Boeing strike to continue after workers reject new contract

(SEATTLE) — Boeing machinists on Wednesday rejected a new contract proposal that would’ve ended a weekslong work stoppage against the embattled aerospace company — and the union said the strike will go on.

Sixty-four percent of workers voted to reject the new contract, according to the International Association of Machinists and Aerospace Workers (IAM), the union representing 33,000 Boeing workers in Washington, Oregon and California.

Representatives for Boeing said Wednesday night the company did not have a comment on the vote.

The proposed contract would have delivered a 35% raise over the four-year duration of the contract, upping the 25% cumulative raise provided in a previous offer overwhelmingly rejected by workers in a vote last month. Workers had initially sought a 40% cumulative pay increase.

The proposal also called for hiking Boeing’s contribution to a 401(k) plan, but it declined to fulfill workers’ call for a reinstatement of the company’s defined pension. The contract would have included a $7,000 ratification bonus for each worker, as well as a performance bonus that Boeing had sought to jettison.

But union leaders said the concessions offered in the proposal were not enough to meet the demands of rank-and-file union members.

“This contract struggle began over ten years ago when the company overreached and created a wound that may never heal for many members,” said Jon Holden, president of IAM District 751 in Seattle, in a statement after the vote. “I don’t have to tell you all how challenging it has been for our membership through the pandemic, the crashes, massive inflation, and the need to address the losses stemming from the 2014 contract.”

The union said the strike will continue as they return to the bargaining table with the company.

Hours before workers cast ballots on Wednesday, Boeing released an earnings report showing the company had lost a staggering $6.1 billion over the most recent quarter due primarily to costs associated with the strike.

“We have some really big rocks that we need to get behind us to move the company forward,” Boeing CEO Kelly Ortberg said in a letter to investors on Wednesday.

Ortberg singled out the strike as an issue that must be addressed “first and foremost.”

“We have been feverishly working to find a solution that works for the company and meets our employees’ needs,” Ortberg said.

The company and its workers have faced significant financial losses during the nearly six-week strike.

Union members have received $250 per week from a strike fund, beginning in the third week of the work stoppage. That compensation marks a major pay cut for many of the employees.

Mid-ranking workers involved in the strike typically make $20 per hour, which totals $800 per 40-hour work week, while higher-paid members earn salaries upward of $100,000 per year, or nearly $2,000 per week.

“The question is whether the employees and their union determine that they have the power to get more from Boeing,” Henry Harteveldt, a travel industry analyst at Atmosphere Research Group, told ABC News. “It’s whether they think they can extract more from Boeing, or Boeing says, ‘You know what, this is it.'”

The strike was set to cost Boeing $108 million per day in lost revenue, amounting to as much as $5.5 billion in losses should the work stoppage last 50 days, investment bank TD Cowen said in a report reviewed by ABC News at the outset of the dispute. So far, the strike has lasted 40 days.

In September, Boeing announced furloughs and pay cuts for some white-collar employees in response to the strike. Last week, Boeing CEO Kelly Ortberg announced plans to cut 17,000 jobs, which amounts to about 10% of its global workforce.

“This is really painful for Boeing,” Richard Aboulafia, managing director of aerospace consulting firm AeroDynamic Advisory, told ABC News.

The most recent IAM strike against Boeing in the Pacific Northwest, in 2008, lasted 57 days. Work stoppages undertaken by unionized Boeing employees in the same region have historically lasted an average of 60 days, a Bank of America Global Research analysis found after examining seven previous strikes, the earliest in 1948.

In the days leading up to Wednesday’s vote, the outcome remained unclear, Jake Rosenfeld, a professor of sociology at Washington University in St. Louis, who studies labor, told ABC News.

“What are the workers going to do?” Rosenfeld said. “That’s a really tough question.”

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