Boeing machinists end strike, approve labor contract with 38% pay increases

Boeing Machinists agreed to a brand new labor contract Monday, ending a costly seven-week strike that crippled much of the corporate's aircraft production and worsened mounting losses.

Machinists voted 59% in favor of the brand new contract, which incorporates 38% wage increases over 4 years and other improvements.

The approval comes as a relief to Boeing's recent CEO, Kelly Ortberg, who took the highest job in August to steer the corporate through its safety and manufacturing crises. The company raised greater than $20 billion in a stock sale last week to deal with its financial woes after warning it will likely burn money through 2025.

Ortberg said last month that Boeing would cut 10% of its 170,000 employees, including managers, executives and clerks, to chop costs, with layoff notices to be sent out in mid-November. He painted an image of a leaner Boeing that focused on its core industrial and defense businesses.

“Although the last few months have been difficult for all of us, we are all part of the same team. We can only move forward if we listen and work together,” said Ortberg after signing the contract. “There is still much work ahead to return to the excellence that made Boeing an iconic company.”

Boeing will now give you the chance to restart production, which is crucial to the corporate's recovery as the vast majority of the aircraft's price is paid to customers upon delivery. But it should take a while to achieve goal production rates, especially for the 737 Max, Boeing's money cow.

“While ending the strike and returning workers to factories is a significant step in the right direction, resuming the strike will take time,” said Bank of America aerospace analyst Ron Epstein. He said some employees needed to be retrained.

The machinists who construct aircraft corresponding to the best-selling 737 Max, the 777 and the 767 must return to work no later than November 12, the union said. They could return as early as Wednesday.

“Yesterday's resolution of the strike has, in our view, borne little fruit,” Jonathan Root, senior vice chairman at Moody's Ratings, said in an announcement Tuesday. “The challenge remains to address the obstacles that stand in the way of achieving and subsequently maintaining strong positive free cash flow.”

President Joe Biden spoke with union leaders and Boeing's CEO on Tuesday to congratulate them on the deal, the White House said. Acting Labor Secretary Julie Su took part within the negotiations and flew to Seattle to fulfill with the union and the corporate, a number one U.S. exporter and defense contractor.

“This contract provides a 38% wage increase over four years, improves workers’ ability to retire with dignity, and supports equity in the workplace,” Biden said in an announcement. “This contract is also important for Boeing’s future as an important part of America’s aerospace sector.”

It was the machinists' third vote since September, when the 33,000 employees, mostly within the Seattle area, walked off the job after overwhelmingly rejecting a proposal that might have called for a 25% wage increase, far lower than what the union was searching for 40%. They voted against one other watered-down proposal late last month.

“This is a victory. We can hold our heads high,” said Jon Holden, president of District 751 of the International Association of Machinists and Aerospace Workers, as he announced the outcomes late Monday.

According to Boeing, the machinist's salary at the tip of this contract proposal will average $119,309. The first wage increase is 13%. The deal also increases 401(k) contributions and a signing bonus of as much as $12,000, or a mix of a $7,000 bonus and a $5,000 401(k) deposit.

Workers had complained concerning the skyrocketing cost of living within the Seattle area, where most Boeing planes are made.

However, the union had warned that the most recent deal, proposed last week, could also be pretty much as good as employees can expect.

“In every negotiation and every strike, there comes a point where we have gotten everything we could through negotiations and through the restraint of our workforce,” IAM District 751 said in an announcement on the time. “We are at this point now and risk declining or reduced supply in the future.”