Boeing workers in northwest U.S. vote to strike after rejecting pay deal

Aviation giant Boeing is facing industrial action at two major assembly plants in the US as workers voted Thursday to strike after rejecting a 25 percent pay increase over four years. Factory workers seeking a 40 percent wage hike criticised the proposed contract as “misleading” since it eliminates an annual company bonus.

Thousands of Boeing factory workers in the United States overwhelmingly voted on Thursday to strike, spurning a contract that the embattled aviation giant characterized as a boon for manufacturing staff given the company's stressed financial condition.

Hourly workers in the Seattle region rejected the contract with a vote of 94.6 percent and to strike with 96 percent, said Jon Holden, president of the International Association of Machinists and Aerospace Workers District 751.

"Our members spoke loud and clear tonight," said Holden, who represents about 33,000 workers in the Pacific Northwest. "We strike at midnight."

A strike will shutter two major plane assembly plants in the Puget Sound region and sideline some 33,000 workers.

Thursday's vote marks a decisive rejection of a deal that line workers said was far less generous than depicted by Boeing executives, marking the latest show of defiance by unions following earlier strikes in the auto, entertainment and other industries.

Boeing said that despite the outcome, it was ready to resume negotiations.

"We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement," a statement said.

Led by new CEO Kelly Ortberg, Boeing had hoped a 25-percent wage hike over four years and a commitment to invest in the Puget Sound region would avert a costly strike as the company struggles to right the ship.

Ortberg argued in a message to staff that the general wage hike marked the largest in history and that a strike "would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together."

But rank-and-file workers reacted with fury to the agreement, which was initially backed by IAM leadership.

'Hollow' commitments

Workers had sought a 40 percent wage hike and critics have said the 25 percent figure is inflated because the new deal also eliminates an annual company bonus.

Other points of contention include the deal's failure to restore a pension, as well as a Boeing pledge to build its next plane in the Seattle region, which critics view as a "hollow" commitment because it offers no promises beyond the four-year contract.

"They're talking about a 25 percent increase and it's not," said Paul Janousek, an electrician in Everett who voted to strike after concluding Boeing's spin was "misleading."

Janousek, 55, who has worked at Boeing for 13 years, figures his raise is only about nine percent after Boeing dropped the annual bonus.

Some workers also expressed anger about Dennis Muilenburg and Dave Calhoun, two former CEOs who received multi-million dollar compensation even as the company faced turmoil upon their departure.

"Striking isn't ideal, but it's for the best for your long-term well-being," said Joe Philbin, a structural mechanic who has been at Boeing for six months.

Philbin said he will work side jobs if a strike drags out, but that he and his wife have been holding off on having kids until the situation stabilizes.

"(Boeing) is a huge company, they can survive paying the people who do the work a little more," he said.

Big impact from strike?

The IAM has a history of striking, with the most recent stoppage in 2008 lasting 57 days.

Holden has said he initially backed the deal as the best that could be achieved without striking.

But the "real power" in the union resides with the workers, according to Holden, who said at a press conference that "awesome" wins by other unions had given the IAM "something to aspire to achieve as well."

Richard Aboulafia, managing director of the AeroDynamic Advisory consultancy, said a lengthy strike would damage Boeing's turnaround prospects, but noted that a 2023 strike at Boeing supplier Spirit AeroSystems lasted less than two weeks.

Boeing has been under renewed scrutiny since a January incident in which a fuselage panel blew out of an Alaska Airlines Boeing 737 MAX plane mid-flight, necessitating an emergency landing.