentially leading to even higher wages. Furthermore, the agreement aimed to reduce workers' out-of-pocket expenses for healthcare coverage and boost the company's contributions to retirement accounts.
The agreement also included a commitment from the company that the subsequent commercial jet would be manufactured at a unionized factory in Washington state. Over the years, Boeing had warned of relocating production to a non-union plant. They accomplished this in 2009, only a year after the 2008 strike, and continue to construct the 787 Dreamliner there. However, they ceased the production of the Dreamliner at the unionized plant in Washington in 2021.
Despite the preliminary agreement on a four-year contract that includes a 25% wage increase for union members, discontentment persists due to past deals that eliminated traditional pension plans and raised health insurance costs. If union members reject the new contract, they might vote to go on strike at Boeing's Oregon parts center and three airplane factories in the Seattle area.
The agreement, which also aims to reduce healthcare costs and boost retirement account contributions, could still be enacted even if a majority of members opposes it, as long as fewer than two-thirds vote against a strike. This rule, unique to Boeing union contracts, has the potential to prevent a strike, even if a majority of members vote against the agreement.
