Boeing strike ends as workers accept new pay deal

Boeing workers have accepted a new contract offer, ending a seven-week strike that halted most aircraft production and deepened a financial crisis at the troubled planemaker.
The union for the 33,000 striking workers at factories on America’s west coast said that members voted 59 per cent in favour of the new contract, which included a 38 per cent pay rise spread over four years and enhanced retirement contributions.
“This is a victory. We can hold our heads high,” Jon Holden, the lead negotiator for the International Association of Machinists and Aerospace Workers (IAM), said after the results were announced. “Now it’s our job to get back to work.”
The machinists, who work on the best-selling 737 Max jet, as well as the 767 and 777 widebody aircraft, had been on strike since September 13. They had demanded a 40 per cent wage increase and the restoration of a defined-benefit pension they lost a decade ago for a 401(k) retirement plan. They had rejected two previous offers.
The old pension will not be restored but workers received a bump to company matching contributions for their 401(k) plans.
David Lemon, a worker in equipment calibration certification in Seattle who voted in favour of the contract, calculated that the pay increase and a 4 per cent bonus — the guaranteed minimum annual payout to the reinstated incentive plan — amounted to the 40 per cent increase they’d gone after. “We got there,” he said. “I’m ready to get back to work.”
The end of the first strike in 16 years by Boeing’s largest union eases pressure on Kelly Ortberg, the new Boeing chief executive who was brought in to turn around the company’s fortunes. Boeing has suffered several setbacks since a door panel blew off an almost new 737 Max passenger jet mid-flight in January.
In a message to Boeing employees after the vote, Ortberg said he was pleased that the union had ratified a deal. Workers had rejected two previous offers.
He said: “While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company.”
Boeing also promised to build the next aircraft in the Seattle area, Holden said.
It will take weeks to increase production, with 737 Max output per month expected to be in single digits for some time — well short of the 38 a month targeted before the strike.
Workers can start returning to building planes from Wednesday and must be back to work by November 12, the IAM said. Boeing said that some people would have to be retrained owing to the prolonged period away from the factory floor.
The strike was costing Boeing about $100 million a day in lost revenue, analysts said. Last week the manufacturer raised $24 billion from investors to preserve its investment-grade credit rating.
Boeing has said that the average annual machinists’ pay at the end of the new four-year contract would be $119,309, up from $75,608 previously. The pay increase could add $1.1 billion to Boeing’s wage bill over the four years, while a $12,000 ratification bonus for each union member could result in a further $396 million in outflows, according to analysts at Jefferies.