Boeing faces strike threat as union members vote on tentative labor deal today
New York
CNN
—
Little has gone right for Boeing over the last five years. By this time tomorrow, the troubled company could add another mess to its growing list of problems: A massive strike by 33,000 of its workers that could stop airplane production at America's largest exporter and deal a blow to the US economy.
Boeing faces a crucial union vote tonight that could send workers walking off the job at a parts center in Oregon and two airplane factories and a fabricating plant in the Seattle area. The strike may take place even though the workers' union and the company have reached a tentative agreement on a four-year contract to avoid a walk-out.
Among other benefits increases, the contract would increase union members' pay by last least 25% over four years. Union leadership, in announcing the tentative agreement Sunday, called it "the best contract we've negotiated in our history." But workers are angry: They feel they were pressured to agree to two deals years ago that stripped them of their traditional pension plans and made them pay more for health insurance.
The union agreed to those unpopular deals in past years, when Boeing was reporting strong profits. The union agreed to concessions at the time because it was concerned Boeing would shift union jobs to nonunion plants that the company was threatening to build.
Worker anger has also built up from years of problems that have been variously tragic, embarrassing and financially devastating for Boeing. Those problems include two fatal crashes that killed 346 people, a 20-month grounding of its best-selling jet, and a door plug blowing off an Alaska Airlines flight this past January because the plane left a factory without the four bolts needed to hold it in place. Boeing earlier this year pleaded guilty to criminal charges that it deceived regulators. Since last reporting a profit in 2018, Boeing has piled up more than $33 billion in core operating losses, and its credit rating has fallen near "junk" status.
Union members have launched a series of protests this week outside of Boeing plants and may ultimately reject the new contract union leaders negotiated with Boeing management. If they reject the deal, they could vote to go on strike early Friday.
A strike would not affect consumer travel. Boeing planes already delivered to airlines and in use around the world, will continue to fly. But it would cause a delay in deliveries of jets promised to airlines, cutting off Boeing's primary source of cash.
Depending on the length of the strike, it could also cause problems for nearly 10,000 Boeing suppliers, who can be found in all 50 US states. Beyond the 33,000 union members out of the nearly 150,000 US employees, the company estimates its own annual contribution to America's economy to be $79 billion, supporting 1.6 million jobs directly and indirectly.
Predictions of a ‘no' vote on the deal
Even if the voters don't ratify the new contract, a strike would not be guaranteed. It would take a supermajority of two thirds of members voting to go on strike before a walk-out could begin. Short of that, the contract would go into effect, even if a majority of members oppose it.
Boeing describes the deal with the International Association of Machinists (IAM) as the most lucrative it has ever reached with the union. CEO Kelly Ortberg, who has been on the job for only a month, has promised to "reset our relationship" with the union.
Jon Holden, president of the IAM local who led the negotiations and endorses the deal, is now predicting membership will reject the contract and authorize a strike.
"The response from people is it's not good enough. Right now, I think it will be voted down, and our members will vote to strike," Holden told The Seattle Times in an interview, which the union confirmed to CNN.
Ortberg issued a statement to union members Wednesday evening asking for their support, but conceded rank and file hold a lot of anger toward the company.
"I know the reaction to our tentative agreement with the IAM has been passionate," he said. "I understand and respect that passion, but I ask you not to sacrifice the opportunity to secure our future together, because of the frustrations of the past."
If they vote to strike, it would begin at 11:59 p.m. PT Thursday, or 2:59 a.m. ET on Friday. Voting continues until 6 p.m. PT Thursday, and the results of the vote should be known soon after that.
Holden, while saying the union will support members if they vote to go on strike, told members in a message Tuesday that the union leadership recommends workers approve the deal because it is the best that it could negotiate without a strike.
"We recommended acceptance because we can't guarantee we can achieve more in a strike," he said in that message. "But that is your decision to make and is a decision that we will protect and support, no matter what. We have secured all that we could in bargaining short of a strike. The membership must take it from here."
A ‘no' vote on deal might not mean a strike
But the depth of rank-and-file anger at Boeing, combined with unusual union rules, will determine if workers go on strike.
Those rules call for members to cast two different votes on Thursday. One vote is whether or not to ratify the deal. The other is whether or not to authorize a strike.
The deal will be officially approved if more than 50% of the members vote in favor of the tentative agreement. That would prevent a strike, no matter how many workers vote to strike. But even if a majority vote "no" on the contract, workers will not strike unless at least two-thirds of members have also voted to strike. If just more than a third of members vote against a strike, then the contract takes effect, no matter the results of the ratification vote.
That is what happened in 2002, when 62% voted against ratifying a deal, but only 61% voted to strike. That was the last time such a split vote resulted in ratification of a deal at Boeing. The last time the Machinists went on strike was in 2008.
What's in the deal
The deal reached Sunday would provide workers with raises of at least 25% over the four-year life of the deal, cost-of-living adjustments that could raise wages even more, reduced out-of-pocket costs for health care coverage, and improved company contributions to retirement accounts.
It also includes a promise from the company that the next commercial jet will be built at a unionized factory in Washington state.
The company had threatened to move production over the years to a non-union plant. Boeing completed its first non-union plant in 2009, just a year after the 2008 strike, and builds the 787 Dreamliner there to this day. It stopped building the Dreamliner at a unionized plant in Washington in 2021.
