Almost 33,000 workers of Boeing’s manufacturing factories went on strike after rejecting a 25% pay raise in their new contracts. Nearly 96% of Boeing factory workers voted in favor of the strike, which dealt the aerospace giant a major blow at a time when it was already grappling with a severe reputational crisis.
Jon Holden, president of the International Association of Machinists (IAM) District 751, announced the strike, citing concerns about unfair labor practices at the company as many machinists cheered the announcement.
Holden believes that workers are subjected to unnecessary and unlawful surveillance, discriminatory conduct, coercive questioning, and other practices that have destroyed the work culture at the company.
Boeing had initially hoped to avoid a strike by reaching a tentative agreement with union leaders, including a 25% wage increase and retirement and health benefits. However, workers believed that this increase was still not enough to cover the rising cost of living, and they urged the company to offer at least a 40% wage rise.
The aviation giant called the tentative proposal the “best contract” it has ever offered to its workers. After the strike was announced, the company’s CFO, Brian West, expressed disappointment with the workers’ decision and announced his intent to reach a new agreement that would serve the best interests of the workers and their families.
West admitted that the strike would impact Boeing’s ability to manufacture new planes, severely disrupting the company’s finances.
Meanwhile, all three of the Big Three credit rating agencies—S&P Global Ratings, Moody’s, and Fitch—indicated that a prolonged strike could lead them to downgrade Boeing’s rating. These announcements reduced Boeing stocks by 4%.
One day before the strike, Boeing’s new CEO, Kelly Ortberg, urged workers to accept the new contracts and avoid going on strike. Ortberg replaced Dave Calhoun in August after Calhoun was forced to resign because the company faced immense pressure for failing to maintain the quality of its aircraft.
Aviation analyst Sheila Kahyaoglu revealed that Boeing could suffer losses of $1.5 billion if the strike continues for 30 days, impacting global supply chains. Kahyaoglu indicated that the current tentative agreement would cost Boeing almost $900 million annually.
Although Boeing has been already facing scrutiny since last year, the door plug of its 737 Max 9 blew out mid-air in January 2024, creating a large hole in the airliner and bringing the company under renewed scrutiny.
The suspicious deaths of two Boeing whistleblowers further pressured the company, with more whistleblowers continuing to come forward.
White House Press Secretary Karine Jean-Pierre noted that the Biden administration is in contact with both union workers and Boeing as she urged all stakeholders to reach an agreement that could serve the best interests of everyone involved.
