Boeing is in a really rough spot at the moment on several levels. Perhaps the most immediate challenge is that the company’s machinists have been on strike since September 13, 2024.
They deserve pay increases as they’re overdue for a new contract. The issue is, management and the union can’t agree on how rich a new contract should be. Before the machinists went on strike, the company offered a 25% pay increase, which wasn’t enough, and caused members to vote to go on strike.
Early on in the strike, Boeing presented workers with what it called its “best and final” offer, with pay raises of 30% over four years, plus some other improvements. That was also rejected. As it turns out, that wasn’t the best and final offer, and in recent days the two sides made some progress, especially after there was government intervention. Unfortunately it’s not enough, though.
In this post:
Boeing machinists reject latest contract offer
In recent days, we’ve seen Boeing up its offer to machinists, including 35% pay increases, a $7,000 ratification bonus, a better retirement plan, and more. Yesterday, workers voted on that contract, and it’s not good news for the company.
Boeing’s machinists, represented by the IAM Union District 751, have voted to reject the latest contract offer, with 64% of members voting against it. The primary point of disagreement seems to involve pension plans — union members want a defined benefit pension plan reintroduced, as that was taken away a decade ago. However, it’s something that Boeing hasn’t be willing to budge on.
Here’s what IAM District 751 President, Jon Holden, had to say about the results of the vote:
This contract struggle began over ten years ago when the company overreached and created a wound that may never heal for many members. 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.
We have prepared for years to bring this membership back to a position of power and leverage, and we are there tonight. These negotiations, this strike, today’s vote – it’s a culmination of everything for many people, filled with emotions.
We have made tremendous gains in this agreement in many areas our members said were important to them. However, we have not achieved enough to meet our members’ demands.
Today, Members have voted to reject the company’s latest offer by 64%.
Our members have stood together, united. Members may have different needs and demands, but you all stood together, fighting for each other. Senior members with decades of experience, new members with a few months, and members from different backgrounds all stood together to support each other. I’m proud of you and your strength.
This membership will continue to stand on the line, picketing for the contract they deserve. There is much more to do, and we will work to get back to the bargaining table. Our members’ voices will be heard. Thank you.
The machinists who are striking are the ones assembling the Boeing 737 MAX and the Boeing 777X, so this has impacts on Boeing’s customers. Meanwhile the Boeing 787 is assembled by different workers. Boeing estimates that it’s losing one billion dollars per month from the strike.
Boeing machinists last went on strike in 2008, and that lasted for around eight weeks, costing the company around $2 billion.
This situation at Boeing is bad all-around
I see why Boeing workers are standing firm on wage increases. They haven’t had a raise in a long time, their pensions were discontinued a decade ago, and there has been a huge increase in the cost of living across the country, and in particular, in the Pacific Northwest. They’re fighting for what I’d ultimately consider to be a fair contract.
The issue is, Boeing has had an absolutely awful several years, from the Boeing 737 MAX being grounded, to the Boeing 777X delivery delays, to all the production quality issues. As a company, Boeing has never been in a more challenging position, in terms of reputation, financials, etc.
So suffice it to say that this is tricky for Boeing. It’s the worst possible time for the company to be on the hook for huge pay increases, especially when the aircraft manufacturer has already given such big discounts to customers to sell planes.
At the same time, for how long are employees supposed to be patient while management figures out its mess? Ultimately Boeing is in the situation it’s in because it was for years run by people obsessed with the short term stock price, rather than being obsessed with producing quality aircraft.
Boeing only recently appointed Kelly Ortberg as the company’s new CEO. By most accounts, he seemed like a great candidate for the job. As you can tell, unfortunately his tenure isn’t off to a great start, though. I understand he needs to look out for the company’s bottom line, though I’ve also gotta say, starting your tenure with the biggest strike at the company in over 15 years isn’t exactly ideal.
Bottom line
Boeing’s machinists have been on strike for several weeks. In recent days it looked like the situation could finally be resolved, as there was a new tentative agreement. Unfortunately it was rejected by members of the union, with 64% voting against it.
Here’s to hoping that a new contract can be agreed on soon, so that Boeing can get back to focusing on building quality aircraft.
What do you make of the Boeing strike situation?
Same old story. The company makes big bucks, the chiefs bring in a big haul, so the line workers want a piece of that pie as well.
Its not just Boeing lines being stopped, but all the suppliers to them also stop, in Washington State as well as around the world.
Airlines will need to source planes elsewhere as well.
Boeing is big. So its a big dent in the economy.
Call Frank Lorenzo and offer him the job as chief negotiator. He’ll tell the union to accept the offer—or he’ll pull a Chapter 11 maneuver by sundown and wipe out their contracts. Problem solved, right?
Maybe if the union members installed ALL the bolts and management figured out building the best aircraft would yield the most profit we wouldn’t have a problem. Except the board incentivizes short term outcomes while new, quality aircraft take many years to produce. Short term incentives yield 777X delays. For those being paid millions per year you’d think they could connect the dots.
We get European governments to agree and produce A350’s!
Saying they "haven't gotten raises in a long time" is factually incorrect. Their contract, as it stands, not only has provided cost of living increases in the range of 5% to 1% since 2008, but also provides a step wage increase EVERY 6 MONTHS. In total, 30% pay increase since 2008 AND another 8-19% PER YEAR.
This is a union. I've worked in unionized and non-unionzed roles. Find me a non-union job that provides...
Saying they "haven't gotten raises in a long time" is factually incorrect. Their contract, as it stands, not only has provided cost of living increases in the range of 5% to 1% since 2008, but also provides a step wage increase EVERY 6 MONTHS. In total, 30% pay increase since 2008 AND another 8-19% PER YEAR.
This is a union. I've worked in unionized and non-unionzed roles. Find me a non-union job that provides a cost of living + merit raise to the tune of 9% per year on the LOW-end and I'll concede. Turning down a 35% raise is insanity and frankly, greedy.
They'll probably just push Boeing to close up shop and move elsewhere. Good luck finding any similar job handing out those kind of raises and being without income for a period of time.
I understand the union's desire to get what they can for its members, but I suspect that turning down the most recent 35% offer will bring considerable future risk. The union has the upper hand at present, and Boeing will likely have to up its offer in order to survive in the near term. However, the more painful the deal for Boeing, the more likely that they will move future production to states with a...
I understand the union's desire to get what they can for its members, but I suspect that turning down the most recent 35% offer will bring considerable future risk. The union has the upper hand at present, and Boeing will likely have to up its offer in order to survive in the near term. However, the more painful the deal for Boeing, the more likely that they will move future production to states with a lower cost of living and with fewer union protections. It would be very hard, if not impossible, to move the current 737 and 777 assembly lines out of state. However, as the company eventually (sigh) brings out new designs requiring new lines I suspect they will also opt for new plants in these alternate states.
What's up with OMAAT audience, one day they show an insane level of support to Milei (almost resembling that of Neo Nazis) and today they're supporting supposedly anti-capitalist unions.
They're not getting their own agenda? No wonder why is America dying.
You are comparing apples to oranges…
There’s nothing wrong with making decisions based on the issue at hand, rather than backing a position like pro-union regardless of how unreasonable union demands are.
This is a clear case where Boeing management made all the blunders, of which many are well publicized and many less so but still well known within the community. The machinists are asking for pay increases to keep up with inflation and benefits which they had a decade ago. That’s entirely reasonable.
"The machinists who are striking are the ones assembling the Boeing 737 MAX and the Boeing 777X"
In other potentially related news, the FAA is thinking of furloughing half their crash investigation team
(I jest)
The union feels like it has the upper hand and clearly does not seem to care about Boeing's troubles. They do so at great risk to the company and thus their own futures. It's time to put the past behind and look forward before China catches up. Heck, Embraer could build as good if not better aircraft than the 737.
Past management was awful and deserves a lot of blame. I just wish the union would give the new management a chance.
The union fools are just opening the door to chinas planes being adopted globally because they will actually be able to supply the demand while boeing are held up by their staff demanding more than 35% increase.
Despite what Tim Dumm says, this is very simple and it is not fighting for the 'last cent'. They want the pensions back. Give the pensions back that management stole, and everyone gets back to work.
See: Airbus Canada https://www.newswire.ca/news-releases/airbus-canada-reaches-an-agreement-with-its-unionized-a220-programme-employees-at-mirabel-844727105.html PENSION PLAN.
the vast majority of the private sector as well as a growing number of the public sector has moved away from defined benefit pension plans
there is a point at which union demands exceed what companies can financially do - and bankruptcy restructuring is a valid option
I know readers hate to agree with Tim, but he's right. Most companies have eliminated pensions and they're not coming back. Besides, many pensions were underfunded anyway.
With the huge losses and cash burn that Boeing is reporting, the timeline for getting this resolved to save the company is not long.
Let's not forget that their were airlines that flew Boeing's planes that had militant unions that fought for the last cent only to have that airline no longer operating not many years later.
After the crippling auto worker strikes not many moons ago, more than one auto industry CEO vowed...
With the huge losses and cash burn that Boeing is reporting, the timeline for getting this resolved to save the company is not long.
Let's not forget that their were airlines that flew Boeing's planes that had militant unions that fought for the last cent only to have that airline no longer operating not many years later.
After the crippling auto worker strikes not many moons ago, more than one auto industry CEO vowed to increase production of their products outside of the US.
I don't know the outcome for Boeing but unions that think they will secure long-term increases are fooling themselves. badly
and to think that some airlines built huge growth plans around Boeing airplanes which continue to fall apart because Boeing can't deliver them.
and, since, Delta was mentioned by someone else, yesterday was one of the rare days - perhaps the first - that Airbus did flight testing on specific aircraft from all 4 model lines that are destined for delivery to Delta the - the A220, A321NEO, A330NEO, and A350 families
Boeing is in a very hairy position but so are some airlines already and more and more will get there because of their belief that Boeing could deliver which is obviously being proven incorrect.
>After the crippling auto worker strikes not many moons ago, more than one auto industry CEO vowed to increase production of their products outside of the US.
There's a massive difference between building a car and building a plane. It's not hyperbole to say that building successful commercial aircraft is more difficult than sending people to space. The rocket only has to work once, the aircraft has to be both affordable and still work every...
>After the crippling auto worker strikes not many moons ago, more than one auto industry CEO vowed to increase production of their products outside of the US.
There's a massive difference between building a car and building a plane. It's not hyperbole to say that building successful commercial aircraft is more difficult than sending people to space. The rocket only has to work once, the aircraft has to be both affordable and still work every day for a couple decades. Chinese and Japanese companies for example, despite having highly skilled workers and high tech industry, still haven't been able to market a successful commercial passenger plane. With all the issues from Boeing's SC 787 plant, I can't imagine that Boeing would be successful in moving their manufacturing to Mexico or some other lower cost country.
nobody said there is no difference but if union members think they can hold Boeing hostage because aircraft manufacturing can't be outsourced, they will be in for a rude surprise.
And the creation of the 787 assembly line in South Carolina is evidence that Boeing can figure out how to accomplish its means just as auto makers have not closed every US plant.
And the biggest risk for Boeing is that it can no longer...
nobody said there is no difference but if union members think they can hold Boeing hostage because aircraft manufacturing can't be outsourced, they will be in for a rude surprise.
And the creation of the 787 assembly line in South Carolina is evidence that Boeing can figure out how to accomplish its means just as auto makers have not closed every US plant.
And the biggest risk for Boeing is that it can no longer financially keep limping along and decides to file for chapter 11 bankruptcy.
and, as much as everyone wants to argue about keeping government out of business, Boeing is far more consequential to the US economy than any airline or auto maker and, at some point, the government has to step in to save Boeing in some form.
none of which changes that some airline's futures are heavily tied to Boeing's ability to turn itself around which is becoming less and less likely any time soon
>if union members think they can hold Boeing hostage because aircraft manufacturing can't be outsourced, they will be in for a rude surprise.
I don't know, it seems like they have a very good idea of how much more they're worth to Boeing's bottom line than say, the C-Suite lol. This isn't the longshoreman's union where the members are just engaging in rent-seeking to keep busy-work jobs that could otherwise be automated, I don't know...
>if union members think they can hold Boeing hostage because aircraft manufacturing can't be outsourced, they will be in for a rude surprise.
I don't know, it seems like they have a very good idea of how much more they're worth to Boeing's bottom line than say, the C-Suite lol. This isn't the longshoreman's union where the members are just engaging in rent-seeking to keep busy-work jobs that could otherwise be automated, I don't know how you expect to build an aircraft without good machinists.
>And the creation of the 787 assembly line in South Carolina is evidence that Boeing can figure out how to accomplish its means
Except that whole part where every aircraft from that plant is suspect until proven otherwise because those lower paid and non-union workers were forgetting tools inside the aircraft skin, over-torqueing fasteners, you know all the little things that over tens of thousands of pressure cycles can cause an aircraft to fail if not caught. Airlines who get these planes then have their own added costs to inspect those aircraft to ensure they didn't fall prey to any of those defects. Remember, the JAL123 accident occurred 12k flights after the botched pressure bulkhead repair.
like the Boeing aircraft coming off of union assembly lines in Washington state have been flawless?
Boeing employees and sympathizers have a strong presence on the internet and you have just confirmed you are one of them
>like the Boeing aircraft coming off of union assembly lines in Washington state have been flawless?
If you mean the failed QC parts being re-used in aircraft, the whistleblower case confirmed that this issue had been raised multiple times to corporate and corporate wasn't interested in fixing it and went after those who did report these issues. That's not a union problem, that's a corporate problem. Maybe Boeing would actually turn around if HQ actually...
>like the Boeing aircraft coming off of union assembly lines in Washington state have been flawless?
If you mean the failed QC parts being re-used in aircraft, the whistleblower case confirmed that this issue had been raised multiple times to corporate and corporate wasn't interested in fixing it and went after those who did report these issues. That's not a union problem, that's a corporate problem. Maybe Boeing would actually turn around if HQ actually moved back to Everett and the C-suite made the effort to engage with the people building the product, but I won't hold my breath for that.
>Boeing employees and sympathizers have a strong presence on the internet and you have just confirmed you are one of them
If that's what you got from my posts, reading comprehension is not your strongsuit. I'm not a Boeing fanboy, and I hate what the company has turned into. I support organized labor and strong protections for workers, because without that corporations are free to undercompensate and mistreat their workers, to the detriment of both the company and society in the long term.
it is the responsibility of every company to not only vet its suppliers but also its product. While you would love to blame all of Boeing's QC problems on management, there is more than enough evidence that there were individual line workers that were doing incorrect things in multiple places at Boeing.
And when you are sympathetic to unions to the point of being able to see that there is at least shared responsibility...
it is the responsibility of every company to not only vet its suppliers but also its product. While you would love to blame all of Boeing's QC problems on management, there is more than enough evidence that there were individual line workers that were doing incorrect things in multiple places at Boeing.
And when you are sympathetic to unions to the point of being able to see that there is at least shared responsibility for what went wrong, then you are incapable of contributing meaningful solutions.
And the strike is not about the quality that didn't happen but about financial demands that the union is making and Boeing says it will not accommodate - restoration of a defined benefit pension plan.
Given that the vast majority of American workers do not have DB plans and Boeing is offering pay raises that are far in excess of what average Americans have received or will receive in the next years of the contract, the union's demand are not reasonable.
The vast majority of America does not care about Boeing. They are an indirect supplier to airlines which consumers do see. Boeing's problems are for themselves and the feds to figure out but no one should be surprised if Boeing looks more and more like Eastern Airlines
>While you would love to blame all of Boeing's QC problems on management, there is more than enough evidence that there were individual line workers that were doing incorrect things in multiple places at Boeing.
And Boeing management did not take action against those employees, instead it took action against the people reporting these issues.
>And when you are sympathetic to unions to the point of being able to see that there is at...
>While you would love to blame all of Boeing's QC problems on management, there is more than enough evidence that there were individual line workers that were doing incorrect things in multiple places at Boeing.
And Boeing management did not take action against those employees, instead it took action against the people reporting these issues.
>And when you are sympathetic to unions to the point of being able to see that there is at least shared responsibility for what went wrong
I never said the employees were blameless, but if management is unwilling to act against employees that are knowingly using bad parts, then that implies that management is more concerned about getting planes out the door to customers than with the actual build quality of the product. Management's actions speak volumes here.
>And the strike is not about the quality that didn't happen
You're getting lost. I know what the strike is about, my point about placating the machinist union is that building successful commercial aircraft is not something that just any workforce can do, as evidenced by the failures of multiple other countries with strong aerospace industries to do so. You can't outsource this like you can cars manufacture, the SC 787 plant is a clear indication that it results in worse quality and slower production. To that point, the union has management by the balls and assuming that Boeing truly can't offer a pension (see the Airbus example above as a counterpoint) then they need to find some other way to reach an agreement with the union.
we will all get to watch what happens.
The chances that the current number of Boeing mechanics is maintained for 4 years and receive the raises they want plus restoration of the pension is precisely ZERO
"their pensions were discontinued a decade ago" No, the defined-benefit pensions went away. The have a defined-contribution plan. DB plans should never exist. There are too many unknowns that can leave workers with reduced benefits in the future. Then, we, the taxpayer, get stuck. I do not like government interference with business in general. I would like DB plans to be phased out, and no new ones allowed.
... "No, the defined-benefit pensions went away".... yeah, that's literally what was said.
Defined benefit contribution plans are not pensions, so Ben was accurate in his statement.
Whether you think pensions are bad... that's a seperate topic.
*my faux pas... shouldn't say "defined benefit contribution plans" just "defined contribution plans".
Money management classes need to be a requirement to graduate from high school.
401k need to go away also. It is up to a individual to plan for retirement not the company or the government.
Given that 401Ks are typically completely optional, deciding to contribute to one IS an Individual planning, and not company or government.
I’m so glad DELTA ordered the A350.
I think Boeing really messed up saying ‘final offer’ without holding to it. Costs the union only a little now to see if they can get more. Boeing should go back to their former ‘final offer’ now and actually hold to it. Send a message to all unions
I don’t think that’s how contract negotiations work in real life, unless your goal is to burn already negative Boeing’s cash flow for another few months…
"Send a message to all unions"...
Yeah, really sucks that unionized workers across the board are finally leveraging their power.
You probably call yourself a capatilist, but really you're a corporatist.
Also Justin is forgetting, Boeing does not have the leverage over the unions here, it is the other way around. Boeing production is halted, they don’t get paid until the aircraft is delivered, they are burning cash the longer it keeps going on. If Justin’s interpretation of teaching the Union a lesson is putting Boeing in bankruptcy protection, cancelling numerous future orders and firing workers. Then that has to go down as some of the...
Also Justin is forgetting, Boeing does not have the leverage over the unions here, it is the other way around. Boeing production is halted, they don’t get paid until the aircraft is delivered, they are burning cash the longer it keeps going on. If Justin’s interpretation of teaching the Union a lesson is putting Boeing in bankruptcy protection, cancelling numerous future orders and firing workers. Then that has to go down as some of the stupidest business decisions, but hey you get to teach the Union lessons right