To avoid strike, Boeing promises 25% pay hike—and to build next jet in Seattle

Boeing is hoping to avoid a strike Friday with a tentative deal reached Sunday with the Machinists union representing 33,000 of its West Coast employees fighting for better wages and working conditions.

If Boeing employees agree to the deal in a vote Thursday, their new contract will provide the “largest-ever general wage increase” in the company’s history, Boeing Commercial Airplanes president and CEO Stephanie Pope said in a press release.

The potential deal guarantees that over the next four years, Boeing employees would receive a 25 percent pay raise, as well as “lower medical cost share to make healthcare more affordable, greater company contributions toward” retirement, and “improvements for a better work-life balance,” Pope said.

The offered contract also notably includes “a commitment to build Boeing’s next new airplane in the Puget Sound region,” Boeing said, which CNN noted dropped a “threat” of moving production to Boeing’s non-union plant in South Carolina. It’s unclear when Boeing will announce its next jet, the BBC reported, but Pope promised workers that the commitment ensured “job security for generations to come.”

“Boeing’s roots are here in Washington,” Pope said. “It is where generations of workers have built incredible airplanes that connect the world. And it’s why we’re excited that, as part of the contract, our team in the Puget Sound region will build Boeing’s next new airplane.”

Workers represented by the International Association of Machinists (IAM) had asked for a 40 percent pay raise but were urged to accept the tentative deal, which IAM’s negotiating team said was “the best contract we’ve negotiated in our history.”

“We used every ounce of power we could to go after everything you said was important,” IAM’s negotiating team said. “We did not get everything we wanted, but you all can be proud of your Strength, Solidarity, and Unity because you have achieved the best contract we have ever had. An agreement that sets the bar for everyone else in the industry to strive for.”

Workers get “seat at the table” to discuss safety issues

Workers will have to accept the terms for Boeing to avoid a planned strike Friday. If the contract is voted down or there is a no vote, workers could potentially move ahead with the strike, which Boeing cannot afford, JPMorgan analysts told Investors Business Daily.

The shift to production in the Seattle area is significant, partly because Boeing has been under fire for inadequate safety testing at its South Carolina plant. In July, Boeing pled guilty to conspiracy to defraud the Federal Aviation Administration in connection with the agency’s evaluation of the 737 Max after fatal crashes. One plane also had to make an emergency landing after a door blew off mid-flight due to missing bolts that investigators believed were left off during production at Boeing’s factory.

Since the grounding of the 737 Max in 2019 and 2020, Boeing has reported operating losses totaling $33.3 billion, CNN reported. This put Boeing in “no position to deal with striking workers for the first time in 16 years,” CNN noted.

IAM’s negotiating team pushed workers to accept the deal and help right the ship at Boeing, a company workers “love” because they “couldn’t be more proud of the jobs we do or the products we build.”

“Financially, the company finds itself in a tough position due to many self-inflicted missteps,” IAM’s negotiating team told workers. “It is IAM members who will bring this company back on track. As has been said many times, there is no Boeing without the IAM.”

In addition to better perks like 12 weeks of paid parental leave, a new floating holiday, and reduced mandatory overtime, the contract also would give workers “a seat at the table regarding the safety and quality of the production system,” IAM’s negotiating team said. That includes a chance to meet annually and raise concerns with Boeing’s standing aerospace safety committee chair, the contract said.

Boeing cannot afford work stoppage

Announcing the tentative deal, Boeing has promised to deepen its commitment to the Pacific Northwest in the aftermath of the scandals. The company’s former CEO Dave Calhoun reportedly told investors that Boeing would have to work “hard” to avoid a strike because a work stoppage would risk further financial plight,” CNN reported.

“We know wage asks will be big,” Calhoun told investors, pushing to find a compromise with workers as the company seeks to bounce back, as “we’re not afraid to treat our employees well in this process.”

Workers will still have the upper hand as they gather to vote this week, at which point Boeing will learn if its “historic” tentative deal is enough to keep it on the road to recovery.

“Take these next few days and look over every change in this proposal prior to your vote on September 12th,” IAM’s negotiating team told workers. “Whatever you decide, know that your Union stands with you. We are prepared to fight if needed, but we believe this proposal will benefit all our Members and Our Future.”