Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The union representing Boeing’s production workers in Washington state reached a tentative deal with the company early on Sunday morning that is likely to avert a strike that would have piled new problems on to the struggling manufacturer.
The agreement raises wages 25 per cent over four years, gives workers a voice on safety issues and pledges to launch the next commercial aeroplane in Puget Sound, preserving jobs in Washington.
The International Association of Machinists and Aerospace Workers District 751 called it “the best contract we’ve negotiated in our history” and one that secures “a future for us all”.
The union’s bargaining team has recommended its 33,000 members vote on Thursday to accept the deal, which will only take effect if members ratify it.
IAM, which had gone 16 years without bargaining a full contract, entered negotiations in a strong position owing to high demand for commercial jets, a resurgent US labour movement and a company that can ill-afford a work stoppage.
“Financially, the company finds itself in a tough position due to many self-inflicted mis-steps,” the union said. “It is IAM members who will bring this company back on track.”
Stephanie Pope, president of Boeing’s commercial planes division, said the aircraft maker had agreed to a contract to the end of 2028 that included “the largest-ever general wage increase”. The company will also shoulder a greater share of workers’ healthcare costs, contribute more towards retirement and reduce mandatory overtime.
Boeing also agreed that any new commercial jet launched in the next four years would be built in Washington.
“This contract deepens our commitment to the Pacific Northwest . . . meaning job security for generations to come,” she said.
Boeing has been under scrutiny by regulators and lawmakers since January when a door panel blew off a 737 Max during a commercial flight. The subsequent slowdown in production, as Boeing sought to improve manufacturing and quality processes, has led to fewer jet deliveries and billions in losses during the first half of the year.
Any strike would undercut Boeing’s ability to bring in cash and hamper efforts to improve the quality of the company’s manufacturing processes.
Chief executive Kelly Ortberg, who started in the top job last month, met briefly with IAM president Jon Holden and IAM W24 president Brandon Bryant, saying he wanted to “reset” the relationship between the company and the union. The group said in an August 29 statement that “no one benefits from a strike, and Boeing certainly does not want one”.
“Boeing is in the middle of trying to fix its factory floor,” said Melius Research analyst Rob Spingarn. “Labour is a real important part of that. Not having a work stoppage is desirable.”
The machinists last went on strike in 2008, for eight weeks. Union members agreed in 2014 to a deal that would extend the contract for eight years, from 2016 to 2024, after the company said it would move work on the 777X away from Washington — a tactic it has historically used to win concessions from its unionised workers. In a 51-49 per cent split, workers voted to accept higher healthcare costs, a 4 per cent raise and the loss of their defined-benefit pensions.
Many remained angry about that fight, and over the summer at Boeing’s factory in Renton workers showed their appetite for industrial action by creating a racket during their breaks with air horns and vuvuzelas. In July, tens of thousands of District 751 members rallied at a Seattle stadium for a strike authorisation vote.
The wage gains reflect similar increases won in recent years by unions representing autoworkers, truck drivers and airline pilots.
On safety and quality issues, a new area of bargaining for the machinists, the union had been seeking a seat on Boeing’s board. While it fell short of that goal, it won the right to an annual meeting with the chair of the board’s aerospace safety committee and a semi-annual meeting with the chief executive to discuss safety issues.
“We now have a seat at the table regarding the safety and quality of the production system,” the union said.
