Boeing Co. is facing a growing backlash from rank-and-file workers to a tentative agreement – including a 25% pay increase – it struck with its largest union during a marathon weekend bargaining session.
In an exclusive interview, Jon Holden, president of IAM District 751, said he understood the angry response from members still fuming over a 2014 deal that raised health care costs and eliminated pensions. He defended the sweeping deal unveiled Sunday as the best his team could get during the final frenzied days of negotiations, which included a brief appearance by Boeing’s new Chief Executive Officer, Kelly Ortberg.
“We’ve gotten as much as we can through collective bargaining short of a strike,” Holden said. “But rightly so, the members are angry. It is now in their hands, as it should be.”
While investors Welcome After the preliminary agreement – which sent Boeing shares up 3.4% in New York on Monday – it is far from certain that the 33,000-member union will accept the offer. Maintaining labor peace and averting a prolonged strike are crucial to Boeing’s efforts to repair its battered balance sheet and improve the quality of work at its factories after years of unrest.
The 25% pay increase over four years that Boeing is offering is less than the union’s initial demand of 40%. However, it compares well with other recent employment agreements. The company is offering an immediate 11% pay increase, which would mean its highest-paid employees would earn $57.43 per hour. For some employment levels, minimum wages will increase by as much as 42.3% when cost-of-living adjustments are included.
The United Auto Workers ended a lengthy strike last year after agreeing to a 25% hourly wage increase over a period of over four years contract. At Stellantis NV, the highest hourly wage in 2028 will be higher than $42 per hour. At Spirit AeroSystems Holdings Inc. employees received a pay increase of 23.5% over a four-year period.
Boeing’s offer also eliminates a controversial bonus for IAM members that was tied to internal productivity, quality and safety measures. Employees are furious about the change, even though they were sometimes frustrated by the formula that could be distorted by supplier mistakes.
Holden acknowledged that his team had focused on guaranteed wages because members identified it as a top priority during meetings over the past two years. “I understand the frustration when there are no annual bonuses,” he added.
Preparations for the strike
Members of the International Association of Machinists and Aerospace Workers will vote Thursday on whether to accept the deal and whether to strike. If Boeing’s bid is rejected and two-thirds support the work stoppage, workers will leave the job at 12:01 a.m. Friday.
“Because they haven’t had contract negotiations since 2008, expectations would be high,” said Leon Grunberg, a longtime labor relations observer at Boeing and professor emeritus of sociology at the University of Puget Sound. “But Boeing is in such a vulnerable position right now that this is probably as generous as they can be.”
From Northern California to Idaho, preparations for strikes are underway, with IAM members making “fire barrel” signs to heat picket lines. In online forums, hundreds of employees expressed their anger, often in harsh terms, about a deal they say doesn’t do enough to improve their financial position.
Leaflets distributed Monday at Boeing’s Everett plant urged workers to reject the “Boeing’s Bad Deal” and authorize a strike during Thursday’s vote. It demanded that the union fight for a 40% pay increase, seats on the board of directors and pensions.
“Stand strong,” read a pamphlet seen by Bloomberg. “We deserve a fair deal.”
Holden acknowledged that the union got a lot, but not everything it asked for in negotiating the first comprehensive deal in sixteen years. But he said he ultimately decided to recommend members accept Boeing’s offer because he cannot guarantee a strike would lead to a better deal.
“It’s irresponsible to ask people to strike for something I’m not sure we can achieve,” Holden said. “You have to think of the weight of 33,000 families.”
Ortberg’s role
Ortberg, who took over as Boeing CEO in early August, has vowed to return the focus to the aircraft maker’s manufacturing roots after a mid-air explosion of one of its planes early this year put a spotlight on its production and safety performance . The new chief had largely stayed out of contract talks, which started in early March and intensified last month as the two sides holed up in a Seattle hotel.
But he stopped by Saturday for a brief meeting during which he addressed “job security,” a contentious issue where union leaders are urging Boeing to commit to building its next new plane in the Puget Sound region.
“He did make a commitment about job security,” Holden said. “Then we have work to do to make it worth something.”
Datasheet: Get the technology sector download with thoughtful analysis from the biggest names in the industry. Sign up.
CIO intelligence: Stay up to date on the news and issues shaping the role of the CIO every week. Sign up.
Eye on AI: Discover how artificial intelligence and machine learning are revolutionizing the future of business. Register.
