EVERETT—With a vote of 94.6%, the International Association of Machinists (IAM) 751 and W24 union members rejected the latest Collective Bargaining Agreement with Boeing on Thursday night and agreed to strike with a vote of 96%. A minimum two-thirds vote is required to authorize the strike. The strike begins at 12:01 a.m., Friday, September 13.

“This will be an unfair labor practice strike as there were many violations of the law,” IAM Union 751 President Jon Holden announced around 9:30 p.m. on Thursday night. “We had discriminatory conduct, we had coercive questioning, we had unlawful surveillance, and we had unlawful promise of benefits.”

IAM union members which encompasses approximately 33,000 Boeing employees on the 737 MAX, 767 Cargo, 777, and 777X are now headed to the picket lines to strike for higher wages—a move that could prove disastrous for the aerospace giant’s manufacturing goals amidst its years of financial struggles while putting in question its ability to fulfill its recent Safety and Quality Plan with the FAA following the non-fatal Alaska Airlines Flight 1282 incident.

“Washington’s machinists are among the most-skilled in the world, and their knowledge and expertise is why Boeing is globally recognized as a world-class company,” Governor Jay Inslee posted on X. “We all hope that the machinists and Boeing come to an agreement as soon as possible.

Striking employees are generally not eligible for unemployment benefits in Washington, Oregon or California, and will not receive any pay from Boeing. Striking employees will not be allowed to charge vacation time nor sick leave during the strike. If a new contract is not put in place by the end of September, company-paid health care benefits will end for striking employees and their covered family members effective September 30, 2024.

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” a Boeing spokesperson provided to the Lynnwood Times. “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.”

Throughout negotiations the key demand for the union was 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.

This was the first full negotiation between Boeing and IAM 751 and W24 in 16 years. After ratification of a new contract in 2008, employees approved two contract extensions in 2011 and 2014. The current 8-year extension began in 2016.

“[T]he fact is that our requests are perfectly reasonable given current inflation numbers, and that the cost of living here is 54% above the national average,” said Jack Longren, Boeing employee.  “It also strains credulity, the claims to poverty that the company issues forth, when failed CEO after failed CEO leaves their position with tens of millions of dollars in compensation. Here’s a tip – put that money into your workers that will eagerly deliver a quality product instead of non-value added parasites that use the company like an ATM.”

On Sunday, September 8, IAM and Boeing reached a tentative agreement for a 25% wage increase – the largest ever wage increase for Boeing production workers in Washington and Oregon.

That tentative agreement also included:

• A $3,000 lump sum payment within 30 days if the bargaining agreement is ratified by 11:59 p.m. on September 12, 2024, with the ability to defer all or part to your Boeing 401(k).
• New Boeing contribution of up to $4,160 per employee per year to the union’s 401(k) plan.
• Paid parental leave would begin Jan. 1, 2025. At that time, you can also use this benefit if you welcomed a new child between Sept. 13 and Dec. 31, 2024.
• A lower cost share for health care, plus plan improvements such as a new free primary care benefit and a new company-paid long-term disability plan.
• Effective January 1, 2025, and each January 1 thereafter, employees would receive one annual floating holiday to be used in a full day increment. Employees can use it on a holiday or any other day they choose with advance scheduling. It must be used before the end of each year.

To leverage job security for tens of thousands of Boeing production workers, Boeing also committed to building its next new commercial airplane in Puget Sound, only if the bargaining agreement was ratified by 11:59 p.m. on Thursday, September 12, 2024, according to the agreement.

Still, many Boeing employees seemed dissatisfied with the deal taking to the Lynnwood Times website to leave their thoughts, with many of them echoing concerns that Boeing, in this deal, would be taking away just as much as it would be giving; including granting cheaper medical while adding additional costs, and still not meeting the wage increases needed to keep up with inflation and rising costs of living.

A major criticism of the new offer stems from the removal of the Aerospace Machinists Performance Program (AMPP), also known as the “Boeing annual bonus” to production workers which equates to thousands of dollars per employee.

“The so called 25% bonus is dulled out slowly over 4 years and the employees still won’t be making enough to match where the economy is now. The yearly bonus is taken away. The sick leave has new rules that make it harder to use. They boast about added holiday leave, 1 day big whoop. The Healthcare isn’t much cheaper, and they raised the premium the employees are responsible for. They didn’t promise they would build the other plane here they said they would “IF” they could. This pay raise isn’t anywhere near 25% if you include losing the bonus. They did creative math and just moved the money around…. I hope everyone sees through the BS that boing is trying to serve. The union is doing the employees dirty and should be held accountable,” a user who gave their name as VOTE YES TO STRIKE commented.

Peter Johnson, Vice President of Fabrication stated that the AMPP was replaced with the new Boeing contribution of up to $4,160 per employee per year to the union’s 401(k) plan.

“We decided it was better to roll that budget…into guaranteed money in the 401(k) option that has gone forward with IAM,” Johnson said. “So that $4,160 that is being put into the IAM 401(k), which is guaranteed money, it’s not at risk anymore and will compound over people’s lives.”

In an email from Boeing President and CEO Kelly Ortberg sent to all employees in Washington and Oregon on Wednesday, September 11, he asked union workers to not “sacrifice the opportunity to secure our future together, because of the frustrations of the past.”

He added, “… a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.”

Ortberg encouraged employees to “choose a future where our company is strong and where we win by working together.”

Representative Suzan DelBene (WA-01) shared in an X post that she is a “strong proponent” of the collective bargaining process and hopes both sides will reach a “more acceptable contract.”

“It’s my hope that union leadership and Boeing will be able to address members’ concerns and reach a stronger, more acceptable contract offer that all parties can support,” Delbene wrote.

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’s 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 of the 787 Dreamliner production to South Carolina. “Today’s announcement is an insult to the hardworking aerospace employees who build 787s.”

Economic Impact of the strike

Aerospace is a $71 billion industry in Washington state supporting some 194,000 jobs according to a 2024 report by the Seattle Metropolitan Chamber of Commerce and delivered $19.4 billion in labor income to Washington employees in 2023. In 2022, Boeing paid more than $200 million in taxes to Washington state.

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.

In 2020 when Boeing halted its production of the 737 MAX, economists estimated a 0.5- to 0.6-percent drop in GDP growth for the entire U.S. There is no doubt that today’s strike will impact hundreds of local suppliers, vendors, restaurants, charities, retailers and other businesses not only in Snohomish County but throughout the region. In the Lynnwood-Everett region alone, aerospace workers spent nearly $36.5 million on automobile purchases in 2023.

Boeing is the nation’s largest exporter and has a global workforce of 170,000 with approximately 66,000 employed in Washington state—there is a total of 77,000 aerospace workers in the state. It has contracts with at least 12,000 suppliers around the world of which over 1,000 are in Washington state.

According to the Seattle Metropolitan Chamber of Commerce’s report, in 2023, Boeing supported 82% of industrywide business revenues, 80% of total jobs, and 77% of total labor income generated by the aerospace industry.

With S&P Global and Moody’s lowering the aircraft manufacturer’s creditworthiness in April, the FAA capping 737 Max production to 38 planes per month, delays in 777X production, and setbacks meeting mandated international “greener” emission standards for its 767 aircrafts, the company may soon face a cash crunch as it burns through billions of dollars more than projected.

Boeing stock has taken a 6.3% 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.

Snohomish County Executive Dave Somers released the following statement regarding the strike:

“Boeing is a bedrock of Snohomish County, not only as a major jobs creator but also as a strong community partner. Together, the contributions of The Boeing Company and our 17,000 neighbors with IAM 751 positively impact our communities in countless ways every day. We are all in this together – what is good for Boeing and its workers is good for all of us.

“Any strike would be hard on workers, families, the company, our communities, and our region’s economy. As I’ve said from the beginning, we want and need a Boeing Company focused on what they have historically done better than anyone: produce the greatest airplanes ever created through the brilliant design, unmatched engineering, and full dedication of world-class manufacturing workers.”

Congressman Rick Larsen (WA-02) echoed similar remarks: “You can’t walk around Snohomish, Skagit or Island counties without meeting someone who works at Boeing. These proud union members are an integral part of our community. Their commitment to building the best airplanes in the world is only matched by the contributions they make to the towns in which they live. This workforce and its deep commitment to our region represent the best of us here in Northwest Washington. 

Larsen continued, “These are the reasons why it is so important for everyone to listen to their voices in light of the recent contract votes. The IAM 751 union members’ rejection of the latest contract offer reflects both long simmering tensions and the real desire for recognition that workers have carried Boeing on their backs during the last several years of missteps and failures.

“The strength of our local communities, our local economy, the union and Boeing depend on a fair contract.”

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 in June of 2024 found that Boeing planes are still relatively safe to travel when compared to its European Union competitor, Airbus.

Members of the IAM 751 union are set to begin their strike tomorrow, Friday, September 13.

EDITOR’S NOTE:

• Article updated 12:34 p.m., September 13, 2024, with a statement from Representative Rick Larsen (WA-02).
• Article updated 9:19 a.m., September 13, 2024, with a statement from Representative Suzan DelBene (WA-01).
• Article updated 9:19 a.m., September 13, 2024, with a statement from Boeing.
• Article updated 10:18 p.m., September 12, 2024, with a statement from Governor Jay Inslee.