Boeing and the Machinists union have reached a tentative deal to avoid a strike that was set to occur on the West Coast. The agreement would provide a 25% raise over four years, improved contributions to 401(k) plans, reduced health insurance contributions, and increased time off for union members. The deal also includes increased job security with a promise to build the next new airplane at a union-represented plant in the Puget Sound region.
The contract covers production workers at three factories in the Seattle area and about 1,200 workers at a parts plant in Portland, Oregon. Union members will vote on the tentative agreement, with a rejection potentially leading to a strike. Boeing has faced setbacks in recent years, including the grounding of the 737 Max following fatal crashes, revenue decline during the pandemic, and quality and safety concerns.
Boeing’s financial woes have led to significant operating losses since the grounding of the 737 Max, with forecasts indicating continued losses through the end of the year. The company is at risk of having its debt downgraded to junk bond status due to increased borrowing to cover losses. This contrasts with other major companies that reached lucrative union deals last year, as those companies reported record earnings prior to negotiations.
Union leadership had leverage in negotiations due to Boeing’s financial difficulties, with the goal of achieving the best contract possible for its members. Former CEO Dave Calhoun acknowledged the union’s leverage and expressed a desire to avoid a strike, stating that the company was willing to treat its employees well in the process. Newly appointed CEO Kelly Ortberg aims to reset relations with the union after taking over the position in August.
Ultimately, the tentative agreement between Boeing and the Machinists union represents a significant victory for union members, with increased pay and benefits, job security, and improved working conditions. The deal has the potential to avert a strike and provide stability for both the company and its employees moving forward.
