Boeing workers have initiated a strike following the rejection of a tentative deal that included a 25% pay rise. The strike, which began at midnight Pacific Time (07:00 GMT) on Friday, saw over 30,000 workers in Seattle and Portland downing their tools.
This strike poses a significant challenge for Boeing, already grappling with mounting financial losses and a tarnished reputation due to previous safety issues, including two fatal crashes.
The walkout is a setback for Boeing's new chief executive, Kelly Ortberg, who took the helm last month with the goal of revitalising the company. Nearly 95% of union members, who are involved in the production of aircraft such as the 737 Max and 777, voted against the pay deal. Of those who voted, 96% supported strike action until a new agreement is negotiated.
Jon Holden, president of the International Association of Machinists and Aerospace Workers (IAM) District 751, stated, “Our members spoke loud and clear tonight. We strike at midnight.”
In response, Boeing said in a statement: “The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.”
The strike is a major setback for Boeing and a personal embarrassment for CEO Kelly Ortberg, who had warned that a strike could jeopardise the company's recovery. The strike reflects a significant breakdown in trust between management, workers, and union leadership, who had described the rejected deal as the best contract ever negotiated.
The tentative agreement, which offered a 25% pay rise over four years and a promise to build Boeing's next commercial plane in Seattle if the project started during the contract, was rejected by workers. The union had originally sought a 40% pay rise.
The length of the strike remains uncertain, and Boeing appears willing to negotiate further. Analysts warn that a prolonged strike could cost the company and its suppliers billions. The previous contract, reached in 2008 after an eight-week strike, cost Boeing approximately US$1.5 billion per month.
The current contract expired on Thursday, and Boeing is already dealing with significant challenges, including a recent fraud charge related to two fatal 737 Max crashes, ongoing lawsuits, and a production cap imposed by the US Federal Aviation Administration.
