Boeing machinists have rejected a new labor contract that included a 35% wage increase over four years, extending a strike that has lasted more than five weeks. The strike, which has halted much of Boeing’s aircraft production in the Seattle area, has cost the company approximately $1 billion per month, according to S&P Global Ratings.
On Wednesday, 64% of the machinists voted against the proposed deal, which included increased 401(k) contributions, a $7,000 bonus, and wage raises. This is the second time machinists have voted down a contract offer, with a previous tentative agreement in September offering a 25% raise. The union, the International Association of Machinists and Aerospace Workers (IAM), had initially sought a 40% wage increase, but members felt the latest proposal still didn’t meet their demands.
The strike, which began on September 13, involves more than 32,000 machinists across the Puget Sound area, Oregon, and other locations. This is the first machinist strike since 2008. Workers are seeking higher wages in response to rising living costs in the region and are also pushing for the reinstatement of pension plans, which were eliminated in a 2014 contract. The rejected proposal did not include the restoration of pension benefits, a point of contention for many workers.
Despite the setbacks, the new proposal included Boeing’s commitment to building its next aircraft in the Pacific Northwest, a key demand from union members after the company moved its 787 Dreamliner production to a non-union facility in South Carolina. However, the union’s president, Jon Holden, acknowledged that while there were “tremendous gains” in the new deal, it was still insufficient to meet workers’ expectations. The union now aims to return to the negotiating table.
Boeing declined to comment on the results of the vote. The strike comes at a difficult time for the company, which is struggling to recover from years of safety and quality issues. The company reported a $6 billion loss in the latest quarter, its largest since 2020. New CEO Kelly Ortberg had prioritized resolving the labor dispute as part of a broader effort to stabilize Boeing, which also plans to cut 10% of its 170,000-strong global workforce.
The prolonged strike is also disrupting Boeing’s supply chain, with Spirit AeroSystems, a major supplier, announcing temporary furloughs for 700 workers last week. Spirit warned of further layoffs if the strike continues, adding pressure on Boeing to resolve the dispute quickly as it tries to ramp up production of its 737 aircraft and other models.
