December 11, 2024 4:55 am

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Boeing now faces worker strike amidst slew of manufacturing issues

EVERETT—Boeing’s largest labor union, International Association of Machinists (IAM), is threatening to strike on September 13 after neither the union nor the aerospace manufacturing giant have seemed to meet eye-to-eye throughout negotiations for higher wages that began last March.

boeing strike
View of Boeing Everett factory from Airport Road. Lynnwood Times | Mario Lotmore.

IAM represents more than 30,000 Boeing employees which, if a strike were to occur, could have dire consequences for the company’s goals of producing 38 737 aircrafts a month by the end of the year, following financial difficulties, safety and quality concerns, and stricter FAA requirements.

The key demands of the union are for a 40% increase in wages over a three-year period, modifications to retirement contributions and healthcare plans, and a guarantee to keep production in the Pacific Northwest. Most of the employees represented by IAM live in the Greater Seattle Area.

Demands to keep the upcoming 787 Dreamliner program in Washington were part of IAM’s last strike against Boeing in 2008 where, after 57 days, the union and manufacturer agreed upon increased wages of 15% plus a renegotiated bonus structure.

Boeing announcement on October 1, 2020, to relocate the 787 Dreamliner program to South Carolina in 2021 was met with criticism: “Boeing’s success as a company is a credit to the workers and taxpayers of Washington state,” Governor Jay Inslee released in a statement on the Boeing Company’s decision to move all 787 Dreamliner production to South Carolina. “Today’s announcement is an insult to the hardworking aerospace employees who build 787s.”

The 2008 strike resulted in a loss of about $2.5 billion which, adjusted for inflation, would equal about $3 billion today. Since 2019 Boeing has lost about $32 billion, made worse by its 5,600 backlog of commercial jet orders valued at approximately $529 billion.

boeing stock
Boeing stock performance.

Boeing stock has taken a 6.2% hit since Tuesday, September 3, after Wells Fargo analyst Matthew Akers downgraded the company’s stock valuation stating a problem with free cash flow.

“Boeing carries about $45 billion net debt and (it) must address this before it kicks off the next aircraft development cycle,” Akers said, adding that cutting the debt would consume its cash flow through 2030, Reuters reports.

Boeing is producing commercial aircraft at about a quarter of the rate it was before 2020, when it reported its worst performance in three decades. So far, in 2024, productions rates were still down in the first two fiscal quarters, but production of the 737 MAX began to improve back in July.

Boeing’s reduction in commercial aircraft production is largely due to a quality and safety emphasis in the wake of FAA and shareholder scrutiny. Back in May the FAA slowed down deliveries of the 787 Dreamliner due to quality concerns after a mid-flight technical issue resulted in the injury of 50 passengers, and the 737 MAX 9’s were ordered to be temporarily grounded after a 60-pound door plug tore off of a plane mid-flight.

The action by the FAA was reminiscent of the March 2019 grounding of all Boeing 737-MAX aircraft shortly after Ethiopian Airlines Flight 302, a 737-MAX 8 aircraft, crashed six minutes after takeoff from Addis Adaba killing all 157 people aboard. Just months earlier, on October 29, 2018, Lion Air Flight 610 crashed into the Java Sea 12 minutes after takeoff, killing all 189 passengers and crew. Both 737-MAX 8 aircraft, and the Boeing 737 Max 9, were only a few months old at the time of their incidents.

Despite these incidents, a Lynnwood Times study of the National Transportation Safety Board (NTSB) incident records from 2014 through 2023 conducted last June found that Boeing planes are still relatively safe to travel when compared to its European Union competitor, Airbus.

boeing strike
Demolition for IAM’s new multimillion dollar Everett Hall located across the street from Boeing Everett, broke ground on February 26, 2024. The new hall and educational facility, when completed, will be approximately 23,000 square feet.

IAM’s existing contract with Boeing expires at midnight on September 12 and Local 751 President Jon Holdon said that strike could be imminent the very next day unless the union and Boeing come to an agreement. IAM’s Local 751 represents workers in two of Boeing’s largest manufacturing plants, one in Renton— home of the 737 MAX program—and the other in Everett—home to the 747, 767, 777, and 787 program.

IAM unionhall
Rendering of IAM’s upcoming Everett Hall by Urbal Architecture. The facility will house a new union hall, administrative offices, and a machinist institute educational facility.
Kienan Briscoe
Author: Kienan Briscoe

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