Boeing Machinists Strike Ends, As Workers Approve New Contract

Boeing is in a really rough spot at the moment on several levels. For the past couple of months, the most immediate challenge has been that machinists have been on strike (since September 13, 2024). Well, there’s finally a positive update.

Boeing machinists urged to take contract offer

Let me cut to the chase — on Monday, November 4, 2024, Boeing machinists represented by IAM Union District 751 voted to approve a new contract, with 59% of participants voting in favor of the proposal. Machinists will start to return to work as of Wednesday, November 6, 2024.

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With that out of the way, let me share a bit of background on the strike. For several months, Boeing management and the union were negotiating a contract for the company’s machinists — both sides agreed that workers deserved pay increases, as they were overdue for a new contract.

The issue was, management and the union weren’t able to 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.

Then after several more weeks, Boeing once again increased its offer, with pay raises of 35% over four years, and other improvements. That was also rejected, but by a narrower margin. Then a little over a week ago, negotiations between Boeing and the union made progress, with the following contract proposal for machinists:

• They were offered a 38% pay increase, rather than a 35% pay increase; this came in the form of a 13% increase the first year, a 9% increase the second year, a 9% increase the third year, and a 7% increase the fourth year, which compounds to 43.65% over the life of the agreement
• They were offered a $7,000 ratification bonus plus a $5,000 lump sum payment that they could accept right away, if they’d like; previously, there was a $7,000 ratification bonus plus $5,000 added to their 401k

With this latest contract proposal, the union highly recommended that members vote in favor of the contract:

Your Union is endorsing and recommending the latest IAM/Boeing Contract Proposal. It is time for our Members to lock in these gains and confidently declare victory. We believe asking members to stay on strike longer wouldn’t be right as we have achieved so much success.

In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor. We are at that point now and risk a regressive or lesser offer in the future.

This contract builds on everything achieved in the September 12, 2024 agreement, with the additional gains you achieved by going on strike.

The two significant changes in this offer from the last one are:
-38% GWI over four years – 13%, 9%, 9%, 7%, which compounds to 43.65% over the life of the agreement
-The $12,000 Ratification bonus combines the previous $7k ratification bonus and the $5K lump sum into the 401k. Now, members can choose how this total amount is received – in your paycheck, contribution to your 401K, or a combination of both.

While members of course don’t always vote in favor of contracts recommended by the union, the union was pretty clear that it couldn’t do better, warning that future offers may get worse, and that the union had extracted all of the value that it can.

So we’ve finally seen workers approve this contract, though only 59% voted in favor, while 41% voted against. Honestly, the high percentage that voted against the contract probably isn’t a great sign for morale at Boeing among machinists.

The machinists who have been on strike are the ones assembling the Boeing 737 MAX and the Boeing 777X, so this has impacted Boeing’s customers. Meanwhile the Boeing 787 is assembled by different workers. Boeing estimates that it has been 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. So this strike didn’t last quite as long, but it wasn’t that far off.

Let’s hope Boeing has hit rock bottom

With this new contract having now been ratified, I’m hoping that Boeing can get back to fixing all of its other issues. While the strike was the most immediate issue, it’s just the tip of the iceberg when it comes to Boeing’s problems.

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. This is an issue that starts from the top down.

Kelly Ortberg was only recently appointed as Boeing’s new CEO. By most accounts, he seemed like a great candidate for the job. As you can tell, unfortunately his tenure hasn’t been 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. I also think Boeing really messed up with its “best and final offer” approach to negotiations, when that wasn’t in fact the best and final offer.

Bottom line

Boeing’s machinists have finally voted to approve a new contract, ending a strike that started on September 13. We saw machinists reject three separate contract proposals, though they finally voted in favor of the fourth proposal, but not by an amazing margin.

I’m happy to hear that Boeing machinists can now get back to work, as so many airlines are relying on the delivery of new Boeing jets, and this strike has prevented that. Now Boeing can go back to focusing on all of its other problems.

What do you make of the Boeing strike coming to an end?