SEATTLE (AP) — Boeing staff picketed relatively than construct planes within the Pacific Northwest on Friday after overwhelmingly rejecting a union contract that may have increased their wages by 25% over 4 years.
While the strike by 33,000 engineers won’t affect air travel within the near future, it’s prone to lead to the suspension of production of Boeing's best-selling passenger aircraft, an extra setback for an organization already scuffling with billions of dollars in financial losses and a damaged fame.
The company said it was taking steps to conserve money while the CEO explores ways to barter a collective agreement that unionized factory staff would accept.
Late Friday, the Federal Mediation and Conciliation Service said it could convene recent talks early next week.
“FMCS has been in contact with both IAM and Boeing to support their return to the negotiating table and commends the parties for their willingness to come together and work toward a mutually acceptable solution,” the agency said in a press release.
Boeing shares fell 3.7 percent on Friday, bringing the decline for the yr to just about 40 percent.
The strike began shortly after a regional branch of the International Association of Machinists and Aerospace Workers reported that in a vote Thursday, 94.6 percent of participating members rejected a contract offer approved by the union's bargaining committee and 96 percent voted in favor of the strike.
Shortly after midnight, striking staff stood outside the Boeing plant in Renton, Washington, holding signs that read, “Have you seen the damn housing prices?” Car horns blared and a boom box blared songs like “We're Not Gonna Take It” by Twisted Sister and “Look What You Made Me Do” by Taylor Swift.
Many of the employees who spoke to reporters said they felt the pay offer was inadequate given the increased cost of living within the Pacific Northwest. John Olson said his salary had increased by only 2 percent during his six years at Boeing.
“The last contract we negotiated was 16 years ago, and the company calculates wage increases based on wages from 16 years ago,” said the 45-year-old toolmaker. “They can't even keep up with inflation.”
Others expressed dissatisfaction with the corporate's decision to alter the factors for calculating annual bonuses.
The machinists earn a median of $75,608 a yr, not including additional time. According to Boeing, this amount is anticipated to rise to $106,350 by the top of the planned four-year contract.
Under the rejected collective agreement, staff would have received a lump sum payment of $3,000 and a discount in health care costs along with wage increases. Boeing also met a key demand of the union and promised to construct its next recent aircraft in Washington state.
But the offer fell wanting the union's original demand for wage increases of 40 percent over three years. The union also wanted to revive traditional pensions that were eliminated a decade ago, but agreed to extend recent Boeing contributions to employees' 401(k) retirement accounts by as much as $4,160 per employee.
The union's chairman, IAM District President Jon Holden, said the union would conduct a survey of members to seek out out what issues ought to be on the forefront when negotiations resume. Boeing responded to the strike announcement by saying it was “ready to return to the bargaining table to reach a new agreement.”
“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to members. We remain committed to resetting our relationships with our employees and the union,” the corporate said in a press release.
Boeing Chief Financial Officer Brian West said at an investor conference in California on Friday that the corporate was dissatisfied that it had reached an agreement with union leadership that had been rejected by rank-and-file staff.
During the strike, Boeing will lose a key source of money: airlines pay the majority of the acquisition price after they receive a brand new plane. West said Boeing – which has about $60 billion in total debt – is now searching for ways to conserve money. He declined to estimate the financial impact of the strike, saying it could rely on how long the strike lasts.
Before the strike, recent CEO Kelly Ortberg gathered feedback from staff during factory visits and he’s “already working to reach an agreement that addresses and takes into account their concerns,” West said.
White House press secretary Karine Jean-Pierre said Biden administration officials have been in contact with Boeing and the union.
“We believe they need to negotiate in good faith and work toward an agreement that gives workers the benefits they deserve. That would also strengthen the company,” she said.
This yr, things have hardly gone well for Boeing: In January, a passenger plane's panel burst, leaving a gaping hole, and NASA left two astronauts in space as a substitute of sending them home in a problem-plagued Boeing spacecraft.
The striking machinists assemble the 737 Max, Boeing's best-selling passenger jet, in addition to the 777 jet and 767 cargo plane. The strike is unlikely to stop production of the Boeing 787 Dreamliner, which is built by nonunion staff in South Carolina.
The strike represents one other challenge for Ortberg, who was given the duty just six weeks ago of restructuring an organization that has lost greater than $25 billion over the past six years and fallen behind European rival Airbus.
Ortberg made a final try and salvage a deal that had the unanimous support of union negotiators.
He told engineers on Wednesday that “nobody wins” in a walkout and that a strike would jeopardize Boeing's recovery and lift further doubts in regards to the company within the eyes of airline customers.
“Boeing is no secret that our business is going through a difficult period, due in part to our own past mistakes,” he said. “I know that by working together we can get back on track, but a strike would jeopardize our collective recovery, further undermine our customers' confidence and impair our ability to shape our future together.”
According to union leader Holden, Ortberg found itself in a difficult position because machinists were offended about stagnant wages and pension and medical health insurance concessions they’d made since 2008 to forestall the corporate from moving jobs to other locations.
“It's about respect, it's about the past and it's about fighting for our future,” Holden said in announcing the strike.
Stopping aircraft production could prove costly for Boeing, depending on how long it lasts. The last strike at Boeing in 2008 lasted eight weeks and price the corporate about $100 million a day in deferred revenue. A strike in 1995 lasted 10 weeks.
Before the tentative agreement was announced on Sunday, Jefferies aerospace analyst Sheila Kahyaoglu estimated that a strike would cost the corporate about $3 billion based on the 2008 strike plus inflation and current aircraft production rates.
“I'm not sure how long this strike will last, but no matter how long it lasts, we're going to stay here until we get a better deal,” Jones said.
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