SEATTLE—International Association of Machinists 751 & W24 union members voted, 59 percent, on Monday, November 4, to accept the latest October 31 contract offer from Boeing—the strike has ended.
“This is time for us to come together, this is a victory,” International Association of Machinists 751 President Jon Holden said to cheers and a few boos from the crowd after announcing the results. “We can hold our head high and we all stood strong, and we achieved something that we hadn’t achieved in the last 22 years. I am proud of this membership; you can be proud of yourselves as well. You stood strong and you stood tall, and you won. This is a victory.”
IAM workers can return to work as early as the first shift on Wednesday, November 6, and must return no later than their beginning shift on Tuesday, November 12.
“Tonight’s vote by the Machinists puts Boeing’s future back on more solid footing,” Governor Jay Inslee released in a statement following the approval of the new contract. “Washington is home to the world’s most skilled aerospace workers and they understandably took a stand for the respect and compensation they deserve. Congratulations to IAM District 751 and Boeing on reaching an agreement.”
With the assistance of Secretary of Labor Julie Su, IAM 751 & W24 leadership notified its 33,000 members on Halloween of the updated contract offer by Boeing with hopes to ending the 53-day strike that has cost the company billions of dollars in lost revenue and hundreds of millions in loss income for workers.
In a message to all employees Monday evening following the ratification vote, Boeing CEO Kelly Ortberg shared that he is “pleased to reach a ratified agreement.”
“While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company,” Ortberg wrote.
Union leadership endorsed the latest contract stating in an X post, “It is time for our members to lock in these gains and confidently declare victory. We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.”
The now accepted contract offer, has reduced designated overtime, improved short-term disability insurance, added paid parental leave, added eligibility for retirees for a post-65 Medicare Advantage plan, improved the 401k match, COLA will now also apply to minimum rates in the wage scale, and secured a guaranteed 4% payout for the AMPP, Holden stated in a communique to union members.
The average annual machinist pay at the end of this 4-year contract will be $119,309. This is an increase of about $43,700 from the previous contract’s $75,608 average. Below is a summary of key provisions in Monday’s approved contract:
- 38% General Wage Increase (up from 35% in 10/19 offer). This is an effective 43.65% wage increase.
- Year 1: 13%, Year 2: 9%, Year 3: 9%, Year 4: 7%
- $12,000 ratification bonus (up from $7,000 in 10/19 offer)
- Boeing 401(k) match increased to 100% of first 8% of pay, plus automatic 4% company contribution (80% of our employees max out their 401(k) contributions).
All other terms stay the same as previous offers, including:
- Commitment to build Boeing’s next new airplane in the Puget Sound region.
- Annual bonus with 4% guaranteed annual payout, up to 6%.
- Retirement benefits also include:
- New 401(k) annuity option for guaranteed monthly retirement disbursement; Boeing pays the transaction fee.
- For employees with a Boeing pension (hired before Jan. 2014), offer increases pension multiplier from $95 per year of service to $105.
- For health care, 2025 paycheck contributions will be lower than 2024.
The accepted contract is a much better deal than the original September 8 offer that was rejected on September 12 with a vote of 94.6% by IAM members who also agreed to strike beginning the following day with a vote. Union members overwhelmingly voted, 64 percent, on Wednesday, October 23, to reject Boeing’s previous October 19 contract offer.
Boeing withdrew on October 8 its “best and final” offer proposed to IAM 751 & W24 union members on September 23, which left striking workers and an industry anxiously awaiting next steps. This offer was not brough forward to members for a vote.
IAM leadership has been demanding for Boeing to reinstate the company’s defined-benefit pension program, which members voted in January of 2014 to replace with Boeing’s 401(k) plan. Just three months later, Boeing announced that it will be cancelling its pension for a new defined-contribution 401(k) plan for all nonunion employees starting January 2016 in an effort to improve cashflows and its long-term financial health, a strategy.
Boeing argued that reinstating the company’s defined-benefit pension program was not financially feasible. If Boeing were to reinstate the pension for IAM, this would no doubt be a demand by SPEEA, a union representing 19,000 Boeing technical and professional engineers, in 2026.
“They’re prohibitively expensive, and that’s why virtually all private employers have transitioned away from them,” Boeing released in a statement in September referring to defined-benefit pension plans.
Beginning October 1, all 33,000 striking workers lost their Boeing-sponsored health care benefits and the company in mid-September began furloughing tens of thousands of additional employees—including executives and managers—effectively reducing their take home pay by 25%. Boeing also instituted a hiring freeze and paused all pay increases for its salaried workforce.
Allegations of bad faith bargaining, misrepresentation of union leaders
The Boeing Company on October 10, filed an unfair labor practice charge with the National Labor Relations Board (NLRB) against the IAM, specifically against 751 president Jon Holden and W24 president Brandon Bryant alleging “bad faith bargaining.” The charge was related to activities in Seattle, Everett, Renton, Auburn, Fredrickson, Moses Lake, and Portland.
Boeing alleged that the IAM union “violated its duty to bargain in good faith by engaging in regressive bargaining, surface bargaining, misrepresenting deal terms and negotiation status to its members and the public and failing to bring representatives to the bargaining table with the authority to reach an agreement.”
Boeing also alleged that union leadership is engaged in an active misinformation campaign “aimed at obscuring its [IAM’s] own pattern of bad faith bargaining” filing documents obtained by the Lynnwood Times revealed. It asserted that the actions contributed to a strike that caused “substantial harm to the Company and its employees, suppliers, communities, and customers around the globe.”
The aerospace company in its complaint further alleged that union leadership violated its own Constitution by refusing to allow its members to vote on the September 23 proposed contract.
Boeing’s Economic Importance to Washington State
Aerospace is a multi-billion-dollar industry 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 Washington’s $71 billion aerospace industry.
Earlier this year, the S&P Global and Moody’s lowered the aircraft manufacturer’s creditworthiness in April to BBB- (the firm’s lowest grade), the FAA capped 737 Max production to 38 planes per month following the Alaska air incident in January, plagued by delays of its 777X production, and setbacks meeting mandated international “greener” emission standards for its 767 aircrafts, resulted in the company burning through billions of dollars well before September’s strike.
Boeing hasn’t reported a full-year profit since 2018, a year before two crashes of the 737 MAX jet that led to the grounding of the plane worldwide. Its stock has taken a 12.3% hit since September 3 (Fri, Aug 30: 173.74, Oct 15: 152.35), after Wells Fargo analyst Matthew Akers downgraded the company’s stock valuation stating a problem with free cash flow.
At its third-quarter 2024 earnings briefing on October 23, Boeing President and CEO Kelly Ortberg shared the grim reality of the company’s financial challenges ahead. Third quarter results reflect impacts of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced pre-tax charges on commercial and defense programs due to delays.
Revenues for the quarter were $17.8 billion, down $300 million from the previous year. So far for the year, Boeing has reported a total of $51.3 billion in revenues, down from $55.8 billion in third quarter 2023. For the year, the company is reporting a Net Loss of $8 billion with $6.174 billion in the third quarter alone.
In addition, its Free Cash Flow is reported at negative $2 billion this quarter conveying a risk to investors for Boeing to repay creditors and/or pay dividends. Boeing is reporting total Consolidated Debt at $57.7 billion, relatively unchanged from the previous quarter. Its credit rating is near junk with S&P reporting BBB-, Moody’s at Baa3 and Fitch at BBB-.
On a positive note, Boeing raised $24.3 billion, far exceeding expectations of $20.72 billion, from its stock offering earlier last week, hinting at investor faith in the Boeing brand.
To commence President and CEO Kelly Ortberg’s goal to “stabilize the business” from his four-point plan, Boeing offered 112.5 million shares of common stock and $5 billion of depository shares on Oct 28. Boeing then granted a 30-day option to purchase up to an additional (i) 16.875 million shares of Common Stock and (ii) $750 million of Depositary Shares.
Prior to the previous offer’s vote on October 22, three of the highest-ranking congressional leaders—U.S. Senator Maria Cantwell (D-WA), chair of the Senate Committee on Commerce, Science, and Transportation, Representatives Adam Smith (D, WA-09), ranking member of the House Armed Services Committee, and Rick Larsen (D, WA-02), ranking member of the House Transportation & Infrastructure Committee—along with president pro tempore of the United States Senate and chair of the Senate Appropriations Committee, Senator Patty Murray (D), in a letter sent on Tuesday, October 15, to Boeing and the IAM machinists union leadership, called for a mutually beneficial resolution to the month long strike.
Thirty members of the Congressional Progressive Caucus, led by Jayapal, called on Boeing and union negotiating teams to “return to the bargaining table” a day before Boeing announced it will reduce its workforce by 10 percent—17,000 employees—due to the ongoing strike. The aerospace company, also on October 11, announced it will delay delivery of its 777X program by a year to 2026 and decommission the commercial program of its 767 freighter.
Article Updates:
- Added statement from Boeing CEO Kelly Ortberg at 930 p.m., November 4, 2024.
- Added statement from Governor Jay Inslee at 9:23 p.m., November 4, 2024.
Author: Mario Lotmore
