Boeing factory workers initiated a strike after midnight on Friday, halting production of the company’s bestselling airplanes. The strike came after 94.6% of workers rejected a new labor contract, prompting 96% to vote in favor of the work stoppage. The proposed contract, unveiled by Boeing and the International Association of Machinists and Aerospace Workers (IAM), included a 25% wage increase over four years, but workers demanded closer to 40% to meet the rising cost of living.
IAM District 751 President Jon Holden announced the strike, citing unfair labor practices such as discriminatory conduct and coercive questioning. He urged Boeing to return to the negotiating table in good faith. Boeing’s CFO Brian West acknowledged the disappointment in the contract’s rejection and warned that the strike could delay airplane deliveries and affect production, though he refrained from providing specific financial estimates.
Credit rating agencies Moody’s and Fitch raised concerns that a prolonged strike could lead to credit downgrades, resulting in a nearly 4% drop in Boeing’s shares on Friday. Analysts estimate that a 30-day strike could cost the company approximately $1.5 billion. Boeing had already burned through $8 billion this year due to production delays, supply chain issues, and mounting debt.
The tentative agreement would have been Boeing’s first fully negotiated contract with machinists in 16 years. Boeing CEO Kelly Ortberg, who has been in the role for just five weeks, had urged workers to accept the deal, emphasizing the company’s recovery and long-term growth. The deal included a promise to build the next commercial jet in Seattle, an attempt to win over workers after the company moved production of the 787 Dreamliner to a nonunion factory in South Carolina.
As production halts, airline customers like Southwest Airlines, which relies exclusively on Boeing planes, have adjusted their delivery expectations. Boeing is already under federal scrutiny after a door plug blowout on a 737 Max 9 earlier this year raised concerns about production quality. The Federal Aviation Administration (FAA) confirmed it will continue aggressive oversight of Boeing’s operations during the strike.
White House Press Secretary Karine Jean-Pierre stated that the Biden administration is encouraging both sides to negotiate in good faith to reach a fair agreement.
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