Workers at Boeing, representing 22 percent of the company’s workforce, went on strike on September 13 after rejecting a contract deal. This marks the first strike at Boeing since 2008. Members of two local unions of the International Association of Machinists and Aerospace Workers overwhelmingly voted to reject the contract and begin the strike, with 94.6 percent voting against the contract and 96 percent supporting the strike.
The strike, which began at midnight, involves 33,000 workers and could have a significant financial impact on Boeing. According to TD Cowen, a 50-day strike could cost the company between $3 billion and $3.5 billion in cash flow. This is a considerable risk for Boeing, considering that the 2008 strike lasted 52 days and cost the company an estimated $100 million per day.
The key issue at hand is the wage increase proposed by Boeing compared to the union members’ request. Jefferies analyst Chloe Lemarie highlights that the duration of the strike will depend on closing this gap. This is particularly crucial for the production levels of the 737 MAX, as a long strike could pose a significant risk.
Boeing and the unions announced over the weekend that they had reached a tentative agreement on a new contract. The proposed contract includes changes such as raising the starting base pay from $12 an hour to $21 an hour and offering the option to receive a pension as a lump sum payment upon retirement. However, the unions decided to reject this offer and proceed with the strike.
The striking workers are primarily located in the Seattle and Portland areas, where they are involved in the production of the 737 MAX and other aircraft. Shortly after midnight, the workers started gathering outside the entrances of Boeing factories, holding placards that read, “On Strike Against Boeing.” There is a strong sense of solidarity among the workers, with one employee expressing their willingness to strike for an extended period if necessary to achieve their goals.
The International Association of Machinists and Aerospace Workers expressed its support for the strike and commended the negotiating teams for their efforts. The association further stated that they will regroup and plan the next steps to secure an agreement that their membership can approve.
As of now, neither the White House nor the presidential candidates, Vice President Kamala Harris and former President Donald Trump, have commented on the strike. This omission raises questions about how the government will respond to this labor dispute.
In conclusion, the Boeing strike represents a significant challenge for the company and its employees. The financial impact could be substantial, and the duration of the strike remains uncertain. It remains to be seen how Boeing and the unions will navigate the negotiations and reach a resolution that satisfies both parties.
