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Boeing looks set to have averted a strike of 33,000 workers at the last minute after reaching a historic new deal with the International Association of Machinists and Aerospace Workers (IAM).
The embattled airplane maker announced the tentative agreement which must still be ratified by the union’s members in a statement shared on its website Sunday.
“Boeing today reached a tentative agreement on a historic contract offer with IAM Districts 751 & W24, which represent 33,000+ Boeing employees,” the company said.
In July, 99% of Boeing’s unionized workers voted to approve strike action, which was set to begin on Friday.
What’s included in Boeing’s historic deal with employees?
IAM was seeking an entirely new contract for the first time in 16 years, seeking a 40% pay rise, the reinstatement of a traditional pension program that was cut in 2014, and job security for the next 50 years.
While the tentative deal did not quite secure everything the IAM was targeting, Boeing has agreed to significant improvements to the compensation and benefits packages of its staff, including a historic 25% pay increase over a four-year contract.
Unionized workers will also receive an improved 401(k) plan, lower employee contributions to health insurance, and more time off.
“We did not get everything we wanted, but you all can be proud of your strength, solidarity, and unity because you have achieved the best contract we have ever had,” a statement released Sunday by Jon Holden, IAM District 751 President, and Brandon Bryant, W24 President said.
An agreement that sets the bar for everyone else in the industry to strive for. We know that you all were ready to strike - ready to sacrifice for each other. We are so proud of you. Thank you for sending the message that we needed to give us the leverage to achieve this win.”
Stephanie Pope, CEO of Boeing’s commercial plane division, said the company “heard what’s important” to Boeing employees from the new contract.
“And we have reached a tentative agreement with the union on a historic offer that takes care of you and your family,” she stated. “The contract offer provides the largest-ever general wage increase, lower medical cost share to make healthcare more affordable, greater company contributions toward your retirement, and improvements for a better work-life balance.”
Boeing also agrees to better job security for Pacific North-West workers
Pope further confirmed that Boeing’s next new airplane would be built in Puget Sound, Boeing’s headquarters in Washington.
“Boeing’s roots are here in Washington,” she added. “It is where generations of workers have built incredible airplanes that connect the world… This would go along with our other flagship models, meaning job security for generations to come. It’s a big commitment to you and to our community.”
Workers and union officials have criticized the company for shifting the production of past models out of the Pacific North-West to lower-cost regions, and for threatening to do the same for the production of future models, claiming that Boeing leveraged production location to avoid agreeing to an entirely new contract.
The IAM has said the threat of removing production from the region forced it to cede to Boeing’s demands to raise employee healthcare contributions and to remove a traditional pension plan.
In 2023, Boeing asked for an extension to an earlier contract as a guarantee to keep the production of the 777X widebody at the Seattle plant.
“We want to ensure that we can never again be hit mid-contract with threats to take away our livelihoods,” Holden stated earlier in 2024 ahead of the vote which authorized possible strike action. “If we can secure work for the next 50 years, which is the lifetime of an aircraft programme, we’d be helping everyone, not just our members and those that follow them but engineers, management, and the whole supply chain.”
Union unafraid to “leverage” Boeing’s precarious position
The new contract comes amid deeply troubled waters for Boeing as it struggles with the fallout of two fatal crashes of its aircraft in 2019 and 2020, with further safety concerns brought to the fore after a door plug blowout in January.
The company has struggled financially, too, and it has been widely criticized by several regulators and federal agencies investigating its workplace practices.
IAM leaders have been bullish about the union’s plan to leverage Boeing’s precarious position to its advantage at the negotiating table. “Financially, the company finds itself in a tough position due to many self-inflicted missteps. Holden and Bryant wrote in their shared statement. “It is IAM members who will bring this company back on track. As has been said many times, there is no Boeing without the IAM.”
“We heard our members loud and clear in every email, rally, and conversation,” their statement continued. “Members stood tall with confidence. Finally, in a position of great leverage, we used every ounce of power we could to go after everything you said was important.”
Holden has previously remarked the IAM would “push them [Boeing] further than they ever would think they are going to go on wages and job security, noting that the union has “a lot of leverage right now and we are going to use it.”
Ex-CEO Dave Calhoun said in July that Boeing would “work as hard as we can not to have a strike.”
“We know wage asks will be big,” he stated. “We’re not afraid to treat our employees well in this process.”
The new contract will cover staff producing commercial jets at three Boeing factories in Washington, and one site in Portland, Oregon.
The agreement will need to be approved in a vote set to take place on September 12. Union leadership has recommended union members accept the approval.
