Boeing faces possible strike on Friday over labour contract

Boeing faces possible strike on Friday over labour contract


BOEING faces a possible strike as early as Friday if most of the US planemaker’s factory workers in the Pacific Northwest vote on Thursday to back a work stoppage and reject a tentative deal that has enraged many of them.

Roughly 30,000 workers who produce Boeing’s 737 MAX, 767 and 777 jets in the Seattle area and Portland, Oregon, will vote on their first full contract in 16 years. A key union negotiator has acknowledged that many of the workers are angry because they wanted bigger wage hikes and other improvements.

A strike will take place if the majority of workers vote to reject the preliminary deal and at least two-thirds vote to strike, according to the International Association of Machinists and Aerospace Workers (IAM).

Workers’ discontent with the preliminary agreement reached on Sunday has been on display in some of Boeing’s Seattle-area factories, with employees holding marches, banging pots and pans and blowing horns this week, one worker said.

According to a note from TD Cowen, a 50-day strike could cost Boeing an estimated US$3 billion to US$3.5 billion of cash flow. The Boeing workers’ last strike in 2008 shuttered plants for 52 days and hit revenue by an estimated US$100 million per day.

“What I’m seeing is that there are a lot of angry people over many of the issues that they care deeply about,” said Jon Holden, who headed the negotiations for IAM, Boeing’s largest union.

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“We might see them vote this down and vote to go on strike,” Holden, president of the IAM’s district 751, told Reuters.

The labor talks are a test for new Boeing CEO Kelly Ortberg, who met Holden after starting in August with a pledge to reset union relations, improve safety and ramp up production of Boeing’s best-selling 737 MAX passenger jet.

On Wednesday, Ortberg sent a letter to Boeing workers taking part in the vote, urging them to accept the deal.

“A strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together,” the letter said.

Strike

Ortberg was at the planemaker’s Renton, Washington, plant on Wednesday to discuss the labour deal with workers, a source said.

Boeing is carrying almost US$60 billion of debt and facing scrutiny from regulators and customers, after a door plug on a near-new MAX blew off an Alaska Air jetliner while in mid-air in January. The planemaker’s shares have dropped 36.5 per cent so far this year.

The proposed deal includes a general wage increase of 25 per cent, a US$3,000 signing bonus and a pledge to build Boeing’s next commercial jet in the Seattle area, provided the programme is launched within the four years of the contract.

Holden said workers want a wage hike closer to his opening position of 40 per cent over three or four years, and that some are unhappy about the loss of an annual bonus that has averaged around 3.7 per cent of earnings over the last 20 years.

Princie Stewart, a Seattle resident who has worked for Boeing since 1988 and has been through three prior work stoppages, expects to walk off the job a fourth time. “The way the emotions are, we’re going to be striking,” said Stewart. “Our vote comes down to how the members feel as far as this contract is going to help their families.” REUTERS



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