33,000 Boeing workers initiated a strike on September 13, 2024 after rejecting a contract offer that included wage increases and benefits. The machinists, who play an important role in the production of Boeing’s best-selling aircraft including the 737 Max, 777 and 767, voted in favor of the work stoppage, the company’s first major strike in 16 years.
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Boeing workers led by the International Association of Machinists and Aerospace Workers (IAM) District 751 initiated a strike on Friday after rejecting a deal that included a 25% pay increase over four years.
The strike involves more than 30,000 workers from Boeing’s Seattle and Portland facilities, which produce aircraft such as the 737 Max and 777. 95% of the union members rejected the pay deal, with 96% authorizing strike action.
Workers were frustrated with previous contract negotiations, which they believe led to unfavorable conditions. The new deal was viewed as insufficient to compensate for these grievances.
While the rejected deal included a 25% pay increase, workers had initially sought a 40% pay rise. The preliminary agreement promised job security by committing Boeing to build its next commercial jet in the Seattle area, but workers remained skeptical due to past actions by the company including layoffs and shifts of work to non-union factories.
Boeing acknowledged the rejection of the agreement and addressed its commitment to resetting the relationship with both the union and its employees.
It also expressed readiness to return to the negotiating table. New Chief Executive Officer, Kelly Ortberg had previously asked workers to accept the deal, warning that a strike could jeopardize the company’s recovery.
The strike represents a major setback for Ortberg, who was appointed with a clear mandate to turn the business around. The strike halts production and also reflects the trust issues between Boeing’s management and its workforce.
The leadership of IAM District 751 had endorsed the agreement, describing it as the best deal they had ever negotiated. However, they respected the workers’ decision to reject the deal and strike.
The union initially sought a 40% pay increase and improvements in job security, but the agreement fell short of these goals. Union President Jon Holden has addressed that the strike is about fighting for our future.
The strike has brought commercial airplane production at Boeing to a virtual standstill. This will affect the company’s ability to deliver aircraft particularly the highly sought-after 737 Max.
The supply chain, which involves around 10,000 suppliers spread across all 50 US states, will also face disruptions. These suppliers depend heavily on Boeing’s steady production to maintain their operations.
An extended strike could cost Boeing billions in lost revenue. The company’s last major strike in 2008 lasted eight weeks and cost approximately $1.5 billion per month.
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The company has been struggling with financial issues for several years. Since 2018, the company has incurred over $33 billion in cumulative operating losses and hasn’t posted an annual profit in five years.
Boeing’s credit rating has been downgraded to near junk status.
The company’s stock price has fallen more than 60% over the past five years. The company’s value has been eroded by incidents including a mid-air blowout on an Alaska Airlines flight, which additionally concerns about the safety and quality of Boeing’s planes.
The strike is expected to disrupt Boeing’s commercial aircraft production for the 737 Max, which accounts for more than 75% of Boeing’s order backlog.
The company had been trying to ramp up production to recover from previous safety and quality issues and the strike threatens to stall that progress.
Analysts predict the strike could cost Boeing up to $3.5 billion in cash flow, if it lasts as long as the previous 50-day strike in 2008. The company’s cash flow is tied to aircraft deliveries, with around 60% of the sale price of a plane paid upon delivery to customers.
In 2009, the company moved part of its 787 Dreamliner production to non-union factories in South Carolina, a decision that continues to resonate with the unionized workforce in Washington state.
Boeing is still dealing with the fallout from two fatal crashes involving its 737 Max aircraft, which occurred in 2018 and 2019.
The company continues to face multiple lawsuits and federal investigations after a door plug blew off a 737 Max operated by Alaska Airlines in January 2024.
Boeing agreed to plead guilty to a federal fraud charge related to the 737 Max crashes and paid a $244 million fine. The company is now under the supervision of a court-appointed monitor as part of its agreement with the US Department of Justice.
Boeing is a major player in the US economy, employing around 150,000 workers and contributing approximately $79 billion annually. The company supports 1.6 million jobs directly and indirectly across various industries.
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