On October 19, Boeing reached a temporary agreement with union leaders, which includes a substantial 35% pay increase over the next four years along with additional benefits. As a result, workers ended a five-week strike that significantly disrupted production.
According to a report by The Wall Street Journal on October 19, the company initially proposed a 25% raise, which was firmly rejected by the local Boeing engineers’ union. The strike began on September 13 and halted the production of most Boeing aircraft, leading to new rounds of layoffs.
The union announced the new proposal from the company and expressed that the terms were substantial enough to warrant consideration by its members.
Voting on the new labor agreement is scheduled for October 23. Previously, a temporary agreement with a 25% raise recommended by union leaders was rejected by nearly 95% of the workforce.
Boeing’s operations have been severely impacted by the strike, with estimated losses of $1 billion per month. CEO Kelly Ortberg has announced plans to lay off 17,000 workers and sell up to $25 billion in stocks or bonds to alleviate cash flow issues, warning that the company could face a $6 billion loss this quarter.
If the strike had continued, it would not only deplete Boeing’s resources but also put pressure on critical suppliers, leading to shortages that would damage the company’s ability to restore production levels.
Boeing’s factories have been idle for over a month, and the ripple effects are now affecting the extensive supplier network. Spirit AeroSystems stated on October 18 that it would cut 700 jobs, as Boeing has agreed to purchase this struggling fuselage supplier.
The Boeing engineers’ union, with 33,000 members assembling the best-selling 737 aircraft in the Seattle area, earns an average wage of around $75,000, which is insufficient to meet the high cost of living in the region.
Garrett Dress, a Boeing employee who started in July 2022, pointed out that the initial labor agreement was unacceptable because workers needed a larger raise to sustain a basic quality of life in the expensive Pacific Northwest.
The latest labor agreement does not restore pensions, which was a key demand for many union members. However, union leaders stated that this was beyond their reach. Boeing will increase contributions to employees’ 401(k) accounts, including a one-time payment of $5,000 to all workers’ retirement accounts.
Additionally, the company agreed to maintain year-end bonuses, a provision that was initially removed from the proposal, and to provide a bonus of $7,000. One victory for the union is that the company has withdrawn a clause that imposed harsh penalties on returning employees—a point of contention for many workers.
For the new agreement to pass, more than 50% of union members must vote in favor. After the engineers return to their jobs, it will take several weeks to restart the idle production lines. The company is eagerly awaiting the results of the vote on October 23.
